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cel:818.262.5446 email:800041.lead@cendant.lead Shelley Rizzotti cel:818.516.6409 email:800041.lead@cendant.lead Ewing &amp ...

Upcoming Supreme Court Docket Includes Cases to Watch for Commercial Lawyers

, No. 15-649. The order of priorities provides a rule for how bankruptcy assets are distributed and protects creditors higher on the list of priorities. These seemingly absolute bankruptcy priorities were altered in this case under a so-called “structured dismissal” in which the bankruptcy court issued orders dismissing certain aspects of the bankruptcy case (and thereby disposing the estate’s assets) without approving a bankruptcy plan. Through structured dismissals, the bankruptcy court ultimately placed a group of creditors (terminated employees with wage claims) lower in the order of priorities than they otherwise would have been under the statutory system for determining which creditors take first from a bankruptcy estate. A decision upholding this process could potentially expand the power of bankruptcy trustees and bankruptcy courts to alter the rights of creditors through structured dismissals or settlements, thereby upsetting the expectations of senior creditors.

Supreme Court to Hear Case Involving Where Fannie Can Be Sued

The Supreme Court agreed Tuesday to hear a case regarding a clause in Fannie Mae's corporate charter that awards jurisdiction over every case involving the government-sponsored enterprise to federal courts.

The case, Lightfoot v. Cendant Mortgage Corp., addresses a specific clause in Fannie Mae's charter, which says that the GSE can "sue and be sued, and to complain and defend, in any court of competent jurisdiction, state or federal." The case was initially brought forth by two California women, Beverly Ann Hollis-Arrington and Crystal Monique Lightfoot, after Fannie Mae initiated foreclosure proceedings against Hollis-Arrington's home.

The plaintiffs in the case had originally filed their complaint in California state court, but the case was then shifted to federal court by Fannie Mae. The district court then dismissed all claims.

A divided Ninth U.S. Circuit Court of Appeals decision from October 2014 came down in Fannie Mae's favor, saying that Fannie Mae's charter did grant jurisdiction to federal district courts by citing the decision made in the 1992 case of American Red Cross v. S.G.