Post-Confirmation Jurisdictional Shrinkage

A case under Chapter 11 of the Bankruptcy Code is commenced upon the filing of a “petition” for relief and may be “closed” after a Chapter 11 plan of reorganization or liquidation is “confirmed” and the bankruptcy estate has been “fully administered.” See 11 U.S.C. §§ 301, 350. In recent years, the pace of bankruptcy cases has accelerated. Cases are being filed and plans of reorganization or liquidation are being confirmed within months of filing. The post-confirmation period to administer the confirmed plan, however, often through the use of post-confirmation vehicles such as litigation, creditor or liquidation trusts, may take many years to complete. As a result, the scope of a bankruptcy court's subject matter jurisdiction after confirmation of a Chapter 11 plan, often referred to as “post-confirmation jurisdiction,” is becoming increasingly relevant. Although Congress has not expressly addressed when and under what circumstances bankruptcy jurisdiction ends, most courts agree that a bankruptcy court's jurisdiction “shrinks” after confirmation of a plan. This article discusses the factors that courts take into consideration in determining the extent of the post-confirmation jurisdictional shrinkage.