Motions to Reopen Bankruptcy Cases

Section 350(b) of the Bankruptcy Code provides that “[a] case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause.”11 U.S.C. § 350(b); Fed. R. Bankr. P. 5010. This Section immediately follows Section 350(a), which provides that a case shall be closed “[a]fter an estate is fully administered and the court has discharged the trustee[.]” 11 U.S.C. § 350(a). Section 350 “confers upon the bankruptcy court broad discretion in determining whether to reopen a case and its decision to grant or deny a motion to reopen is binding absent a clear abuse of discretion.” Mead v. Helm, No. 88-105, 1989 WL 292, at *3 (6th Cir. Jan. 4, 1989) (table) (citing Rosinski v. Boyd (In re Rosinski), 759 F.2d 539, 540-41 (6th Cir. 1985)).

Motions to reopen are decided on a case-by-case basis after the bankruptcy court weighs the equities of the case. In re Jenkins, 330 B.R. 625, 628 (Bankr. E.D. Tenn. 2005). In determining whether “cause” exists to reopen a closed case, courts “may consider numerous factors including equitable concerns, and ought to emphasize substance over technical considerations.” In re Wiggins, No. 12-13341, 2013 Bankr. LEXIS 3587, at *3 (Bankr. S.D.N.Y. Aug. 29, 2013) (quoting In re Wilson, 492 B.R. 691, 695 (Bankr. S.D.N.Y. 2013)); see also In re Emmerling, 223 B.R. 860, 864 (B.A.P. 2d Cir. 1997) (discussing cause to reopen for equitable concerns). The factors for the Court to consider include:

(1) the length of time that the case was closed;

(2) whether a nonbankruptcy forum has jurisdiction to determine the issue which is the basis for reopening the case;

(3) whether prior litigation in the bankruptcy court determined that a state court would be the appropriate forum;

(4) whether any parties would suffer prejudice should the court grant or deny the motion to reopen;

(5) the extent of the benefit to the debtor by reopening; and

(6) whether it is clear at the outset that no relief would be forthcoming to the debtor by granting the motion to reopen.

Wilson, 492 B.R. at 695.


 

By: Jamie L. Harris, Esq.

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