The Bankruptcy Protector
Procedure
The Bankruptcy Protector
This blog entry will be the first in a new, ongoing series of entries in the “Bankruptcy Protector” that will attempt to familiarize new attorneys and non-bankruptcy practitioners with the basic concepts of bankruptcy law of which all lawyers should be aware.
The Bankruptcy Protector
The Bankruptcy Protector
Federal Rule of Bankruptcy Procedure 3002.1 was implemented to protect debtors from unanticipated deficiencies in residential mortgage payments following a chapter 13 discharge, and the Bankruptcy Court for the District of Puerto Rico’s recent opinion in In re Feliciano Figueroa[1] illustrates how detrimental the rule can be to inattentive mortgage holders.
A Texas bankruptcy court’s decision earlier this year to dismiss the National Rifle Association’s (“NRA”) chapter 11 bankruptcy case as a bad faith filing illustrates the perils of a poorly planned chapter 11 filing, and highlights the need, even in crisis situations, to establish solid objectives and develop a sound strategy prior to seeking relief under the Bankruptcy Code. In re Nat’l Rifle Ass’n of Am., 628 B.R. 262 (Bankr. N.D. Tex. 2021).
Section 105 of the U.S. Bankruptcy Code, titled “Power of Court,” is often cited and used as a “catch-all” provision when requesting certain relief or when a bankruptcy court enters an order granting (or denying) certain relief not prescribed by a particular provision of the Bankruptcy Code. That section provides that a “court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title . . .
The Bankruptcy Protector
The Bankruptcy Protector
Most bankruptcy practitioners are familiar with the intentionally broad scope of discovery under Bankruptcy Rule 2004. However, there are limits to this discovery and the “pending proceeding” rule can be a useful tool to limit the scope of discovery in the appropriate circumstances.
Bankruptcy Rule 2004