Addressing an issue of first impression, the Second Circuit held recently that bankruptcy courts have inherent authority to impose non-nominal civil contempt sanctions, including per diem sanctions and attorneys’ fees, arising out of an attorney’s failure to comply with the bankruptcy court’s discovery orders.

In a recent decision by the influential Third Circuit Court of Appeals, In re KB Toys Inc., 2013 U.S. App. LEXIS 23083 at *17 (3d Cir. Nov. 15, 2013), the Court decided that “the cloud on the claim” stemming from a preferential payment made to the original claimant continues with the claim, which then could be disallowed.