Delaware Invites Certified Questions from Bankruptcy Courts

Abstract

Think of a cutting-edge legal question of Delaware corporate law. Now imagine that the Delaware Supreme Court has never resolved the question and that it comes up in bankruptcy proceedings. The bankruptcy court must either decide the open issue or find some way to ask for Delaware’s opinion. Certification is one way to ask. In October 2013, the Delaware legislature and rule-makers took the final step necessary to allow the Delaware Supreme Court to hear questions certified to it by U.S. bankruptcy courts throughout the country. This article analyzes this innovation, putting it into the context of bankruptcy certification nationwide and the Delaware experience with certification. It identifies two significant obstacles: courts’ reluctance to send questions to courts in other states and the potential for delay. Finally, it proposes ways that courts and legislatures can overcome these obstacles to make certification an effective tool for resolving Delaware corporate-law questions that arise in complex bankruptcy proceedings.