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Bankruptcy Court Awards Damages For Violation of Stay Through Rabbinical Court Proceedings

By Howard M. Friedman

In In re Pachman, (SDNY Bkrptcy., April 14, 2010), a federal bankruptcy court awarded damages of $15,311, representing the debtor's attorneys' fees and costs, against a creditor who had been found to have violated the Bankruptcy Code's automatic stay on enforcement of claims. (11 USC Sec. 362.) The creditor continued proceedings against the debtor in a Rabbinical court after the bankruptcy petition had been filed and the stay took effect. The Rabbinical court issued a siruv, an order that would subject the debtor and his family to ostracism in the Orthodox Jewish community. While the court awarded actual damages, it found insufficient bad faith to justify an additional award of punitive damages. [Thanks to Joseph Landau for the lead.]

Full post as published by Religion Clause on April 19, 2010 (boomark / email).