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Automatic Stay

Critically Thinking About Your Critical-Vendor Status

July 2023

Bankruptcy Code
105
Topic Tags
Automatic Stay
Bankruptcy Litigation
Executory Contracts/Leases
Unsecured Trade Creditors

Delaware and New York District Courts Split on Permissibility of Non-Debtor Releases

Upholding confirmation of the Boy Scouts’ chapter 11 plan, the district judge in Delaware disagreed with his counterpart in New York who found no statutory power to impose non-consensual, non-debtor third-party releases.

3rd Circuit
Delaware

A Lawsuit to Collect a ‘DSO’ Runs the Risk of Violating the Automatic Stay

Although collecting a ‘DSO’ from non-estate property is permitted by Section 362(b)(2)(B), a district judge says that an in personam suit against the debtor can violate the automatic stay.

4th Circuit
Virginia
Virginia Western District

Renewing a Title Loan Just Before Chapter 13 Didn’t Make the Filing in Bad Faith

Ruling the other way would have barred chapter 13 filings after renewing title loans.

11th Circuit
Alabama
Alabama Middle District

Benchnotes May 2023

May 2023

Bankruptcy Code
Section 362(k)
329
2016
Topic Tags
Automatic Stay
Claims
Bankruptcy Litigation
Corporate Governance
Ethics
Fraudulent Transfers
Professional Compensation/Fees
Consumer Bankruptcy
Family/Divorce Issues

Borrego Adds a New Tool to the Health Care Debtor’s Toolbox

May 2023

Bankruptcy Code
11 U.S.C. § 362
Topic Tags
Automatic Stay
Bankruptcy Litigation
Business Reorganization
Health Care

Dismissal Isn’t Mandatory if a New Filing Is Within 180 Days of a Voluntary Dismissal

Courts are split on whether Section 109(g)(2) mandates dismissal whenever an individual or family farmer refiles within 180 days, regardless of whether a lift-stay motion prompted dismissal of the first case.

3rd Circuit
Pennsylvania
Pennsylvania Eastern District

Seventh Circuit Upholds $9.5 Million in Sanctions for Violating a Plan Injunction

When there was a knowing violation of injunctions in the plan and confirmation order, the Seventh Circuit said that the appeal bordered on frivolous.

7th Circuit

Stay Violator Held Liable for Debtor’s Attorneys’ Fees Incurred to Collect Damages

When a stay violator refused to reimburse debtor’s counsel for fees to stop the stay violation, Judge Rebecca Connelly awarded attorneys’ fees for time spent to collect attorneys’ fees.

4th Circuit
West Virginia

Third Circuit Reverses and Dismisses J&J’s ‘Baby Powder’ Chapter 11 Case

Circuit Judge Thomas Ambro prohibits big companies from filing chapter 11 cases absent ‘financial distress.’

3rd Circuit
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