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Bankruptcy law trumps sovereign immunity in Supreme Court decision involving the Lac du Flambeau Chippewa

Drew Angerer
Getty Images

A U.S. Supreme Court decision involving the Lac du Flambeau tribe says the tribe has to abide by U.S. bankruptcy laws for individuals.

The court found the bankruptcy law overrides tribal sovereign immunity.

The case has implications for all tribal governments.

The Milwaukee Journal Sentinel reports the case involved tribal member Brian Coughlin, who had borrowed money from Lendgreen, a tribal business, in 2019.

Coughlin filed for Chapter 13 bankruptcy but said Lendgreen kept trying to collect.

A lower court had found in favor of the tribe based on sovereign immunity, but a federal appeals court found the bankruptcy code “strips tribes of their immunity.”

The U.S. Supreme Court upheld that ruling, arguing all tribal governments and all governments in the U.S. are bound by the bankruptcy code.

It was an 8-to-1 decision by the Justices.

John Burton is the WXPR Morning Edition Host.
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