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The Bankruptcy Eligibility Of Quasi-Government Entities

Law360 (February 5, 2018, 12:10 PM EST) -- In order to properly commence a bankruptcy case, the debtor bears the burden of establishing that it meets the applicable bankruptcy eligibility requirements. Generally, any “person” is permitted to pursue relief under Chapter 11 of the U.S. Bankruptcy Code. However, the definition of “person” specifically excludes any “governmental unit” for purposes of bankruptcy eligibility. In bankruptcy cases where a not-for-profit corporation is closely related to or controlled by a governmental unit, a creditor may challenge the not-for-profit corporation’s eligibility, arguing that the not-for-profit corporation is, in...
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