Anyone care to help explain why this is unconstitutional?

[DiamondDave]

Arcapita's novel sharia bankruptcy plan approved | Reuters

This is a very disturbing ruling.. and it should be struck down quickly.. SHOULD...

Lets see how many actually understand why

 

[novasteve]

If the creditors agree its not really an issue

 

[DiamondDave]

If the creditors agree its not really an issue

If the creditors agree, there need not be a court ruling

The ruling of the court is unconstitutional.. for good reason

 

[martybegan]

If the creditors agree its not really an issue

If the creditors agree, there need not be a court ruling

The ruling of the court is unconstitutional.. for good reason

Its not really a court ruling per se, its approval from a bankruptcy court. A company that goes into bankruptcy protection is protected by the court, and the court has final approval on any plan that is put forward to liquidate the company (if it comes to that).

There is no mention of any of the unsecured creditors fighting it (yet).

 

[Katzndogz]

It isn't unconstitutional. The Constitution is a limit on the power of the government. This is approval of a bankruptcy plan. There is only one question, does the plan adequately protect the creditors. Other than that, it could be any kind of plan devised. This plan so happens to be compliant with sharia law.

 

[DiamondDave]

It isn't unconstitutional. The Constitution is a limit on the power of the government. This is approval of a bankruptcy plan. There is only one question, does the plan adequately protect the creditors. Other than that, it could be any kind of plan devised. This plan so happens to be compliant with sharia law.

The states gave up all power to bankruptcy and the uniformity of laws pertaining to to, to the federal government

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To accept the 'sharia' stipulations for bankruptcy at the state level is unconstitutional

 

[Katzndogz]

If the creditors agree its not really an issue

If the creditors agree, there need not be a court ruling

The ruling of the court is unconstitutional.. for good reason

You aren't understanding. The court didn't make a ruling. The court gave an approval of the plan that everyone else had already agreed to.

 

[DiamondDave]

If the creditors agree its not really an issue

If the creditors agree, there need not be a court ruling

The ruling of the court is unconstitutional.. for good reason

You aren't understanding. The court didn't make a ruling. The court gave an approval of the plan that everyone else had already agreed to.

Yes.. as it pertains to new bankruptcy proposals, the court did approve a new type of plan, which is indeed setting forth a ruling. That power is not for the state, that is for the federal government due to the ratification of the Constitution... not that I have any particular issue with the plan. But, being a new plan in concept, this should have been referred to the federal judiciary

 

[Katzndogz]

If the creditors agree, there need not be a court ruling

The ruling of the court is unconstitutional.. for good reason

You aren't understanding. The court didn't make a ruling. The court gave an approval of the plan that everyone else had already agreed to.

Yes.. as it pertains to new bankruptcy proposals, the court did approve a new type of plan, which is indeed setting forth a ruling. That power is not for the state, that is for the federal government due to the ratification of the Constitution... not that I have any particular issue with the plan. But, being a new plan in concept, this should have been referred to the federal judiciary

There are all kinds of plans. The Court doesn't care what the details of the plan are. The only consideration is whether the protections for the creditors are adequate. If you want to discuss the Constitution, try Article 1.

Article I, section 10 of the Constitution provides that "no state shall" "pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts."

The Clause provides, in pertinent part, that "[n]o State shall . . . pass any . . . Law impairing the Obligation of Contracts." U.S. Const. art. I, § 10, cl. 1. The Supreme Court and nearly all federal courts have, over the years, inconsistently denominated this key provision of Article I as both the "Contract Clause" and the "Contracts Clause."

The Plan is nothing more than an agreement, or contract between the interested parties to deal with the company's creditors and distribution of assets. The parties can come up with any agreement they want. They can agree that the Plan be in accordance with German law, European law, African tribe law or sharia law. As long as the fundamental protections, that the court is required to oversee, are in place, it is unconstitutional for the Court to interfere.

What the court cannot do, and it would be unconstitutional for the court to do, is impose a sharia plan on parties that didn't agree to it. That would be a ruling. It's not this case.

You really should pay attention to this because choice of law can be, and usually is, in contracts right at the formation stage. The parties can agree, before the dotted line is signed, that a contract dispute would be resolved under sharia law. That would not be voided as unconstitutional later either.

 

[Avatar4321]

Interesting case, but if the parties agree to it, I don't see how it can unconstitutional.

Quite frankly, if i was a creditor, I wouldn't care how i was repaid, as long as i was repaid.

 

[OohPooPahDoo]

This is a very disturbing ruling..

No it isn't.

 

[OohPooPahDoo]

If the creditors agree its not really an issue

If the creditors agree, there need not be a court ruling

I can tell how much you know about Chapter 11 bankruptcy.

The ruling of the court is unconstitutional.. for good reason

Is that your ruling as Chief Justice Numb Nuts who doesn't even know how bankruptcy works?

 

[The Rabbi]

There is nothing unconstitutional about it. It does not set a precedent that future bankruptcies must follow. It does not allow sharia law to dictate what terms must be adhered to. The creditors and debtor agreed to a plan. Chapter 11 is all about restructuring, which is what was done.

 

[OohPooPahDoo]

It isn't unconstitutional. The Constitution is a limit on the power of the government. This is approval of a bankruptcy plan. There is only one question, does the plan adequately protect the creditors. Other than that, it could be any kind of plan devised. This plan so happens to be compliant with sharia law.

The states gave up all power to bankruptcy and the uniformity of laws pertaining to to, to the federal government

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To accept the 'sharia' stipulations for bankruptcy at the state level is unconstitutional

"I'm happy to confirm the plan," said Judge Sean Lane of the U.S. Bankruptcy Court in Manhattan.

Its not a state court.

The debtor and its creditors can devise any legal plan they wish. Its not illegal to agree that interest will not be paid.

 

[OohPooPahDoo]

Dave, when all your right wing buddies are telling you you're wrong - and all the leftwingers as well - you're wrong.

 

[legaleagle_45]

Arcapita's novel sharia bankruptcy plan approved | Reuters

This is a very disturbing ruling.. and it should be struck down quickly.. SHOULD...

Lets see how many actually understand why

I will tell you why it is not unconstitutional.

Merely because the plan is in accord with Sharia Law does not make it unconstitutional What is important is whether it is in accord with bankruptcy law and does not otherwise offend the Constitution.

1st criteria... There are many complex rules which govern Chapter 11 plans but I will not cover all of them except the most important. A creditor who is not payed in full under the plan must receive at least as much as that creditor would have received in a chapt 7 liquidation, including a component for interest on deferred payments.

In this case, the plan does exactly that although it does not call the extra money to be received "interest", but that is irrelevant. The plan can call it annual egg money bonus payments from Hocus Pocus if it wants to, so long as the net amount of payments actually provided for meet or exceed the basic Chapt 11 criteria.

That the plan is stated as being in accord with Sharia Law does not violate the 1st Amend, as a Chapter 11 plan is a plan proposed by the debtor and not the government. So long as the plan does not create a legal obligation on the part of any participant to abide by Sharia Law there is not problem... a more common example is chapter 13 plans which provide a budget based upon the debtor providing monthly donations to the debtors church. The court can not impose that obligation, but can approve a plan proposed by the debtor which includes such a provision.