Stern v. Marshall And Jury Trials in Bankruptcy Cases

October 12, 2011Articles Dow Jones DBR Small Cap

Bankruptcy trials rarely result in a trial jury, but when they do, they pose great opportunity for success. Could the U.S. Supreme Court decision in Stern v. Marshall increase the number of jury trials in bankruptcy cases? The answer lies in how narrowly the decision is applied in the coming years.

Most bankruptcy practitioners have looked to three Supreme Court cases when evaluating whether a jury trial is an option: Katchen v. Landy, Granfinanciera, S.A. v. Nordberg and Langenkamp v. Culp. These cases established the notion that a bankruptcy trial would only be held in front of a jury if the party filed a proof of claim.

Among the reasons why a jury trial is preferred include that it is less expensive and may lead to a faster result because it ensures consecutive trial days from start to finish and requires a jury to make a decision faster than a judge may. In addition, many cases can appeal to a jury's emotions and help persuade them in one direction.

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