Involuntary Proceeding Suspended to Permit Disposition of State Court Litigation

Chairman and CEO Andy Kassner and Corporate Restructuring associate Joe Argentina authored an article in The Legal Intelligencer titled “Involuntary Proceeding Suspended to Permit Disposition of State Court Litigation.” The article outlines the details of In re EB Holdings II, a case in which the U.S. Bankruptcy Court for the District of Nevada reviewed the debtor’s request either to dismiss an involuntary petition filed against it, or to suspend the matter until pending related state court actions were adjudicated.

In this case, the bankruptcy court found it would be beneficial to all stakeholders if the state court actions were adjudicated. Adjudication of the state court claims would allow the court to determine whether there was a bona fide dispute and whether the debtor could pay its debts when they were due, rather than hold further proceedings in the bankruptcy court on the petition and adjudicate the same state law issues in the bankruptcy forum. Therefore, the court concluded that suspension of the involuntary case was appropriate.

Read “Involuntary Proceeding Suspended to Permit Disposition of State Court Litigation.”