The Bankruptcy Act of 1984: Marathon Revisited

Abstract

On June 29, 1984, after two years of vigorous debate, Congress passed the Bankruptcy Amendments and Federal Judgeship Act of 1984, an Act that it hoped would resolve a continuing controversy over the bankruptcy system. The impetus for the new Act was the Supreme Court's 1982 holding in Northern Pipeline Construction Co. v. Marathon Pipeline Co. that certain provisions of the Bankruptcy Reform Act of 1978 were unconstitutional. Despite this recent congressional amendment, however, serious constitutional and practical problems persist. A constitutional challenge appears inevitable: one that will force the Court to revisit the legal issues first raised in the Marathon case. But reconsideration of the 1984 Act may not be limited to the courts. Practical difficulties resulting from the Act's convoluted two-tiered structure could well force Congress again to reassess the organization of the bankruptcy system.