When to Request Relief from the Automatic Stay

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it. QUESTION: How do I know if I should request relief from a debtor’s automatic stay? ANSWER: What is the Automatic Stay? Section 362 of the Bankruptcy Code provides for the automatic stay. The automatic stay, triggered immediately upon the debtor’s filing of a bankruptcy petition, bars nearly all actions against the debtor and its property, including actions to exercise […]

A written tour of business bankruptcy and its alternatives Editors’ Note:  If you are a regular reader of this column, you will know that this is the third installment in a row about the automatic stay (it is a big topic and we didn’t want to lay too much on you at once).  If you’re growing bored of the topic, don’t despair, as our next installment will pan the camera back a bit and give you a flavor for how litigation in bankruptcy court works more generally. We’ll spend a […]

A written tour of business bankruptcy and its alternatives Our most recent installment in this series gives an overview of the automatic stay. In this installment we dive a little deeper, and we start with this question:  how do you know when a contemplated action would violate the stay and, thus, require stay relief before the action is taken? Consider these examples: a plaintiff believes that its lawsuit relates wholly to post-petition conduct, but the debtor alleges that it is based on pre-petition events; a creditor believes that it is exercising […]

A written tour of business bankruptcy and its alternatives We discussed the automatic stay from the perspective of a secured creditor in Installment #9 of this series.This time we pan the camera back and look at the automatic stay from a broader and more general perspective. It is sometimes said that the two primary objectives of chapter 11 are to maximize the going-concern value of the bankruptcy estate and to assure equality of distribution among similarly situated creditors. The automatic stay furthers both of these goals. It preserves going-concern value […]

A written tour of business bankruptcy and its alternatives Our prior installment discussed some of the basic things a secured creditor needs to know about Chapter 11. The automatic stay was one of them.  But, since we like to keep these things short (on the presumption that others also have short attention spans) we didn’t say all we want to say on the topic (in fact, this installment won’t satiate us either and we will continue to explain other aspects of the automatic stay in future installments). For now, we […]

A written tour of business bankruptcy and its alternatives In our past few installments we’ve been approaching our topic in a more or less chronological manner, explaining what generally happens first, second, third, and so on. We think it useful to switch convention and spend this and the next few installments talking about things from the perspective of specific players. This time, we focus on the secured creditor. What/who is a secured creditor?  Examples include (there are other possibilities): The holder of a real estate mortgage A bank with a […]

A written tour of business bankruptcy and its alternatives Subsequent installments in this series will cover the concepts touched upon here in more detail.  We think it prudent, if not necessary, to at least throw some basic chapter 11 concepts on the table now, however, since they are so fundamental to any Chapter 11 case- regardless of which side of the table you sit on. The Automatic Stay Commencing a bankruptcy case triggers an “automatic stay,” which, with certain exceptions (carved out by §362(b)), operates as an injunction against actions […]