Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to firstname.lastname@example.org and we will try to answer it.
How do I know if I should request relief from a debtor’s automatic stay?
At the outset of a bankruptcy case, a secured creditor, a party to litigation in another court, or any other party potentially entitled to stay relief must decide whether to request relief from the automatic stay. The factors to be considered in making this decision differ depending on the type of bankruptcy case and the type of stay relief. As explained in further detail by Mark L. Radtke and Peter J. Roberts here, a secured creditor may conclude that the value of its collateral will be enhanced through the continued operation of a debtor’s business, whereas in the alternative, the creditor should promptly seek relief from the stay.
Note: This 90 Second Lesson is based, in substantial part, in material reprinted from Commercial Bankruptcy Litigation 2d and Strategic Alternatives for and Against Distressed Businesses, with permission of Thomson Reuters. For more information about these publications, please visit www.legalsolutions.com.
The editors and editorial board of DailyDAC include preeminent restructuring and insolvency professionals, journalists, and editors. They are devoted to providing reliable and plain English education and deal intelligence about assignments, corporate bankruptcy, receiverships, out-of-court workouts and similar topics.
90 Second Lesson: Why Would a Debtor Choose to Liquidate Under Chapter 11?
90 Second Lesson: What is a Chapter 15 Proceeding of the Bankruptcy Code?
Dealing With Distress For Fun & Profit – Installment #12 – Stay Relief Strategy?
Dealing With Distress For Fun & Profit – Installment #11 – Is Stay Relief Necessary?
Dealing With Distress For Fun & Profit – Installment #10 – About the Automatic Stay
Dealing With Distress For Fun & Profit – Installment #9 – Secured Creditors & Chapter 11
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