Involuntary Bankruptcy: Limited Remedy and Strong Sanctions for Abuse

A bankruptcy court decision recently detailed how courts applying Bankruptcy Code §303(i) can sanction creditors who "abuse … the power given to [them] … to file an involuntary bankruptcy petition." The decision shows why the filing of an involuntary bankruptcy requires careful pre-filing legal judgment.

16 minute read July 01, 2019 at 12:07 AM
By
Michael L. Cook
Involuntary Bankruptcy: Limited Remedy and Strong Sanctions for Abuse

The remedy of involuntary bankruptcy "exists as an avenue of relief for the benefit of the overall creditor body …. [I]t was not intended to redress the special grievances, no matter how legitimate, of particular creditors …."

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