A Cautionary Tale For Proactive Creditors

Law360, New York (March 6, 2014, 2:44 PM EST) -- In certain circumstances, the Bankruptcy Code provides for recovery of fees and costs incurred by creditors that (1) initiate an involuntary petition or (2) undertake to recover assets for the estate in order to encourage and promote meaningful participation by creditors in a Chapter 11 bankruptcy.

However, the code places the burden on the creditor seeking to recover these costs to demonstrate their entitlement under very specific procedural requirements. Failure to take the proper steps in the proper order could disqualify an otherwise entitled creditor from...
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