Business Bankruptcy Litigation

Corporate Bankruptcy Litigation Attorneys

When a dispute cannot be resolved through skilled negotiation, bankruptcy litigation may be appropriate. Unlike lawsuits in civil cases outside bankruptcy, bankruptcy litigation is a subset of the larger bankruptcy case.
At Jordan, Kowal & Apostol, our bankruptcy litigation attorneys have extensive experience representing debtors, creditors and other parties in contested matters.

Adversary Proceedings in Bankruptcy Cases

A bankruptcy adversary proceeding most closely resembles traditional litigation and may involve such matters as:

A creditor’s objection to a debtor’s discharge. Once a debtor is discharged in bankruptcy, the obligation to repay the debt is erased. A creditor may file an adversary proceeding arguing that the debt cannot be discharged because it was obtained through fraud or that the bankruptcy case was filed in bad faith.
A debtor’s objection to a creditor’s action. If a creditor violates the statutory protections afforded the debtor under the bankruptcy code, a debtor may file an adversary proceeding.
A trustee may claim that a transfer of assets or payments made before the filing of the bankruptcy amounted to a preference—favorable treatment of this creditor compared with that extended to similarly situated creditors—and may seek to have them undone.
A trustee may also file an adversary proceeding claiming that a transfer of assets before a bankruptcy filing was a fraudulent conveyance or that a transfer made in the year preceding filing was meant to keep assets out of the hands of creditors.

Motion for Relief of Automatic Stay in Bankruptcy Cases

Once a business bankruptcy case has commenced, creditors are stayed, or prevented, from foreclosing on or repossessing a debtor’s collateral, proceeding with lawsuits against the debtor that were filed outside bankruptcy court or garnisheeing the debtor’s assets or wages.

A creditor may file a motion for relief of automatic stay in the bankruptcy case, asking the judge to allow it to move against the debtor or the debtor’s property. To obtain relief, the creditor must show that its interest in the property is not adequately protected. For example, a car creditor may argue that the vehicle is uninsured and that it is therefore entitled to repossess the car.

The creditor may also claim that the debtor has no equity in the property and that it is not needed for reorganization. An auto loan creditor might claim that a debtor trucking company owes more on the vehicle than it is worth and that the vehicle is not needed for restructuring — for instance, an auto loan for an executive’s luxury car rather than a loan for a tractor-trailer.

Assuming or Rejecting an Executory Contract in a Bankruptcy Case

When a business bankruptcy case is filed, there may exist executory contracts or agreements under which both sides still have obligations. The most common type of executory contract is an unexpired lease, requiring a tenant to pay rent to the landlord in return for possession of the premises.

A bankruptcy trustee may file a motion asking the bankruptcy court to assume or accept the executory contract or reject it.

Contact Bankruptcy Litigation Attorneys

At the Chicago-based business boutique law firm Jordan, Kowal & Apostol, we represent debtor companies, creditors and lenders across the United States in business bankruptcy litigation matters.

To find out how Jordan, Kowal & Apostol can help you with a business bankruptcy litigation needs, contact Gregory Jordan by calling 312-854-7181, e-mailing gjordan@jka-law.com or filling out our online contact form.