The Far-Reaching Implications Of High Court Ch. 13 Ruling

Law360 (Jan. 22, 2021, 3:50 p.m. EST) – In City of Chicago v. Fulton,[1] a United States Supreme Court unanimously[2] decided that the automatic stay imposed by Article 362 of the Bankruptcy Code does not oblige entities legally in possession of the debtor’s assets to immediately return those assets upon opening bankruptcy proceedings.[3]

Specifically, the court ruled that the mere withholding of immovable property after filing a bankruptcy petition does not violate the automatic stay of acts aimed at obtaining possession or exercising control of immovable property under section 362 (a) (3).

Instead, the court ruled that the natural reading of the suspension imposed by Section 362 (a) (3) prohibits only affirmative …

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