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Second Circuit: Bankruptcy Courts Have Inherent Authority to Impose Civil Contempt Sanctions
Because bankruptcy courts were created by Congress rather than under Article III of the U.S. Constitution, there is a disagreement over whether bankruptcy courts, like other federal courts, have "inherent authority" to impose sanctions for civil contempt on parties that refuse to comply with their orders. The U.S. Court of Appeals for the Second Circuit revisited this debate in In re Markus, 78 F.4th 554 (2nd Cir. 2023). The court of appeals affirmed a bankruptcy court decision imposing sanctions on a chapter 15 debtor's lawyer who repeatedly flouted the court's discovery orders and awarding attorneys' fees to the debtor's foreign representative incurred in bringing a motion for sanctions.
In so ruling, the Second Circuit reaffirmed its earlier decisions concluding that a bankruptcy court has the inherent authority to impose civil sanctions for contempt. However, the Second Circuit expanded the scope of that inherent authority to include punitive civil contempt sanctions in an amount greater than it had approved in its previous rulings. According to the Second Circuit, "we hold that a bankruptcy court's inherent sanctioning authority includes the power to impose civil contempt sanctions in non-nominal amounts to compensate an injured party and coerce future compliance with the court's orders."
Contempt Power of Federal Courts
U.S. federal courts have "contempt power" to ensure that litigants comply with laws and respect the courts. When parties refuse to comply with court orders or disrespect the judicial process, courts have long used punishment (and the threat of punishment) in the form of contempt to compel compliance.
The source of a federal court's power to punish for contempt is uncertain. Some courts and commentators have found the power to be implied from the "judicial Power of the United States," which Section 1 of Article III of the U.S. Constitution vests in the U.S. Supreme Court and lower courts created by Congress. See Ex parte Robinson, 86 U.S. (19 Wall.) 505, 510 (1874) ("The power to punish for contempts is inherent in all courts…."); Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 450 (1911) ("[T]he power of courts to punish for contempts is a necessary and integral part of the independence of the judiciary, and is absolutely essential to the performance of the duties imposed on them by law…. If a party can make himself a judge of the validity of orders which have been issued, and by his own act of disobedience set them aside, then are the courts impotent, and what the Constitution now fittingly calls the 'judicial power of the United States' would be a mere mockery."); Robert J. Pushaw, Jr., The Inherent Powers of Federal Courts and the Structural Constitution, 86 Iowa L. Rev. 735, 741–42 (2001) (stating that the power to sanction is an "implied indispensable power" of courts under Article III).
Others have expressed the view that contempt power was not intended to be encompassed in the "judicial Power" vested in federal courts by the Constitution. See, e.g., Green v. United States, 356 U.S. 165, 193 (1958) (Black, J., dissenting) (characterizing summary contempt as "an anomaly in the law"); Ronald Goldfarb, The History of the Contempt Power, 1961 Wash. U. L.Q. 1, 2 (arguing that contempt power appears to be "violative of basic philosophical approaches to the relations between government bodies and people").
Contempt can be either criminal or civil. Criminal contempt is designed to vindicate the authority of the court by punishing a litigant who has defied the court, whereas civil contempt is designed to preserve and enforce compliance with court orders and to compensate injured parties for losses sustained from noncompliance. See Downey v. Clauder, 30 F.3d 681, 685 (6th Cir. 1994).
Addressing "contempts," 18 U.S.C. § 401 of the U.S. Code (Title Eighteen governs "Crimes and Criminal Procedure") provides as follows:
A court of the United States shall have power to punish by fine or imprisonment, or both, at its discretion, such contempt of its authority, and none other, as—
(1) Misbehavior of any person in its presence or so near thereto as to obstruct the administration of justice;
(2) Misbehavior of any of its officers in their official transactions;
(3) Disobedience or resistance to its lawful writ, process, order, rule, decree, or command.
18 U.S.C. § 401. In addition, Rule 42 of the Federal Rules of Criminal Procedure provides that "[a]ny person who commits criminal contempt may be punished for that contempt after prosecution on notice." Fed. R. Crim. P. 42.
