Automatic Stay

News & Analysis as of

Can a Creditor’s Inaction Violate the Automatic Stay?

The filing of a bankruptcy case puts in place an automatic injunction, or stay, that halts most actions by creditors against a debtor. But can a creditor violate the automatic stay by not acting? The Tenth Circuit recently...more

Tenth Circuit Joins Missouri River to Divide Kansas City Over What Constitutes A Stay Violation

On February 27, 2017, the United States Court of Appeals for the Tenth Circuit joined a minority approach followed by District of Columbia Circuit: failing to turn over property after demand is not a violation of the...more

Does “Act” Mean Also a Failure to Act?

No, says the U.S. Court of Appeals for the Tenth Circuit in In re Cowen, adopting the minority rule and parting ways with four other Courts of Appeals. The automatic stay provision of the Bankruptcy Code addressed in Cowen...more

In Real Life the Bad Guy Sometimes Gets Away: Adding Judgment Debtors to a Judgment

As most litigators will tell you a plaintiff in a civil lawsuit needs to be able to prove both liability and damages to win a case. That is, you need to show both that the defendant is liable under the law and that you have...more

Exercise of Post-Petition Right to Setoff Without Court Permission Violated Automatic Stay

On November 16, 2016, the United States Bankruptcy Court for the Western District of Kentucky found that a creditor exercising its post-petition right to setoff without bankruptcy court permission had violated the automatic...more

Third Circuit Court of Appeals: Energy Future Required to Pay Make-Whole Payments

In a decision released on November 17, 2016, the Third Circuit Court of Appeals reversed the holding of the Delaware Bankruptcy Court, affirmed by the District Court, that EFIH is not required to pay make-whole payments. In...more

EFIH Noteholders Find Redemption for the Payment of Make-Whole Premiums

On November 17, 2016, the United States Court of Appeals for the Third Circuit issued a decision in which it held that holders of first lien notes and second lien notes of Energy Future Intermediate Holding Company LLC and...more

Seeking Punitive Damages Can Expand Scope of Discovery

As litigators are well aware, a lawsuit frequently begins and ends with discovery. Complaints must be carefully worded and allegations carefully chosen in order to maximize success in developing a record and in exploring...more

Two non-conventional uses for Missouri’s new receivership statute

Missouri’s new receivership statute became effective on August 28, 2016. The new statute, called the Missouri Commercial Receivership Act (or “MCRA”) and codified at Chapter 515 of the Missouri Revised Statutes, provides a...more

Producers Beware: What happens when your movie distributor files bankruptcy? Part 2.

In my blog article on August 9, I focused on some of the issues that licensors need to be aware of as they license IP rights, including the concept of allowing distributors to include “damages only” clauses in the...more

Asia Pacific Restructuring & Insolvency Guide: Hong Kong

This is the Hong Kong chapter of the second edition of the White & Case Asia Pacific Restructuring and Insolvency Guide... ..Introduction - On 1 July 1997, Hong Kong became a Special Administrative Region of the...more

The Right To Countersecurity From A Debtor In Bankruptcy

U.S. maritime law offers a maritime plaintiff two principal means of obtaining security for its claims: Rule B attachment in respect of maritime claims, and Rule C arrest in respect of maritime liens. These rules are...more

The Impact of PROMESA on Creditors

On June 30, 2016, the United States Senate passed the “Puerto Rico Oversight, Management and Economic Stability Act” (“PROMESA”) and it was quickly signed into law by President Obama. PROMESA enables the Commonwealth of...more

Creditors Beware-Automatic Stay Violations Can Lead to Massive Punitive Damages

Ohio Bankruptcy Judge Assesses $250,000 in Damages Against Mortgage Lender for Violating the Automatic Stay in Bankruptcy Proceeding - A clerical error by a mortgage lender led to punitive damages and expensive...more

Missouri Commercial Receivership Act Creates a New Statutory Scheme Which Presents a More Robust Remedy

The Missouri Commercial Receivership Act (MCRA), passed by the Missouri legislature and just signed into law by Governor Nixon, becomes effective Aug. 28, 2016. It expands, clarifies and fleshes out the existing minimal...more

Real Property & Title Insurance Update: Week Ending July 29, 2016

REAL PROPERTY UPDATE - Foreclosure/Automatic Stay: because final judgment entered day after defendant’s petition for bankruptcy, automatic stay imposed by 11 U.S.C. § 362 was in effect and, thus, judgment was void, even...more

PROMESA Shields Puerto Rico Behind a New Automatic Stay

On June 30, 2016, President Obama signed the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) into law. The most significant portions of PROMESA are found in titles I and II, which establish an...more

How Reporting a Crime May Subject You to Sanctions

You are a creditor and your loan is secured by personal property, let’s say equipment. The borrower recently filed for bankruptcy protection. You receive a phone call from a friend advising you that someone has a moving...more

Bankruptcy Pitfalls: How an infringer's bankruptcy could impact your IP rights

As a patent owner, you have the exclusive right to prevent others from making, using, selling, offering for sale, or importing your claimed invention into the United States. You also have the ability to recover damages from a...more

Which court is which? Brexit could impact on enforcement options for creditors within, and outside, the EU

England has been the jurisdiction of choice for European restructurings. While other jurisdictions have sought to revamp their insolvency law in recent years in an effort to chip away at the English dominance in the...more

Bankruptcy Petition Costs Litigant Right to Appeal State Court

Learning the interplay between state rules of judicial procedure and federal bankruptcy law can be a daunting undertaking, but the pitfalls of failing to do so can be severe. A recent example of the importance of being...more

An Opportunity for Creditors to Enforce Prospective Waivers of the Automatic Stay

A recent ruling of the Bankruptcy Court for the Central District of California endorsed a path toward enforceability of prospective waivers of the automatic stay in certain circumstances. In short, such a waiver approved in a...more

CR&B Alert - Commercial Restructuring and Bankruptcy News - May 2016, No. 2

Can A Bank-Appointed Director Block A Bankruptcy Filing By A Borrower? The scenario is fairly typical. A loan goes into default and the bank and the borrower enter into a Forbearance Agreement. One of the conditions of...more

District Court Rules Pending False Claims Act Case Should Not Be Stayed Due to Bankruptcy Proceedings

On April 26, 2015, the United States District Court for the Middle District of Florida declined to stay a pending False Claims Act (FCA) case due to the defendants’ filing of bankruptcy....more

“The ABC’S of ACB’S” – Arbitration Clauses in Bankruptcy Court

You’ve decided that your business will fare better if you put a mandatory arbitration clause into all of your contracts. You want to be fair to your counterparty, so you choose to arbitrate under the Federal Arbitration Act....more

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