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Federal Appeals Court Affirms Tribal Immunity from Bankruptcy Code

On February 26, 2019, the Sixth Circuit Court of Appeals - which has jurisdiction over Michigan, Ohio, Kentucky and Tennessee - upheld the decision of a federal court in Michigan which ruled that Congress did not clearly and unequivocally abrogate Native American tribes' sovereign immunity from the Bankruptcy Code. As a result, that immunity still applies and the litigation trustee for the Greektown Casino's Chapter 11 bankruptcy case is not able to seek to recover nearly $177 million. This amount had been transferred from the casino to several entities as part of an ownership restructuring three years before the casino declared bankruptcy.

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