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<blockquote data-quote="Snarf Zagyg" data-source="post: 9044173" data-attributes="member: 7023840"><p>So a few brief comments, and I am going to make these generally.</p><p></p><p>First, every litigator hates it (HATES IT) when they see the Notice of Bankruptcy. In almost every circumstance, there is an exception. Here? Not really. This is the "Go to jail, do not pass go, do not collect $200" of litigation. It is an automatic stay. Everything stops. Period.* </p><p></p><p>However, this does not apply to other parties (other defendants). It only applies to the party declaring bankruptcy. However however (ahem!), if other parties are indispensable parties, the Court <em>may </em>issue a stay or grant an injunction during the pendency of the action since it can't effectuate relief without the other party. </p><p></p><p></p><p>*What if it's a sham bankruptcy solely to avoid the litigation? Still stayed. You have to seek relief in the bankruptcy court. Otherwise, every time there was a real bankruptcy during litigation, there would be further litigation attacking the validity of the filing, which would kind of go against the whole purpose of the Bankruptcy code.</p></blockquote><p></p>
[QUOTE="Snarf Zagyg, post: 9044173, member: 7023840"] So a few brief comments, and I am going to make these generally. First, every litigator hates it (HATES IT) when they see the Notice of Bankruptcy. In almost every circumstance, there is an exception. Here? Not really. This is the "Go to jail, do not pass go, do not collect $200" of litigation. It is an automatic stay. Everything stops. Period.* However, this does not apply to other parties (other defendants). It only applies to the party declaring bankruptcy. However however (ahem!), if other parties are indispensable parties, the Court [I]may [/I]issue a stay or grant an injunction during the pendency of the action since it can't effectuate relief without the other party. *What if it's a sham bankruptcy solely to avoid the litigation? Still stayed. You have to seek relief in the bankruptcy court. Otherwise, every time there was a real bankruptcy during litigation, there would be further litigation attacking the validity of the filing, which would kind of go against the whole purpose of the Bankruptcy code. [/QUOTE]
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