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Krystal Energy Co. v. Navajo Nation, No. 02-17047 (9th Cir. February 10, 2004) Because Indian tribes are domestic governments, their sovereign immunity is congressionally abrogated (abolished or annulled) by Bankruptcy Code sections 106(a) and 101(27).
Are tribal per capita checks exempt?
Contribution by Gary Stickell, Arizona bankruptcy attorney. “It is a tribe by tribe analysis of their respective Ordinance.”
It appears the issue turns on the respective Tribe’s Gaming Revenue Allocation Ordinance. To the extent that the there is an anti-alienation/spendthrift provision in the Ordinance, then the income should be listed as not property of the Bankruptcy Estate. Below are two cases which reflect that the Trial per capita checks are not property of the estate because of anti-alienation/spendthrift provisions in the respective ordinances, and an unpublished 9th BAP which confirms this approach where there was no such provision.
(Note – most likely the potential debtor is using federal exemptions, but counsel needs to consider the circumstances.)