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Bankruptcy Act of 1938
[edit]The Bankruptcy Act, though now superseded by the Bankruptcy Code, remains an important interpretive tool for current bankruptcy law.
Several United States Supreme Court decisions have interpreted the Bankruptcy Code by looking back to the history of the Chandler Act. Some of the most notable decisions include:
- United States v. Whiting Pools, Inc., which justified the practice of requiring the IRS to return a bankrupt company's property under the Bankruptcy Code by reference to previous practice under the Bankruptcy Act. The Court wrote that Congress must have been aware of this previous practice and decided not to change it when it passed the Bankruptcy Code. [1]
- Johnson v. Home State Bank, in which the Court looked to the legislative history and precedent of the Bankruptcy Act to interpret the term "claim" in the Bankruptcy Code.[2]
- Fidelity Financial Services, Inc. v. Fink, in which the Court considered Bankruptcy Act's rules about and precedent interpreting avoidable preferences to resolve a similar question under the Bankruptcy Code.[3]
- Cohen v. de la Cruz, in which the court relied on practice under the Bankruptcy Act's to interpret the non-dischargeability provisions of the Bankruptcy Code.[4]
The practice of using the Bankruptcy Act to interpret the Bankruptcy Code has been criticized by some bankruptcy scholars. They claim that this interpretive tool leads to unpredictable results, may ignore the intent of Congress, and confuses lower courts interpreting Supreme Court decisions.[5]