Whether a federal court overseeing an equity receivership has the power to enjoin and extinguish claims that belong to non-receivership entities against non-receivership third parties without the claimants' consent

This case presents a clear conflict regarding the power of federal courts overseeing an equit y receivership to extinguish third -party claims against non-receivership entities without the claimant’s consent. Federal courts have long utilized receiver s to manage the affairs of corporate debtors and ensure a fair division of funds among its creditors. Somewhat recently, receivers began requesting and receiving from district courts “bar orders” when settling claims for the receivership . The receiver, acting for the receivership entities, settles with an adverse party and, t o facilitate the settlement, includes a bar order enjoining all other claims against the settling party relating to the receivership —even claims belonging to third parties. The circuits are split 4 -1 on whether federal courts have the power to bar third -party claims agaist non receivership entities . The Sixth Circuit holds that federal courts cannot enjoin claims against non receivership entities that “belong” to a third party. In stark contrast, the Fifth, Tenth, Eleventh, and now the Ninth Circuit all permit federal courts to bar these third -party claims without consent . The question presented is: Whether a federal court overseeing an equity receivership has the power to enjoin and extinguish claims that belong to non-receivership entities against non-receivership third parties without the claimants’ consent.