On May 23, 2023, the Supreme Court issued a unanimous ruling that invalidated a Minnesota tax lien statute that permitted municipalities to foreclose on a tax lien and to keep the surplus proceeds after a sale. The Court found that such a system, which is present in 12 states, violates the Fifth Amendment Takings Clause. The parties impacted by this ruling include consumer homeowners, small business owners, the municipalities that used this process, and private lien buyers that used the process to step into the municipality’s shoes and enjoy a substantial windfall. There are bankruptcy implications for this conduct. In Massachusetts there is a section 548 claw back proceeding pending in bankruptcy court. Class actions are being filed against municipalities in several states. This panel will discuss the opinion and the bankruptcy-related fallout.
NOTE: There are no written materials for this program. The content of this program does not meet requirements for continuing legal education (CLE) accreditation.
