Bankruptcy Litigation

Issues are brought before the Court as either a contested matter or a adversary proceeding. Adversary Proceedings Handled like regular civil lawsuit under FRCP. Rule 7001 10 kinds of disputes that must be brought as adversary proceedings.

The filing of a petition under the Bankruptcy Code acts as an automatic stay against almost anything a creditor can do against the Debtor or its property. Absent approval from the bankruptcy court, creditors cannot file lawsuits, repossess collateral, enforce judgments, perfect liens, or set off debts.

DIS: whereas a preference is strictly mechanical, a fraudulent transfer involves the transfer of property of the Estate for inadequate value (“constructive fraud”) or actual fraud. Key Inquiry: effect the transfer has on the Estate. 

Bankruptcy Courts are part of the Federal Court system. To appeal a decision one must appeal to Bankruptcy Appellate Panel (BAP) of the Federal Circuit. From there appeals go to the Circuit Court of Appeals. Basis for appeal is similar to State and Federal appeals: legal error on the part of the Bankruptcy Court.