Jenner & Block

U.S. Supreme Court Will Hear Firm’s Appeal for Bankruptcy Client

The U.S. Supreme Court agreed to hear a case involving a firm client who is appealing a Ninth Circuit decision upholding a $75,000 surcharge on exempted property.  At issue is whether a bankruptcy court has the equitable authority to take away a debtor’s homestead exemption that the Bankruptcy Code otherwise grants.    In filing for Chapter 7 bankruptcy, client Stephen Law sought a homestead exemption for his home, valued at $363,348.  Two years later, the bankruptcy trustee moved to surcharge the exemption $75,000, claiming that Mr. Law had had filed a false lien against his property to prevent his creditors from seizing it.  Mr. Law maintains that although a court may be able to levy other sanctions, it cannot deprive him of his homestead exemption except on the enumerated grounds that Congress has adopted in the Bankruptcy Code.  The team representing Mr. Law includes Partners Matthew S. Hellman, Catherine L. Steege and Jessica Ring Amunson and Associates Caroline M. DeCell and Carl N. Wedoff, who filed reply and supplemental briefs in support of certiorari on Mr. Law’s behalf.  The Court granted certiorari over the recommendation of the solicitor general to deny the petition.  News of the grant was covered in media outlets including Law360, which quotes Matt saying, “We’re gratified the court granted review in this case and we believe that Congress has set out in the Bankruptcy Code when a debtor is entitled to exemptions and the [Ninth Circuit ruling] wrongly denied Mr. Law the exemptions that the code provides.”  The news was also covered in the LexisNexis Litigation Resource Community and the ABI Blog Exchange.