The Seventh Circuit Ups the Ante in an Instructive Decision Affirming the Power of Bankruptcy Courts to Stay Litigation

The successful resolution of disputes arising in bankruptcy proceedings is one of the Bankruptcy Code’s central objectives. To that end, Section 105(a) of the Bankruptcy Code provides that a bankruptcy court “may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [title 11].” But does this grant of authority allow a bankruptcy court to stay a lawsuit brought by a non-debtor plaintiff against a non-debtor defendant outside of the bankruptcy case?

This Client Alert was republished by Pratt's Journal of Bankruptcy Law in its April/May 2016 issue. Click here to read the republished article. 

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