Circuit split · bankruptcy law
Whether subrogation in bankruptcy is governed exclusively by 11 U.S.C. § 509, or whether a party seeking subrogation under § 509 must also satisfy the traditional five-part equitable subrogation test
1 federal appellate case on this question, each acknowledging the disagreement in its own words.
Tenth Circuit Court of Appeals · November 2, 1995
“There is a split of authority whether subrogation in bankruptcy court is governed exclusively by § 509, or whether the entity seeking subrogation under § 509 must also satisfy the five-part equitable subrogation test.” — Split of authority
Empirical analysis of this case →
The provision at issue
11 U.S.C. § 509 — Claims of codebtors
“(a) Except as provided in subsection (b) or (c) of this section, an entity that is liable with the debtor on, or that has secured, a claim of a creditor against the debtor, and that pays such claim, is subrogated to the rights of such creditor to the extent of such payment. (b) Such entity is not subrogated to the rights of such creditor to the extent that— (1) a claim of such entity for reimbursement or contribution on account of such payment of such creditor’s claim is— (A) allowed under section 502 of this title ; (B) disallowed other than …”Read the full section →
The other side of the split
Decisions the acknowledging court(s) named as the opposing or joined side, quoted in the acknowledging opinion's own words.
- Discussed · Bankr.D.Colo.Bank of America Nat'l Trust and Sav. Ass'n v. Kaiser Steel Corp. (In re Kaiser Steel Corp.)89 B.R. 150
- Discussed · Bankr.D.Minn.Photo Mechanical Servs., Inc. v. E.I. Dupont De Nemours & Co., Inc. (In re Photo Mechanical Servs., Inc.)179 B.R. 604
- Discussed · W.D.Wis.Beach v. First Union Nat'l Bank of North Carolina (In re Carley Capital Group)119 B.R. 646
- Discussed · Bankr.D.Conn.In the Matter of Agrownautics, Inc.125 B.R. 350
“646 , 648 (W.D.Wis.1990) (holding that issuer of letter of credit was not eligible for subro-gation under § 509(a) because it was not "liable with” the debtor but was independently liable to creditor) and In the Matter of Agrownautics, Inc., 125 B.R.” — CCF, Inc. v. First National Bank & Trust Co. of Okmulgee, acknowledging the split
What the split turns on
- Doctrines & tests:
- five-part equitable subrogation test
Cases are grouped by the legal question they announce a split on, classified from the court's own acknowledgment sentence. Verified acknowledgments only. Counter-side decisions are extracted from the acknowledging opinions' own text and linked only when the citation resolves in this corpus. See all circuit splits.