Mankus & Marchan, LTD | Tony Mankus
The concept of overeign immunity traces its roots to English common law. It is the doctrine that the sovereign (the King or Queen in those days), or the State (today) cannot commit a legal wrong and is immune from civil suit or criminal prosecution. Generally speaking, most government entities (Federal, State and Municipal) have sovereign immunity, although they often waive it under specific exceptions in order to allow the courts to adjudicate some issues. Sec. 106 of the Bankruptcy Code provides such an exception. An example would be that IRS files a claim against a Debtor in bankruptcy alleging that the Debtor owes unpaid taxes. The Bankruptcy Court has jurisdiction to determine the validity of IRS' claim if the Debtor disputes it.
Answer Applies to: Illinois
Law Office of Raymond J. Dague, PLLC | Raymond J. Dague
106 is a section of the bankruptcy code which pertains to whether and when the bankruptcy court discharge a debtor's debt which is owed to a sovereign entity, such as a state or its subdivisions. It is a tricky section of the bankruptcy code, but it only is in play of the debtor fining bankruptcy has tax or other debts to a state or municipality.
Answer Applies to: New York