9th Circ. Ruling Offers Guidance On Automatic Stay Violations

By Keith Owens and Zach Williams (June 22, 2022, 4:29 PM EDT) -- On April 5, the Bankruptcy Appellate Panel for the Ninth Circuit published an opinion in Censo LLC v. Newrez LLC that clarifies the nebulous standard for addressing whether a nonbankruptcy court's entry of a post-petition order on a pending matter violates the automatic stay in the context of litigation involving multiple parties and claims.

The BAP concluded that the post-petition entry of an order on the lender's counterclaims in a quiet title action did not violate the automatic stay because the underlying action was initiated by the debtor rather than the lender and therefore, was defensive in nature.

The BAP's analysis provides...

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