Bankruptcy Court: Religious Court's Edict Violated the Automatic Stay

The US Bankruptcy Court for the Southern District of New York recently held that a Jewish religious court's anti-suit injunction against a chapter 11 debtor's principals violated the automatic stay and was without effect. The court's decision, which appears to be only the second avail...

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Bibliographic Details
Published in:American Bankruptcy Institute journal 2016-01, Vol.35 (1), p.30
Main Authors: Helman, Andrew C, Kornreich, Louis H
Format: Article
Language:English
Subjects:
Bankruptcy laws
Bankruptcy reorganization
Enforcement
Federal court decisions
Federal courts
First Amendment-US
Injunctions
Jewish law
Jewish people
Religion
Religious law
Religious orthodoxy
Restraining orders
Secularism
State court decisions
Torah
Uniform Commercial Code-US
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Summary:The US Bankruptcy Court for the Southern District of New York recently held that a Jewish religious court's anti-suit injunction against a chapter 11 debtor's principals violated the automatic stay and was without effect. The court's decision, which appears to be only the second available written opinion of its kind, is a strong signal to religious parties that relying on the First Amendment will not protect them from being held in contempt for automatic stay violations when their actions clearly have a coercive effect on a debtor. The bankruptcy court deftly navigated the competing priorities of the Bankruptcy Code and Jewish law, giving respect to both. On the one hand, the court determined that there was a stay violation and took the necessary steps to return to the status quo and put a stop to the conduct that the court found coercive. On the other hand, once the parties made a proper request, the bankruptcy court allowed them to go to beis din, a Jewish religious court, arbitration.
ISSN:1931-7522