The breadth and scope of the Bankruptcy Code’s automatic stay and the potential cost a company may face for violating the stay made national news last week in a dust-up between two telecom providers, when the U.S. Bankruptcy Court overseeing Windstream’s bankruptcy case ordered Charter Communications to pay Windstream more than $19 million in damages. The automatic stay is triggered immediately when a bankruptcy petition is filed.

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.