Supreme Court Decision on Arbitration Has Ominous Implications for Bankruptcy
ustice Brett M. Kavanaugh wrote his first opinion for the Supreme Court in what The New York Times called a “minor arbitration case.” If Justice Kavanaugh’s ruling in Henry Schein Inc. v. Archer & White Sales Inc. is applied rigorously in bankruptcy, it’s a “really big deal,” because bankruptcy judges will not be able to bar creditors from initiating arbitrations over “core” issues such as allowance of claims, objections to dischargeability of debts, and even adequate protection.
Indeed, Schein could be interpreted to mean that the bankruptcy court cannot bar a creditor from initiating arbitration against an individual or corporate debtor, even if the call for arbitration was frivolous.
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