Dissecting Stern V. Marshall

July 07, 2011
In a significant decision that reinforced the U.S. Supreme Court’s prior plurality decision in Marathon, the court determined that while bankruptcy courts have the statutory authority to hear state-law compulsory counterclaims to a creditor’s proof of claim under section 157(b)(2)(C) of Title 28, Article III of the U.S. Constitution requires such proceedings to be heard by Article III judges where they would not be resolved as part of the claims allowance process.