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Bankruptcy Creditors' and Debtors' Rights Legislation

Second Circuit Rejects Arbitration of Debtor’s Asserted Discharge Violation

A bankruptcy court properly denied a bank’s motion to compel arbitration of a debtor’s asserted violation of the court’s discharge injunction, the U.S. Court of Appeals for the Second Circuit held.

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A bankruptcy court properly denied a bank’s motion to compel arbitration of a debtor’s asserted violation of the court’s discharge injunction, the U.S. Court of Appeals for the Second Circuit held on March 7, 2018. In re Anderson, 2018 U.S. App. LEXIS 5703, 20 (2d Cir. Mar. 7, 2018). Finding a purported “inherent conflict between arbitration of [the debtor’s] claim and the Bankruptcy Code,” the Second Circuit reasoned that the bankruptcy court “properly considered the conflicting policies in accordance with law.” Id., quoting In re United States Lines, Inc., 197 F.3d 631, 641 (2d Cir. 1999).

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