Appellate Law

CA1: due process issues in Bankruptcy reorganizations

By S. COTUS

Arch Wireless, Inc. v. Nationwide Paging, No. 07-1611 (7/23/08).  Arch went into Chapter 11.  It received a discharge.  Nationwide is a debtor seeking to enforce some clams against it.  Nationwide claims it wasn?t given adequate notice.  Arch says that Nationwide wasn?t a ?known? creditor, and besides it knew of the bankruptcy proceedings, anyway.

The Bankruptcy Court said that Arch knew that Nationwide was about to sue them, as there was an ongoing dispute complete with specific written claims.  Nevertheless, the actual accounts of both companies didn?t reflect amounts owed in the way that Nationwide claims they are.

The First notes that the Bankruptcy Code doesn?t really provide the remedy for failing to inform a creditor of an impending reorganization.  So, the First looks to constitutional due process principles.  Applying New York v. New York, N.H. & H. R. Co., 344 U. S. 293 (1953), the First says that Nationwide should have been included on the list.

Full post as published by Appellate Law and Practice on July 24, 2008 (boomark / email).