Central Virginia Community College v. Katz

In Central Virginia Community College v. Katz (2006), the U.S. Supreme Court held that Eleventh Amendment sovereign immunity, which protects states and their agencies from litigation, did not bar adversarial proceedings brought by a Chapter 11 bankruptcy trustee to set aside alleged preferential payments that operators of a bankrupt bookstore made to public institutions of higher education. In other words, the Court affirmed an earlier order that when four colleges in Virginia received funds from a bookstore that was operating under the protection of a federal bankruptcy court, they were not immune from litigation to recover these monies in an action filed by the judicially appointed liquidating supervisor. The Court rejected the colleges' argument that their Eleventh Amendment immunity protected them from such claims as ...