“I get knocked down / But I get up again / You’re never gonna keep me down.”
– Chumbawumba
The automatic stay is a powerful tool of the Bankruptcy Code, affording debtors a breathing spell from creditors seeking payment. Section 362(k)(1) of the Bankruptcy Code reinforces the stay by allowing individual debtors to recover actual and punitive damages for willful violations.
The extent of a transferee’s knowledge in the context of fraudulent transfer claims under the Bankruptcy Code has been a frequent topic of discussion on the Weil Bankruptcy Blog.
In yesterday’s post, we published a speech in which Harvey Miller discussed how he got started practicing bankruptcy law. Today, we are publishing the text of a speech that Harvey gave in March of 2014 on the 40th anniversary of the Southeastern Bankruptcy Law Institute, at which Harvey was a frequent speaker. In this speech, Harvey looked back at the evolution of bankruptcy law over the past 50 years.
Introduction
“The past can’t hurt you anymore, not unless you let it.” – Alan Moore, V for Vendetta
To paraphrase Samuel Johnson, publication notice is, quite often, the debtor’s “last refuge.” Yet it is frequently a necessary feature of the notices provided in bankruptcy cases. Debtors rarely possess an accurate method for notifying the many unidentifiable potential claimants. And so enters publication notice. Pursuant to well-settled law, publication notice – if sufficient – may satisfy the requirement to provide due process to unknown creditors in a bankruptcy proceeding.
As one bankruptcy court has said, “[b]ecause deals are the heart and soul of the [c]hapter 11 process, bankruptcy courts enforce them as cut by the parties.” Unfortunately, however, deals do not always turn out as the parties expected and there is sometimes litigation to determine what exactly was bargained for in a chapter 11 plan.
The United States Bankruptcy Court for the Southern District of Texas in In re Waco Town Square Partners, L.P., et al. considered whether it had the authority to order a non-debtor to dismiss a state court lawsuit.
Providing proper notice to existing and potential creditors is an important consideration for debtors’ counsel. A seminal Supreme Court decision established that due process for “unknown” claimants is generally satisfied by publication notice, so long as it is reasonably calculated to reach such creditors under the circumstances.