Goldman Sachs Loses Bankruptcy Arbitration Bid in Fourth Circuit

The Fourth Circuit affirmed a lower court’s denial of Goldman Sachs’ bid to compel arbitration in a suit alleging the bank violated US bankruptcy law.

The majority of a three-judge US Court of Appeals for the Fourth Circuit panel held that arbitration inherently conflicts with the core purposes of the US bankruptcy code, including centralized proceedings to resolve disputes.

The opinion, written by Judge Paul V. Niemeyer and joined by Judge Pamela A. Harris, emphasized bankruptcy’s unique constitutional status as a counterpoint to the US Supreme Court’s history of favoring arbitration of statutory claims.

However, Judge Robert B. King dissented. ...