The Chameleon Court

February 15, 2013

If you’re in bankruptcy, you’re probably going to spend a little time in a bankruptcy court. It may be worth knowing that bankruptcy courts play by a different set of rules than most other federal or state courts. The Bankruptcy Code empowers the presiding judge to act in a number of different ways, playing a variety of different roles.

 

A bankruptcy judge is a referee. Historically, bankruptcy judges weren’t judges. They were called “referees.” Today, the nomenclature has been standardized, but the fundamental concept remains. In many situations in bankruptcy litigation, the judge lets the parties dispute. He or she just makes sure that the punches stay above the belt.

 

A bankruptcy judge is a governor. As the presiding officer in the court, the bankruptcy judge has the authority to police the forum. The judge is empowered to punish unruly behavior, outbursts, or behavior suggesting disrespect or contempt, including throwing the parties out of the courthouse.

 

A bankruptcy is a parent. In the eyes of a child, a parent sometimes does things that seem unjust to one child, even though it’s the right thing to do for another child. And the justification can feel as thin as, “Because I said so.” Bankruptcy judges have a similar power. From the bench, a bankruptcy judge can limit some of the rights and remedies of a litigant, including nullifying contracts that previously bound the parties. And, sometimes, it can feel like the justification is as thin as “Because I said so.”

 

A bankruptcy judge is an auctioneer. In many bankruptcies, the best solution is for the debtor to sell a portion of his, her, or its assets. When this is the case, it’s essential that the sale be orderly. An orderly sale maximizes the value for the creditors and the debtor. It also lends legitimacy to the proceedings. Given these needs, a bankruptcy judge will often fill the role of auctioneer, presiding over the sale and ensuring a proper process.

 

What roles should you expect the bankruptcy court play in your proceedings? It’s an important question to ask – and to answer. To find out, talk to the professionals and dedicated bankruptcy attorneys at Fears Nachawati today. We’re ready to help you.

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