This paper discusses state sovereign immunity and the Bankruptcy Code. Specifically it addresses the question of whether the United States Supreme Court case of Central Virginia Comm. College v. Katz resolved the conflicts regarding state sovereign immunity and the Bankruptcy Code.
Overall, while Katz helped to resolve several conflicts between state sovereignty and the Bankruptcy Code, the issue is far from being resolved. The Court stated that the ratification of the Bankruptcy Clause represented a surrender by the states of their sovereign immunity in certain federal proceedings. Thus, it leaves open the question of whether the states have waived their sovereign immunity defense in other bankruptcy proceedings other than those involving preference or an ancillary matter in the Court’s in rem jurisdiction.
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