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Collier Bankruptcy Manual, Fourth Edition
Copyright 2017, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

1-10 Collier Bankruptcy Manual 10.syn


Compliance with Nonbankruptcy Law by Trustee or Debtor in Possession


Alan N. Resnick;and Henry J. Sommer

Chapter Summary


Chapter 10 of Collier Bankruptcy Manual (Matthew Bender) examines the proposition stated in 28 U.S.C. § 959(a), that a nondebtor party is not required to get the bankruptcy court's permission before filing a lawsuit against a Chapter 11 debtor in possession or a Chapter 11 operating trustee as long as the litigation is based on actions by the trustee or debtor in operating the debtor's business in connection with the debtor's property. The chapter provides in-depth review of case law that has developed around § 959(a).

The chapter examines 28 U.S.C. § 959(b), which requires a debtor in possession or a Chapter 11 trustee to follow all applicable state laws regulating the "carrying on" of a business. The chapter reviews considerable case law under this section in a variety of regulatory areas, including: health care, residential housing, going out-of-business sales, corporate governance, and environmental law. Further, the chapter thoroughly discusses the relationship between enforcement of compliance with state law and relief from the automatic stay.

Chapter 10 concludes by discussing the obligation of debtors in possession or Chapter 11 trustees to file tax returns and pay the postpetition taxes assessed against the debtor's business as it works its way through the Chapter 11 process.

Collier Bankruptcy Manual (Matthew Bender) provides authoritative coverage of bankruptcy law in a time-saving compact guide. It is based on the most well-known and widely used bankruptcy treatise, Collier on Bankruptcy, and is organized by Bankruptcy Code sections for easy access. It provides up-to-date analysis on the Bankruptcy Code, Rules, case law, and related non-bankruptcy law.


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See Ch. 1 for a review of the changes made to business bankruptcies by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"). For a thorough discussion of the duties and powers of a Chapter 11 operating trustee, see Ch. 11. See Ch. 3 for a review of the role and capacity of a trustee as it relates to 28 U.S.C. § 959(b).


See The Collier Bankruptcy Practice Guide (Matthew Bender) for an excellent practice-oriented discussion of Chapter 11 trustees' duties.

See Collier on Bankruptcy Taxation (Matthew Bender) for an examination of the trustee's duties regarding tax issues during the pendency of a Chapter 11 case.
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