Whether Section 106(a) of the Bankruptcy Code abrogates the federal government's sovereign immunity for both a trustee's federal claim under Section 544(b) and the underlying state-law fraudulent transfer cause of action

No question identified. : 2 writ of certiorari will expire on November 30, 2023. The jurisdiction of this Court would be invoked under 28 U.S.C. 1254(1). 1. The Bankruptcy Code creates various mechanisms to enable a trustee to recover transferred property for the estate. As relevant here, Section 544(b) of the Code provides that a “trustee may avoid any transfer of an interest of the debtor in property or any obligation incurred by the debtor that is voidable under applicable law by a creditor holding an unsecured claim that is allowable under section 502 of this title or that is not allowable only under section 502(e) of this title.” 11 U.S.C. 544(b) (1). Section 544(b) thus establishes a two-step framework: a trustee must first show that the relevant transfer “is voidable under a applicable law” by an unsecured creditor; if so, a trustee “may avoid” the transfer within the bankruptcy proceeding. In turn, 11 U.S.C. 550(a) (1) provides that “to the extent nu that a transfer is avoided under section 544,” the trustee “may recover, for the benefit of the estate, the property transferred, or, if the court so orders, the value of such property, from * * * the initial transferee of such transfer or the entity for whose benefit such transfer was made.” Section 106(a) of the Code waives the United States’ sovereign immunity from particular claims that can be asserted in a bankruptcy proceeding. It provides that “[n]otwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a governmental unit to the extent set forth in this section with 3 an respect to,” as relevant here, “Section[] * * * 544.” 11 U.S.C. 106(a) and (1). Section 106 clarifies, however, that “[n]othing in this section shall create any substantive claim for relief or cause of action not otherwise existing under this title, the Federal Rules of Bankruptcy Procedure, or nonbankruptcy law.” 11 U.S.C. 106(a) (5). 2. In April 2017, All Resort Group, Inc. (ARG) filed for voluntary Chapter 11 bankruptcy. App., infra, 18a. In June 2014, nearly three years before ARG filed for bankruptcy, ARG paid roughly $145,000 to the Internal Revenue Service to cover the personal tax debts of two of its principals, both of whom were ARG shareholders, officers, and directors. Id. at 19a. At the time of the payments, ARG was already insolvent. Ibid. In September 2017, on ARG’s motion, the bankruptcy court converted the case to a Chapter 7 bankruptcy and appointed a trustee. App., infra, 3a, 18a. The trustee brought an adversary proceeding against the United States to avoid the payments to the IRS under Section 544 (b). Id. at 3a, 19a. The trustee asserted that there existed an actual creditor -a former employee with an unpaid judgment resulting from an employment discrimination lawsuit against ARG -who could bring a lawsuit to avoid the transfer under applicable state law, namely, the Utah Uniform Fraudulent Transfer Act (UUFTA), Utah Code Ann. §§ 25-6-1 et seq. (West 2014). App., infra, 19a. UUFTA authorizes plaintiffs to recover transfers that are fraudulently constructive due to the insolvency of the 4 transferor, subject to a four-year limitations period. Utah Code Ann. §§ 25-6-10 (West 2014). The United States moved for summary judgment, arguing that a UUFTA suit by an actual creditor against the United States to recover the tax payments would be barred by both sovereign immunity and the Supremacy Clause, U.S. Const. Art. VI, Cl. 2. See App., infra, 3a-4a, 12a-13a. Accordingly, the government argued, the challenged payments were not “voidable under applicable law by a creditor holding an unsecured claim.” 11 U.S.C. 544(b) (1). The trustee cross-moved for summary judgment, arguing that Section 106(a) abrogates the United States’ immunity not only as to the trustee’s Section 544(b) suit, but also as to the underlying statelaw cause of action. App., infra, 4a. He further argued that the Supremacy Clause was no bar because Section 544(b) establishes a federal c