With respect to civil contempt, Rule 70 of the Federal Rules of Civil Procedure states that if a party refuses "to perform any … specific act [directed by the court] … within the time specified," the court "may also hold the disobedient party in contempt." Fed. R. Civ. P. 70.
In addition, if a party fails to comply with a subpoena issued in connection with discovery, Rule 45 of the Federal Rules of Civil Procedure provides that "[t]he court for the district where compliance is required—and also, after a motion is transferred, the issuing court—may hold in contempt a person who, having been served, fails without adequate excuse to obey the subpoena or an order related to it. Fed. R. Civ. P. 45(g).
Aside from constitutional, statutory, or regulatory authority, federal courts also have "inherent authority" to enforce compliance with their directives by means of civil contempt. See Int'l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 831 (1994); Fuery v. City of Chicago, 900 F.3d 450, 463 (7th Cir. 2018); EEOC v. Guardian Pools, Inc., 828 F.2d 1507, 1516 (11th Cir. 1987).
Until the U.S. Supreme Court's ruling in Taggart v. Lorenzen, 139 S. Ct. 1795 (2019) (discussed below), it was generally recognized that a federal court's inherent power to hold a litigant in civil contempt could be exercised only if: (i) the order with which the litigant allegedly failed to comply is clear and unambiguous; (ii) proof of noncompliance is clear and convincing; and (iii) the litigant fails to attempt compliance diligently and in a reasonable way. See King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995); Monsanto Co. v. Haskel Trading, Inc., 13 F. Supp.2d 349, 363 (E.D.N.Y. 1998). "Clear and unambiguous" means that the court's order or directive must enable the litigant "to ascertain from the four corners of the order precisely what acts are forbidden." Monsanto, 13 F. Supp. 2d at 363. "In the context of civil contempt, the clear and convincing standard requires a quantum of proof adequate to demonstrate 'reasonable certainty' that a violation occurred." Levin v. Tiber Holding Corp., 277 F.3d 243, 250 (2d Cir. 2002) (citation omitted).
Do Bankruptcy Courts Have Contempt Power?
Even though bankruptcy courts were created by Congress under Article I of the Constitution (and are now "units" of federal district courts), rather than as part of the judiciary branch under Article III, most courts have determined that bankruptcy courts, like other federal courts, have inherent civil contempt power. See In re Sanchez, 941 F.3d 625, 627–28 (2d Cir. 2019) ("As our sister circuits have explained, inherent sanctioning powers are not contingent on Article III, but rather are, as their name suggests, inherent in the nature of federal courts as institutions charged with judicial functions. We therefore hold that bankruptcy courts, like Article III courts, possess inherent sanctioning powers."); Alderwoods Grp., Inc. v. Garcia, 682 F.3d 958, 966 n.18 (11th Cir. 2012); see generally Collier on Bankruptcy ("Collier") ¶ 105.02[1][a] (16th ed. 2023) (stating that "[t]he majority of cases conclude that all courts, whether created pursuant to Article I or Article III of the Constitution, have inherent civil contempt power to enforce compliance with their lawful judicial orders, and no specific statute is required to invest a court with civil contempt power.").
Many courts have reasoned that bankruptcy courts have civil contempt power flowing not only from "the inherent power of a court to enforce compliance with its lawful orders," but also from section 105(a) of the Bankruptcy Code, which provides that:
[A bankruptcy] court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy Code]…. No provision of [the Bankruptcy Code] providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent any abuse of process.
11 U.S.C. § 105(a) (emphasis added). See In re Walker, 257 B.R. 493, 496 (Bankr. N.D. Ohio 2001) (citations omitted); accord In re Roman Cath. Church of Archdiocese of New Orleans, 2023 WL 4105655, *16 (E.D. La. June 21, 2023); In re City of Detroit, 653 B.R. 874, 892 (Bankr. E.D. Mich. 2023); In re Kwok, 653 B.R. 480, 489 (Bankr. D. Conn. 2023); In re Brown, 2023 WL 4496925, *4 (Bankr. N.D. Ga. July 12, 2023).
