Wilma M. Pennington-Thurman v. Federal Home Loan Mortgage Corporation, et al.

A finding of fraud on the court is reserved for material, intentional misrepresentations that could not have been discovered earlier. Do instances discovered in 2021 after settlement of 2010 rise to the level of fraud on the court under Rule 60{dX3), whereas a bankruptcy judge presiding over debtor’s bankruptcy case for eleven years did not recuse himself while he was working closely with an Attorney that is an Attorney with the law firm representing debtor’s creditor during most of that time?

Congress did not authorize a “rare case” exception that permits courts to disregard priority in structured dismissals for “sufficient reasons.” The fact that it is difficult to give precise content to the concept of “sufficient reasons” threatens to turn the court below’s exception into a more general rule, resulting in uncertainty that has potentially serious consequences—e.g., departure from the protections granted particular classes of creditors, changes in the bargaining power of different classes ofcreditors even in bankruptcies that do not end in structured dismissals, risks of collusion, and increased difficulty in achieving settlements. Courts cannot deviate from the strictures ofthe Code, even in “rare cases.” Pp. 16-18. See CZYZEWSKIET AL. v. JEVIC HOLDING CORP. ETAL. 15-649(2017) The Code makes clear that distributions in a Chapter 7 liquidation must follow this prescribed order. §§725,726. Id