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US Supreme Court Won’t Review Controversial Bankruptcy Doctrine

The U.S. Supreme Court has denied three cert petitions asking the justices to review the doctrine of “equitable mootness,” a controversial judge-made rule that allows appellate courts to block challenges to bankruptcy plans.

On Tuesday, the court declined to hear a case out of the U.S. Court of Appeals for the Third Circuit in which noteholder David Hargreaves claimed the Arizona-based company Nuverra Environmental Solutions’ Chapter 11 plan unfairly discriminated against him. The lower court deemed his appeal equitably moot—a rule judges apply when it’s believed that allowing a challenge to move forward would harm third parties and undo complex reorganizations that are already in motion.

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