The second sentence of section 105(a) (italicized above) was added in 1986 as part of the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act (Pub. L. No. 99-554). Some courts have determined that the addition indicates that Congress meant section 105 to serve as the statutory basis for a bankruptcy court's civil contempt power. See, e.g., Stephen W. Grosse, P.C., 84 B.R. 377, 386 (Bankr. E.D. Pa. 1988); In re Miller, 81 B.R. 669, 676-78 (Bankr. M.D. Fla. 1988); In re Haddad, 68 B.R. 944, 948 (Bankr. D. Mass. 1987).
A bankruptcy court's inherent contempt powers are also indicated by Rule 9020 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), which provides that "Rule 9014 [governing "contested matters" in bankruptcy] governs a motion for an order of contempt made by the United States trustee or a party in interest." In addition, Rule 70 of the Federal Rules of Civil Procedure, which, as noted previously, authorizes a federal court to "hold [a] disobedient party in contempt," applies in bankruptcy "adversary proceedings" pursuant to Bankruptcy Rule 7070.
In Taggart, the U.S. Supreme Court held that, based on traditional standards in equity practice, a creditor may be held in civil contempt for violation of the bankruptcy discharge injunction, but only "if there is no fair ground of doubt as to whether the order barred the creditor's conduct." Taggart, 139 S. Ct. at 1799. According to the Court in Taggart, "civil contempt may be appropriate if there is no objectively reasonable basis for concluding that the creditor's conduct might be lawful." Id. Stated differently, there is no fair ground of doubt when the creditor violates a discharge injunction "based on an objectively unreasonable understanding of the discharge order or the statutes that govern its scope." Id. at 1802. A "creditor's good faith belief" that the discharge injunction does not apply to an act in violation of the discharge injunction does not by itself preclude a civil contempt sanction. Id. However, a creditor may not be held in civil contempt merely because "the creditor was aware of the discharge order and intended the actions that violated the order." Id. at 1803.
According to the bankruptcy court in In re City of Detroit, Michigan, 614 B.R. 255 (Bankr. E.D. Mich. 2020), after Taggart, the elements that must be proven for a court to find a party in civil contempt are that: (i) the party violated a definite and specific court order obligating it to perform or to refrain from performing a particular act; (ii) the party acted with knowledge of the court order; and (iii) there is no fair ground of doubt as to whether the order precluded the party's conduct (or stated differently, there was no objectively reasonable basis to conclude that the party's conduct might be lawful). Id. at 265–66.
Courts disagree as to whether a bankruptcy court's contempt powers extend to criminal contempt. See Collier at ¶ 9020.01[2] (citing cases and noting that "[t]here may be a split developing among the circuits as to whether a bankruptcy court can punish criminal contempt."); id. at ¶ 105.02[1][a] (stating that "[s]ome courts have held that this inherent power extends to all contempts, be they civil or criminal, … while others hold that it applies only to civil contempt and some forms of criminal contempt (such as contempt committed in the presence of the court.").
The Bankruptcy Code, the Bankruptcy Rules, and the Federal Rules of Civil Procedure also give bankruptcy courts the power to sanction disobedient litigants (and their lawyers). For example, section 363(k) of the Bankruptcy Code provides that, with certain exceptions, an individual injured by any willful violation of the automatic stay "shall recover actual damages, including costs and attorneys' fees, and, in an appropriate case, may recover punitive damages." In addition, if the court dismisses an involuntary bankruptcy petition, it may grant judgment against the petitioning creditors for costs and attorneys' fees, or even punitive damages if a creditor files an involuntary case in bad faith. See 11 U.S.C. § 303(i).
Bankruptcy Rule 3002.1(i) authorizes a bankruptcy court to award reasonable expenses and attorneys' fees caused by the failure of home mortgagees to provide certain required notices to the debtor mortgagor.
Under Bankruptcy Rule 9011, an attorney or unrepresented litigant who signs any court pleading or other document certifies that, "to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances," the document does not contain, among other things, false, misleading, frivolous, or legally unsupported allegations. Fed. R. Bankr. P. 9011(a) and (b).
Bankruptcy Rule 9011(c) provides that "[i]f, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation." Pursuant to Bankruptcy Rule 9011(c)(2), "[a] sanction imposed for violation of this rule shall be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated." Sanctions may include "directives of a nonmonetary nature, an order to pay a penalty into court, or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorneys' fees and other expenses incurred as a direct result of the violation." Fed. R. Bankr. P. 9011(c)(2).
