No. 25-731

Yellow Turtle Design, LLC, et al. v. Sonya Salkin Slott, et al.

Lower Court: Eleventh Circuit
Docketed: 2025-12-19
Status: Pending
Type: Paid
Tags: bankruptcy-code bankruptcy-distribution chapter-7-liquidation creditor-priority settlement-approval statutory-interpretation
Latest Conference: 2026-02-20
Question Presented (AI Summary)

Whether distributions to creditors in bankruptcy shall be done in the manner prescribed in the Bankruptcy Code?

Question Presented (OCR Extract)

In Czyzewski v. Jevic Holding Corp. , 580 U.S. 451, 457, 137 S.Ct. 973, 979, 197 L.Ed.2d 398 (2017) , this Court held, “The [Bankruptcy] Code makes clear that distributions of assets in a Chapter 7 liquidation must follow [the] prescribed order. §§ 725, 726 .” The Bankruptcy Court below approved a settlement which provided distributions to one unsecured creditor with out regard to statutorily prescribed priorities, t hereby engaging in “the priority shell game of sorts involved in Jevic.” 1 The Bankruptcy Code 2 prioritizes payment s to claim ants pro rata within each class. The Trustee in this chapter 7 case agreed to settle a cause of action belonging to the estate by payment to one unsecured creditor in violation of the statutorily -prescribed distribution scheme. Over the objection of excluded creditors, the bankruptcy court approved the settle ment. Lower courts, including conflicting Circuit Courts considered them selves unburdened by the clear directions of Congress and this Court. The question presented on which Courts of Appeals are divided is : Whether distributions to creditors in bankruptcy shall be done in the manner prescribed in the Bankruptcy Code? 1 In re Daily Gazette Co. , 584 B.R. 540, 546 (Bankr. S.D.W. Va. 2018) . 2 See 11 U.S.C. § 726(a) . 11 U.S.C. § 507(a) . 11 U.S.C. § 726(b) .

Docket Entries

2026-02-04
DISTRIBUTED for Conference of 2/20/2026.
2025-12-15
Petition for a writ of certiorari filed. (Response due January 20, 2026)

Attorneys

Yellow Turtle Design, LLC, et al.
Kevin C. GleasonFlorida Bankruptcy Group, LLC, Petitioner
Kevin C. GleasonFlorida Bankruptcy Group, LLC, Petitioner