The time to withdraw a lawsuit to bankruptcy court is governed by a general federal statute that doesn’t refer to bankruptcy, not the Bankruptcy Rule that specifically governs withdrawals to bankruptcy cases, a district judge says.
Changing the rule under the former Bankruptcy Act, the Code and Federal Rule 24 now allow bankruptcy courts to impose deadlines for creditors to join involuntary petitions.
The Fourth Circuit’s nonprecedential opinion means that chapter 15 doesn’t have the exclusive remedy for enjoining U.S. litigation in cross-border bankruptcies.
Although there wasn’t ‘good cause’ to excuse late service of a summons and complaint, the bankruptcy court salvaged a large preference by exercising discretion and granting a 10-day expansion of the 90-day deadline.
In California, bringing litigation with a marginal possibility of success could be a bad bet whenever a contract permits one side to recover attorneys’ fees.