HomePublicationsNewsletter ArchiveVolume 24Issue 4FEDERAL COURT AFFIRMS SOVEREIGN IMMUNITY AND DISMISSES TRIBE FROM ADVERSARY PROCEEDING RELATING TO GREEKTOWN BANKRUPTCY

In a detailed 36-page opinion issued on Tuesday of this week, the United States District Court for the Eastern District of Michigan affirmed the sovereign immunity of the Sault Ste Marie tribe of Chippewa Indians and Kewadin Gaming Authority in adversary proceedings brought by the Litigation Trustee (“Trustee”) for the Greektown Litigation Trust. The adversary proceedings focused on transfers totaling $177 million made by the debtor in advance of the filing for bankruptcy which the Trustee alleged were improper.  The Trustee sought to have the transfers voided and the money recovered under the bankruptcy code and the Michigan Uniform Fraudulent Transfers Act.

Citing existing precedent requiring a tribe to expressly waive its sovereign immunity either in its charter or by agreement, the court found that no such express waiver had occurred.

The court also rejected arguments made by the Trustee that the tribe’s conduct in connection with the bankruptcy litigation had created an implied waiver of immunity.

“In absence of a different direction from Congress or the Supreme Court or the Sixth Circuit limiting the breadth of tribal immunity, this  court is constrained to reject the Litigation Trustee’s novel theory of implied waiver”.

The Trustee could potentially appeal the decision to the Sixth Circuit Court of Appeals.

 

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