Sanctions are not available under Rule 9011 in connection with "disclosures and discovery requests, responses, objections, and motions that are subject to the provisions of [Bankruptcy] Rules 7026 through 7037." Fed. R. Bankr. P. 9011(d). The discovery rules set forth in Bankruptcy Rules 7026 through 7037 authorize the bankruptcy court in an adversary proceeding (and, unless the court orders otherwise, contested matters in a bankruptcy case) to impose sanctions on a litigant or its attorney in connection with discovery abuses under circumstances similar to those described in Bankruptcy Rule 9011. See Fed. R. Civ. P. 7026(g)(3); Fed. R. Bankr. P. 9014(c).
In addition, Rule 37 of the Federal Rules of Civil Procedure, which is made applicable to bankruptcy adversary proceedings and contested matters by Bankruptcy Rules 7037 and 9014(c), provides that the bankruptcy court may impose sanctions for a litigant's failure to comply with discovery requests or court discovery orders, including an award of fees and expenses or orders compromising the noncompliant litigant's ability to effectively prosecute the litigation (e.g., dismissal of the action or the entry of a default judgment in the action), or "treating as contempt of court the failure to obey any [discovery] order except an order to submit to a physical or mental examination." Fed. R. Civ. P. 37(b)(2). Rule 45(g) of the Federal Rules of Civil Procedure (authorizing a federal court to hold a party refusing to comply with a subpoena in contempt) also applies in bankruptcy cases pursuant to Bankruptcy Rule 9016.
Markus
Larisa Ivanova Markus (the "debtor") is a Russian citizen who founded Vneshprombank, Ltd. ("VB"), one of Russia's largest banks. In March 2016, a Russian court commenced a bankruptcy proceeding against VB. Shortly afterward, the Russian court granted a petition filed by one of the debtor's creditors to commence a bankruptcy proceeding against her personally. The court appointed Yuri Vladimirovich Rozhkov ("Rozhkov") to preside over the liquidation of the debtor's assets and to pursue litigation against any entities that contributed to the debtor's bankruptcy. In 2017, the debtor was imprisoned in Russia after being convicted for embezzling $2 billion from VB.
In January 2019, Rozhkov, as the debtor's "foreign representative," filed a petition in the U.S. Bankruptcy Court for the Southern District of New York seeking recognition of the debtor's Russian bankruptcy proceeding under chapter 15 of the Bankruptcy Code. According to the petition, Rozhkov sought recognition of debtor's Russian bankruptcy for the purpose of obtaining discovery concerning the debtor's U.S. assets (including at least 10 companies and apartments valued at more than $10 million). The U.S. bankruptcy court granted the chapter 15 petition in April 2019.
Heated discovery disputes ensued almost immediately between Rozhkov and the debtor's attorney, Victor A. Worms. Among other things, despite repeated discovery requests, Worms made no effort to obtain responsive documents, arguing that he did not need to comply because the U.S. bankruptcy court improperly recognized the debtor's Russian bankruptcy (Worms filed a motion to vacate the recognition order in June 2019).
The U.S. bankruptcy court overruled Worms's objections, and directed him to comply immediately with Rozhkov's discovery requests. The court also informed Worms that failure to comply could result in the imposition of sanctions. After Worms failed to produce any discovery before the court-imposed deadline, he argued in a written response to a subpoena that the requested discovery "exceed[ed] the limited scope of discovery provided for under Chapter 15." Worms also stated that, because the debtor was in prison, she had no documents responsive to the discovery requests in her possession, and neither he nor his client had any duty to obtain and produce responsive documents in the possession of the debtor's agents because such documents were not in the United States.
In September, 2019, Rozhkov filed a motion for sanctions against Worms and the debtor under Rules 37 and 45(g) of the Federal Rules of Civil Procedure (as made applicable in bankruptcy cases by Bankruptcy Rules 7037 and 9016). In seeking a civil contempt sanction against Worms in the amount of $1,000 per day until compliance, Rozhkov submitted evidence of the identities and contact information of more than 30 known agents of Worms, 14 of whom were in the United States.
