Adversarial Proceedings in Bankruptcy

Two or More Parties in Contention

At The Butler Firm, a solar energy law firm, we have a team of experienced attorneys who can easily navigate the complex bankruptcy rules to garnish a favorable outcome for our clean energy and clean technology clients in a contested bankruptcy matter.

We are usually conditioned to think of the adversarial system as a means of two or more parties to fight out the details of a legal matter before a competent court. There is, however, a specific procedure that has to be undertaken during the bankruptcy process which can also lay claim to this title. Of course most legal systems employ some element of adversarial style. This style arises when two or more parties spur on the merits of a legal issue.

The court process for bankruptcy is mainly to do with administrative matters rather than the substantial issue which will involve the facts of the case. More often than not the facts of the case will be that someone or a business entity will not be able to meet its debt obligations. As a consequence they will come to an arrangement with their creditors whereby the amount owed can be written off in return for certain sanctions that are levied against the person or entity which is unable to pay its debts.

When we talk of Chapter 7 and Chapter 13 bankruptcy incidences, there is a requirement to submit certain documents to the court so that they can ascertain the merits of the petition for bankruptcy. Some of these documents are raised just to clarify certain legal statements that may have been made by the parties. At other times the judge will be seeking to identify the assets of the petitioner so that they can at least make a contribution towards the debt.

Judicial Consensus as Opposed to Adversarial Proceedings

There will be some more intricate judicial involvement in chapter 11 cases of bankruptcy but as a general rule most of the procedures will be initiated and completed by a simple submission from the parties concerned. The lawyers are at the forefront of this system although the strict meaning of adversarial may not necessarily make sense.

If one is involved in a bankruptcy dispute under the adversarial system of legal precedent, they may request that they can file a motion to bring about a certain outcome of the hearing. The system, however, is not bound by these motions and the other party can contest them. If the judge is pleased with the motion, then it will be adopted and will form part of the ruling which will govern the case management.

In an ideal situation both parties would be working towards the same goal which is to dispose of the case at the earliest opportunity. This does not lend itself to the very strict understanding that is attached to an adversarial situation. One of the parties, however, may quite rightly question some of the rulings or procedures that have been applied to the case thus leading to a situation of some level of contention. The judge will then have to undertake what is in effect a fact finding mission in order to assess the merits of the contention. At the end of this process a ruling will be made which is subject to the normal appeals process.

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