The Questionable Axiom of Butner V. United States

Abstract:     
Named for the Supreme Court opinion in Butner v. United States, the Butner principle holds that bankruptcy law should be merely procedural and should honor state law entitlements rather than impose a set of substantive federal priority rules. The Butner principle has become a cherished axiom, but it is founded on the faulty premise that destructive forum shopping would be the result if bankruptcy law provided its own entitlements. The Butner principle should be discarded and courts or Congress should adopt a sensible federal priority regime, one that includes super-priority for tort victims.

Number of Pages in PDF File: 11

Keywords: Bankruptcy, Priority, Tort, Federalism

JEL Classification: K10, K11, K13, K20

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