After a hearing during which the U.S. bankruptcy court again warned Worms that he would be sanctioned for noncompliance, the court found that Worms's violations of the court's discovery orders were knowing, willful, and intentional, and entered an order (the "sanctions order") imposing the requested monetary sanctions (amounting to $34,000 for the days since the discovery deadline and $1,000 per day until compliance) pursuant to Rule 37 of the Federal Rules of Civil Procedure and "the court's inherent power to hold a party in civil contempt." The U.S. bankruptcy court later awarded $60,000 in attorneys' fees (the "fee order") against Worms personally to compensate Rozhkov for costs incurred in connection with the sanctions motion. The court did not state in the fee order the source of its authority to do so, but referenced its previous opinion granting the sanctions motion.
On appeal of both the sanctions and fee orders, a U.S. district court affirmed the bankruptcy court's imposition of civil contempt sanctions under its "inherent authority," which Worms acknowledged existed, but remanded the case below for determination of the appropriate amount, and vacated the $34,000 in "lump-sum sanctions" as an improper criminal sanction. Because the bankruptcy court had not specified the source of its authority to award attorneys' fees to Rozhkov, the district court vacated the fee order and remanded the case below for clarification.
On remand, the U.S. bankruptcy court held that Worms's contempt was cured as of November 27, 2019, when a U.S.-based agent of the debtor contacted the debtor's other agents to obtain the requested discovery. Based on the 55 days that Worms was in contempt, the court imposed a total of $55,000 in sanctions. The bankruptcy court also held that the fee award was based on its inherent authority, but reduced the amount of the fees to $36,600. However, it also awarded Rozhkov $63,500 in fees incurred in defending the district court appeal.
Worms appealed again to the district court, which affirmed the sanctions award but vacated the award of attorneys' fees for defending the initial district court appeal, reasoning that a bankruptcy court generally does not have the power under its inherent sanctioning power to award fees incurred in connection with an appeal before another court.
Worms appealed the ruling upholding the sanctions order and the fee order to the Second Circuit.
The Second Circuit's Ruling
A three-judge panel of the Second Circuit affirmed the district court's ruling.
Writing for the panel, U.S. Circuit Judge Denny Chin noted that the issue of whether a bankruptcy court has inherent authority to impose "non-nominal civil contempt sanctions" was one of first impression before the Second Circuit.
He explained that, in Sanchez, the Second Circuit, guided by the U.S. Supreme Court's ruling in Chambers v. NASCO, Inc., 501 U.S. 32 (1991), unequivocally held that bankruptcy courts, like other federal courts, have "inherent sanctioning power." Markus, 78 F.4th at 565 (citing Sanchez, 941 F.3d at 628). In addition, Judge Chin noted, in a previous decision, In re Kalikow, 602 F.2d 82 (2d Cir. 2010), the Second Circuit concluded that "[t]he statutory powers given to a bankruptcy court under § 105(a) complement the inherent powers of a federal court to enforce its own orders … [and] [t]hese powers are in addition to whatever inherent contempt powers the court may have." Id. at 96-97 (citation and internal quotation marks omitted).
He further noted that in Law v. Siegel, 571 U.S. 415, 420-21 (2014), the Supreme Court wrote that "[a] bankruptcy court … may also possess 'inherent power … to sanction abusive litigation practices.'"
However, Judge Chin emphasized, its previous rulings, including In re Gravel, 6 F4th 503 (2d. Cir. 2021), where the Second Circuit suggested that the imposition of non-nominal punitive sanctions pursuant to a bankruptcy court's inherent authority requires a finding of bad faith, dealt only with "relatively minor non-compensatory [i.e., punitive] sanctions," unlike the "substantial, compensatory, and coercive sanctions imposed against Worms here." Markus, 78 F.4th at 564-65.
The Second Circuit panel concluded that a bankruptcy court's inherent authority "extends beyond" the power to impose minor punitive sanctions, but "is by no means unlimited" and requires "caution and notice before use." Id. at 565 (internal quotation marks and citation omitted). Judge Chin explained such limitations as follows:
(i) A bankruptcy court's invocation of its inherent authority to sanction abuse "is a last resort for when an express authority is not up to the task," and the court "may not contravene valid statutory directives and prohibitions."
