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 superficially similar, but each has different criteria and serves a different purpose. Each also gives the defendant the opportunity to obtain countersecurity on related counterclaims. However, what happens when the plaintiff is in bankruptcy, subject to a bankruptcy court’s automatic stay of proceedings against it? Can a debtor be compelled to give countersecurity in such a case? This article discusses a recent decision from a bankruptcy court in (of all places) Colorado that helps answer this question.
Originally published in Maritime and Transport Law September 2016 Newsletter Vol. 12 No. 2.