Adversary Proceedings: Adversary Proceedings are governed by the Federal Rules of Bankruptcy and Federal Procedural rules. If you are a party to a bankruptcy adversary proceeding in bankruptcy court it is imperative that you are represented by a bankruptcy law firm that is abreast of the complex procedural and legal aspects of a bankruptcy proceeding.
Here are some important features of a Chapter 11 adversary proceeding process.
An Adversary Proceeding in a bankruptcy court is similar in form and fashion and to a lawsuit in a civil court. It takes place when one or more parties files a claim against another in bankruptcy court seeking a particular relief. Usually under a Chapter 11 the business debtor also assumes the identity of a Debtor on possession”. The debtor in possession maintains control of the business subject to the court authority during the reorganization time period. The Debtor in possession must file a statement of disclosure of all the assets and debts of the business as well as a plan to pay back the debts owed. The Plan need to be approved by creditor whose contractual rights have been altered by the plan Adversary proceeding under federal bankruptcy law may be instituted by either the debtor or the creditor while the business is under the auspices of a Bankruptcy Court reorganization plan. A debtor in possession may used an adversary proceeding to recover property. Creditor may be able to file adversary proceeding against interests in the business (ie officers, or directors or board members). Unsecure Creditors rights un Adversary Proceedings: Creditors have the rights regardless of what chapter bankruptcy is filed to take part in an adversary proceeding. A creditor in an adversary proceeding has the burden to prove that the debt owed by the debtor in possession is secured and thus is non dischargeable. Here, it is vital that one understand the complexities rights and obligations of secured and unsecured debts. It is advised that you consult an bankruptcy law firm if you are a party to an adversay proceeding. When an adversary proceeding is initiated, the clerk’s office created an separate docket to record all activity in the adversary proceeding. Each adversary proceeding will have its own number. After filing the plaintiff has a certain deadline to file and serve a written response. Adversary proceedings can be filed after a Bankruptcy case has been filed.