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Whether Sovereign Immunity Is A Defense For States In Bankruptcy Cases, Melanie Lee

Bankruptcy Research Library

(Excerpt)

Sovereign immunity, generally, prohibits suit against a sovereign without the sovereign’s consent. The defense of sovereign immunity may not be asserted by any state, or arm of the state, in any bankruptcy proceeding. The prohibition of asserting sovereign immunity in a bankruptcy case has been common practice, almost continuously, since the states agreed to such a waiver in the Constitutional Convention. Moreover, this waiver of sovereign immunity, has since been codified in Section 106 of title 11 of the United States Code (the “Bankruptcy Code”). As a result, a state involved in a bankruptcy case will typically be treated …