United States v. Nordic Village Inc., David O. Simon, Trustee (503 U.S. 30)
U.S. Supreme Court · decided February 25, 1992 · Supreme Court Database (Spaeth)
- Citation
- 503 U.S. 30 · 112 S. Ct. 1011
- Decided
- February 25, 1992
- Term
- October Term 1991
- Vote
- 7–2
- Majority author
- Justice Scalia
- Issue area
- Economic Activity
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice Scalia delivered the opinion of the Court. This case presents a narrow question: Does § 106(c) of the Bankruptcy Code waive the sovereign immunity of the United States from an action seeking monetary recovery in bankruptcy? I Respondent Nordic Village, Inc., filed a petition for relief under Chapter 11 of the Bankruptcy Code in March 1984. About four months later, Josef Lah, an officer and shareholder of Nordic Village, drew a $26,000 check on the company’s corporate account, $20,000 of which was used to obtain a cashier’s check in that amount payable to the Internal Revenue Service (IRS). Lah delivered this check to the IRS and directed it to apply the funds against his individual tax liability, which it did. In December 1984, the trustee appointed for Nordic Village commenced an adversary proceeding in the Bankruptcy Court for the Northern District of Ohio, seeking to recover, among other transfers, the $20,000 paid by Lah to the IRS. The Bankruptcy Court permitted the recovery. The unauthorized, postpetition transfer, the court determined, could be avoided under § 549(a) and recovered from the IRS under § 550(a) of the Bankruptcy Code. It entered a judgment against the IRS in the amount of $20,000, which the District Court affirmed. A divided panel of the United States Court of Appeals for the Sixth Circuit affirmed. 915 F. 2d 1049 (1990). It upheld the reasoning…
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