The United States Supreme Court has held that the sovereign immunity waiver in Section 106(a) of the Bankruptcy Code does not extend to state law claims “nested” within a Section 544(b) claim for relief, depriving bankruptcy trustees of the right to sue the United States under state law to avoid prepetition fraudulent transfers of debtor funds. United States v. Miller, 604 U.S. ___, 145 S.Ct. 839 (2025).
Partner Uzzi Raanan, a past Business Law Section (BLS) representative to the California Lawyers Association's (CLA’) Board of Representatives, authored a summary of the U.S v. Miller case and the full text is available on CLA's website. This write-up was originally published in Westlaw’s Commercial Finance Newsletter.
