The Questionable Axiom of Butner v. United States
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Description
The Supreme Court opinion of Butner v. United States established this now famous bankruptcy law principle: “Property interests are created and defined by state law.” Having thus stated the principle, the Court explained: “Uniform treatment of property interests by both state and federal courts within a State serves to reduce uncertainty, to discourage forum shopping, and to prevent a party from receiving ‘a windfall merely by reason of the happenstance of bankruptcy.’ ” The principle is straightforward, and seemingly compelling. It was described by one noted author as an “uncontested axiom” at least among bankruptcy scholars who focus on the consequences of bankruptcy law within the larger legal system and a market economy. Appearances can be deceiving, however. The purpose of this essay is to question the Butner principle from the broad consequential perspective that has fostered its endorsement. Part I describes the Butner case and its holding. Part II explores purported justifications for the Butner principle. Part III challenges the wisdom of the Butner principle as applied to the priority of nonconsensual claims. Concluding remarks are then offered.
Source Publication
Bankruptcy Law Stories
Source Editors/Authors
Robert K. Rasmussen
Publication Date
2007
Recommended Citation
Adler, Barry E., "The Questionable Axiom of Butner v. United States" (2007). Faculty Chapters. 14.
https://gretchen.law.nyu.edu/fac-chapt/14
