Automatic Stay

Question 1

What is adequate protection?

Answer 1

Given to creditors to compensate for declines in value from the automatic stay
361: Achieved by periodic cash payments, additional/replacement liens, indubitable equivalent

Question 2

What is adequate protection?

Answer 2

Given to creditors to compensate for declines in value from the automatic stay
361: Achieved by periodic cash payments, additional/replacement liens, indubitable equivalent

Question 3

What are 3 key exceptions from the stay?

Answer 3

362: Exception for perfection of backdating security interests; exception for enforcement of gov regulatory power; exception for repo/swap agreements

Question 4

What are the requirements for an involuntary bankruptcy?

Answer 4

Sec 303 - 3 or more entities hold claims aggregating to at least $16750

Question 5

What doctrines shore up the automatic stay?

Answer 5

Preference law, fraudulent conveyance law, equitable subordination, dividend statutes

Question 6

Do pre and post bankruptcy claims both get stayed?

Answer 6

No - the automatic stay only applies to pre-petition claims

Question 7

When must the court lift the stay?

Answer 7

Lack of adequate protection or

the property is not needed for an effective reorg & debtor has no equity

Question 8

What is the priority of an inadequate adequate protection claim?

Answer 8

Below secured claims and 364c

Above all other admin priority

Question 9

When does the government benefit from its police and regulatory power exception?

Answer 9

When forcing compliance - NOT when seeking a monetary recovery

Question 10

What is the effect of the exemption of government regulation from the automatic stay?

Answer 10

creditors will monitor for regulatory compliance (esp environmental) because they know that in a bankruptcy, they will ultimately end up bearing the costs

Question 11

Is a regulatory mandate a claim in bankruptcy?

Answer 11

No

Question 12

Can a government revoke the license of a bankrupt?

Answer 12

Yes - as long as it does so for a regulatory purpose (protected by 362b) and not simply because of financial insolvency (prohibited by 525). Nextwave

Question 13

Can the government enforce a security interest in the license of the bankrupt?

Answer 13

Yes, but this is not exempted from the stay under 362b and the recovery is then capped at the value of the debt (important in Nextwave)