Abstention in ABC cases
September 8, 2020
The latest on ABC case administration issues written by Geoff Berman, the author of the American Bankruptcy Institute’s book titled “General Assignments for the Benefit of Creditors, the ABCs of ABCs. As the excerpt notes, the article looks at how bankruptcy courts look at abstention motions to involuntary petitions in ABC matters. This is especially timely in light of the increasing use of ABCs as businesses fail to survive the economic downturn related to COVID-19 and its impact on businesses. The Korean Radio Broadcasting Memorandum Decision lays out a framework for counsel to carefully note for what a court should look to in its decision about abstention motions.
The article looks at the application of the abstention doctrine in involuntary cases where there is an underlying assignment for the benefit of creditors and the recent (March 2020) in In re Korean Radio Broadcasting Inc. decision. . . “There are circumstances … [where] it would be appropriate for the [bankruptcy] court to decline jurisdiction…. The less expensive out-of-court workout [might] better serve the interests of creditors.”
Click here to read the article.