(ii) A bankruptcy court must expressly invoke its inherent sanctioning powers for its order to withstand appellate scrutiny.
(iii) A bankruptcy court must comply with the mandates of due process when deploying its inherent powers.
(iv) Although a bankruptcy court need not always find bad faith before invoking its inherent sanction power, the imposition of such sanctions may require an express finding that a lawyer (acting as an advocate rather than an officer of the court) acted in bad faith supported by clear evidence that the lawyer's conduct was "entirely without color" and "motivated by improper purposes."
(v) A bankruptcy court may impose a civil contempt sanction that is compensatory or coercive, not punitive.
(vi) A contempt order is justified only where the movant establishes by clear and convincing evidence that the contemnor violated the court's order.
Id. (internal quotation marks and citations omitted). Therefore, Judge Chin emphasized, to demonstrate contempt justifying the imposition of sanctions, the party seeking a contempt order must establish that: (i) the order with which the contemnor failed to comply is clear and unambiguous; (ii) proof of noncompliance is clear and convincing; and (iii) the contemnor failed to diligently attempt to comply in a reasonable manner (the "King factors"). Id. at 566 (citing King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995)).
Applying these principles, the Second Circuit panel ruled that the bankruptcy court did not abuse its discretion in sanctioning Worms.
First, Judge Chin explained, because it is unclear whether the bankruptcy court could have relied on its express power in section 105(a) of the Bankruptcy Code to enforce compliance with a subpoena issued under Rule 45 of the Federal Rules of Civil Procedure, "the bankruptcy court was right to consider its inherent contempt authority." Id. at 567.
According to Judge Chin, "most importantly," the bankruptcy court, in ordering contempt sanctions, found that all of the King factors had been satisfied and that Worms had acted in bad faith. Specifically, he wrote, the record clearly established that the bankruptcy court's order was unambiguous, proof of Worms's failure to comply was clear and convincing, Worms failed even to attempt compliance, and the record "firmly support[ed] the bankruptcy court's finding that Worms 'knowingly and intentionally' engaged in a 'continuous pattern of obstructing legitimate discovery.'" Id. In addition, Judge Chin noted, because Worms had "abundant" notice of the consequences of his refusal to comply with the bankruptcy court's discovery orders pursuant to the court's inherent authority, Worms was afforded due process.
Finally, the Second Circuit panel noted that, although the fee order did not expressly state that the bankruptcy court was exercising its inherent authority in awarding attorneys' fees to Rozhkov, the order specifically incorporated the sanction order, which did include an express reference, and Worms was clearly aware that that "the bankruptcy court rested the civil contempt sanctions against him on its inherent authority." Id. at 569.
Outlook
There are several key takeaways from the Second Circuit's ruling in Markus. First, the decision clarifies that, in addition to a bankruptcy court's statutory powers under section 105(a) of the Bankruptcy Code, and whatever powers the court may have to sanction for contempt under applicable procedural rules, a bankruptcy court, like other federal courts, has inherent authority to sanction a party for civil contempt under appropriate circumstances. Second, if a bankruptcy court is relying on its inherent authority to sanction a party for civil contempt, it must state so explicitly. Third, although the Second Circuit has previously concluded that a bankruptcy court has the inherent power to impose civil contempt sanctions in nominal amounts, the court of appeals has now ruled as a matter of first impression that such punitive sanctions may also be imposed in non-nominal amounts.
Markus is an unusual case because it involved civil contempt sanctions in connection with a discovery dispute in a chapter 15 case (discovery may generally be obtained in a chapter 15 case in the same way that it is available in cases under other chapters of the Bankruptcy Code). Moreover, the sanctions were levied against an attorney rather than his client because the client was unable to respond to the discovery obligations. Recognizing that the client's compliance was not possible, the bankruptcy court afforded the attorney multiple opportunities to respond by taking reasonable steps to comply, such as contacting entities that could provide the requested discovery. The court sanctioned the attorney only after he failed to make any effort to do so, resulting in the required finding of bad faith. The ruling is therefore also a cautionary tale.
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