BANKRUPTCY CORNER
BANKRUPTCY CORNER
Recent Eleventh Circuit Bankruptcy Opinions
JASON S. RIGOLI
Benshot LLC v. 2 Monkey Trading LLC( In re 2 Monkey Trading LLC), 2025 U. S. App. LEXIS 16936, 142 F. 4th 1323( 11th Cir. July 9, 2025) – a corporate debtor can have nondischargeable debts in a nonconsensual, subchapter V bankruptcy case.
On July 9, 2025, the Eleventh Circuit issued an opinion siding with its sister Fifth and Fourth Circuits, holding that a corporate debtor could have nondischargeable debt in a subchapter V bankruptcy in which a non-consensual plan is confirmed. Benshot LLC v. 2 Monkey Trading LLC( In re 2 Monkey Trading LLC), 2025 U. S. App. LEXIS 16936, 142 F. 4th 1323( 11th Cir. July 9, 2025)( Judge Luck dissenting).
The Eleventh Circuit based its decision on several key interpretive principles. Fist, stating that § 1192 refers to“ the debtor,” which the Bankruptcy Code defines to include both individual and corporate debtors. 2025 U. S. App. LEXIS 16936 at * 9( citing In re GFS Indus., 99 F. 4th 223, 228( 5th Cir. 2024); In re Cleary, 36 F. 4th 509, 514-15( 4th Cir. 2022); 11 U. S. C. §§ 101( 9)( A),( 41), 1182, 1191( b), and 1192)). Second, the use of the phrase“ of the kind specified in section 523( a)” in § 1192( 2) refers to the types of debt listed in § 523( a), not to the type of debtor. 2025 U. S. App. LEXIS 16936 at * 10-12( citations omitted). The Eleventh Circuit used context to support its decision, stating when Congress intended to limit provisions to specific types of debtors, it did so expressly. Id. at * 11-13( referring to 11 U. S. C. § 1141( d)( 2) and( d)( 6)).
Accordingly, for now, in the Eleventh Circuit, a corporate debtor can have nondischargeable debts in a non-consensual, subchapter V bankruptcy case.
Patel v. Patel( In re Patel), 142 F. 4th 1313( 11th Cir. July 8, 2025) – Annulment of
Automatic Stay under 11 U. S. C. § 362( d)( 1) survived Acevedo
In another opinion issued on July 8, 2025, the Eleventh Circuit held that an annulment of the automatic stay under 11 U. S. C. § 362( d)( 1) was not itself nullified by the Supreme Court’ s decision in Roman Catholic Archdiocese of San Juan, Puerto Rico v. Acevedo Feliciano, 589 U. S. 57( 2020). Patel v. Patel( In re Patel), 23-12847, 2025 U. S. App. LEXIS 16746, 142 F. 4th 1313( 11th Cir. July 8, 2025).
Section 362 provides for an automatic stay of proceedings against the debtor and property of the debtor or the estate, with some exceptions. See 11 U. S. C. § 362( a). Subsection( d)( 1) specifically authorizes courts to“ grant relief from the stay provided under subsection( a) of this section, such as by terminating, annulling, modifying, or conditioning such stay— for cause …” 11 U. S. C. § 362( d)( 1).
In Acevedo, the Supreme Court was faced with a district court’ s attempt to retroactively validate orders entered by a Puerto Rico trial court after removal but before remand by entering a nunc pro tunc order providing that the remand predated the entry of the trial court’ s orders. 2025 U. S. App. LEXIS 16746 at * 12- 13. The Eleventh Circuit limited the holding in Acevedo to nunc pro tunc orders and jurisdiction, id., distinguishing the two jurisdictional statutes 28 U. S. C. § 1446( removal statute), which divests state courts of“ all jurisdiction over the case” versus 28 U. S. C. § 1334( b) which grants jurisdiction to district courts( and bankruptcy courts by referral) over civil proceedings related to bankruptcy cases. Therefore, § 362( d)( 1) did not retroactively grant jurisdiction where it had not existed, § 362( d)( 1) annulment allows the party to exercise control over an asset over which the bankruptcy court has
PBCBA BAR BULLETIN 10
jurisdiction. Id. at * 16-17.
Accordingly, annulment of the automatic stay remains a viable option for creditors in the Eleventh Circuit.
This article was submitted by Jason S. Rigoli, Esq., Furr and Cohen, P. A., 2255 Glades Road, Suite 419A, Boca Raton, FL 33431, jrigoli @ furrcohen. com
LEADING PRACTICE MANAGEMENT SOFTWARE 10 % Discount for Bar Members
You can access your firm from anywhere— at any time— with Clio’ s mobile app. Bring your matters, documents, notes, and calendar with you wherever you go, all on your mobile device. And, take 10 % off all Clio products with your exclusive PBCBA member discount.
Visit www. clio. com / pbcbar to learn more and use promo code PBCBAR to claim your discount.