In January 2020, we analyzed a split among the Circuit Courts regarding whether a non-debtor holding a debtor’s property on the petition date has an affirmative obligation under section 362(a)(3) of the Bankruptcy Code to return that property to the debtor immediately following the filing of the bankruptcy petition.

As the Courts have often stated, in bankruptcy and insolvency law, time is of the essence. Bankruptcy and insolvency legislation allows the Court to craft orders with the specific aim of shielding a Receiver against frivolous actions, such that the Receiver may complete his task of managing property while enforcing the rights of a secured creditor in a timely fashion. The HRH Hotels Ltd. case is one such example where the Court ruled that a plaintiff's claim against the Receiver was frivolous and constituted a collateral attack on the Receivership process.