One of the requirements for an involuntary filing is that the creditors seeking relief (referred to as “petitioning creditors”) must each have a claim that is not subject to a “bona fide dispute as to liability or amount.” This begs the question: is a partially disputed claim subject to a bona fide dispute that would deprive the creditor of standing to join an involuntary bankruptcy filing? Courts have historically reached conflicting holdings on this question.

Originally published in Business Credit, March 2024.