Dingley v. Yellow Logistics, LLC

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Debtor was the former owner and operator of two towing companies, Yellow Logistics and Yellow Express. In this case, the bankruptcy court sanctioned the companies for violating the automatic stay by pursuing civil contempt proceedings against debtor based on his failure to pay discovery sanctions in a state court action. The court held that under In re Berg, civil contempt proceedings are exempted from the automatic stay under the Bankruptcy Code's government regulatory exemption, when, as here, the contempt proceedings are intended to effectuate the court's public policy interest in deterring litigation misconduct. Therefore, the court concluded that the bankruptcy court erred, and affirmed the decision of the Bankruptcy Appellate Panel (BAP), though on a different basis than that discussed by the BAP. View "Dingley v. Yellow Logistics, LLC" on Justia Law