Supreme Court to Review Goldman Sachs Bankruptcy Arbitration Dispute
The US Supreme Court granted Goldman Sachs Bank USA's request to review whether bankruptcy courts may decline to enforce arbitration agreements in disputes involving alleged violations of the bankruptcy automatic stay. The case, brought by Apple Card holders Rhea Brown and Gregory Maze, follows Goldman Sachs' loss in the Fourth Circuit, which found that arbitration would conflict with bankruptcy law. The Court is expected to hear arguments next year and issue a decision by late June or early July.
Why it matters
The review leaves the enforceability of arbitration clauses in consumer credit agreements unsettled for Goldman Sachs and other creditors. Goldman Sachs told the Court that the ruling could affect many such agreements because arbitration clauses are widespread.
Key facts
- 1The Supreme Court granted Goldman Sachs Bank USA's petition in Goldman Sachs Bank USA v. Brown. finance.yahoo.com
- 2The dispute concerns whether a bankruptcy court can refuse arbitration of claims under Section 362(k) alleging that a creditor violated the automatic stay. finance.yahoo.com
- 3Rhea Brown and Gregory Maze allege that Goldman Sachs continued seeking payment on their credit card debts after they filed for bankruptcy. scotusblog.com
- 4The Fourth Circuit upheld the refusal to compel arbitration after a divided panel found that arbitration would conflict with bankruptcy law's policies and purposes. scotusblog.com
- 5The case is expected to be argued next year, with a ruling due by late June or early July. scotusblog.com
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.