10-C-574 Palmer v. Bank of the West

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Bankruptcy
Automatic stay; small business cases

Where a small business debtor’s first bankruptcy was dismissed within two years, it is not entitled to an automatic stay when it files a second case.

“On appeal, Palmer argues that she can meet the requirements of §362(n)(2)(B)(i) if she demonstrates that the filing of the petition in her second small business case resulted from circumstances that were not foreseeable at the time the first case was filed. Confusion arises from the phrase ‘circumstances beyond the control of the debtor not foreseeable at the time the case then pending was filed.’ § 362(n)(2)(B)(i) (emphasis added). Palmer insists that ‘the case then pending’ refers to her first small business case. However, the plain language of this provision does not support Palmer’s proposed interpretation. Instead, ‘the case then pending’ refers to a separate case that is pending at the time the second petition is filed. Obviously, this does not apply to Palmer’s situation because her first case was already dismissed by the time she filed her second case.”

10-C-574 Palmer v. Bank of the West

E.D.Wis., Randa, J.