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  • Writer's pictureKirk Hartley

“Alter Ego” Issues are Not Core Bankruptcy Issues, At Least in the 7th Circuit

For both substance and style (breezy and brief, with some dry wit), it’s hard to beat Weil Gotshal’s Bankruptcy Blog. And, now, a new post at the blog brings a "Stern" update through a 7th Circuit case especially relevant to mass tort lawyers who find their clients more frequently intersecting with bankruptcy courts. As a reminder, Stern is notable for reminding – and holding again – that bankruptcy courts are courts of limited jurisdiction. Therefore, the bankruptcy courts sometimes are deemed too far off the reservation when they purport to decide issues that are not "core" bankruptcy issues.

In the 7th Circuit case, it held that the bankruptcy court went beyond its jurisdictional power when it resolved "alter ego" claims brought by a plaintiff. The outcome in the 7th Circuit, however, resulted in part from waiver of arguments by the defendant. Time will tell where all the Stern rulings go. For now, it’s clear Weil’s blog will keep us all informed, via the Stern Files.

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