1. AUTOMATIC STAY -

1.1 Covered Activities -

Taggart v. Lorenzen standard applies to stay violation in a corporate case. The debtor sold assets prepetition. After the petition date, the buyer demanded payment of certain working capital adjustments provided under the purchase agreement. The automatic stay prohibits any act to collect or recover a prepetition claim. Section 362(k) allows an individual debtor to recover damages for willful violation of the stay. Under Sixth Circuit law, it does not protect non-individual debtors. Therefore, the remedy for a stay violation in a non-individual debtor case is a civil contempt citation under section 105(a). Taggart v. Lorenzen, 139 S. Ct. 1795 (2019), applied the general standards for a civil contempt citation to a violation of the discharge injunction, permitting a contempt finding only if the actor had no objectively reasonable basis on which to assert the discharge injunction did not apply. But in dicta, the decision distinguished automatic stay violations in individual debtor cases, suggesting a strict liability standard might be appropriate. Because section 362(k) does not apply in non-individual debtor cases, the distinction does not apply; the general civil contempt standards apply. In this case, compliance with the purchase agreement regarding purchase price adjustments would not violate the stay, but the belated demand for payment did. However, the seller had an objectively reasonable basis to conclude that the action did not violate the stay. Therefore, the court denies the request for sanctions. Harker v. Eastport Holdings, LLC (In re GYPC, Inc.), ___ B.R. ___ (Bankr. S.D. Ohio Nov. 22, 2021).