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"The estate and the automatic stay" [2019] ELECD 2082; in Lubben, Stephen (ed), "American Business Bankruptcy" (Edward Elgar Publishing, 2019) 37

Book Title: American Business Bankruptcy

Editor(s): Lubben, Stephen

Publisher: Edward Elgar Publishing

Section: Chapter 3

Section Title: The estate and the automatic stay

Number of pages: 8

Abstract/Description:

The commencement of a bankruptcy case creates an estate, comprised of all of the debtor’s property, wherever located. The sweep is intentionally quite broad, and in theory covers as far as the bankruptcy court’s jurisdiction can practically reach. The estate itself is protected by an “automatic stay.” This is a statutory injunction against creditor attempts to collect from the estate, or the debtor. The automatic stay applies to all actions, even if the creditor has no notice that a bankruptcy case has commenced. Creditors lose their individual collection rights against the company, and they are obliged to interact with an estate operating on behalf of all the creditors. A creditor can ask the bankruptcy court to lift the automatic stay, and certain actions (e.g., criminal prosecutions) are expressly outside the scope of the stay.