Jury Trials in Bankruptcy
By Nicholas Ortiz, Boston Bankruptcy Attorney on May 2, 2007 in Bankruptcy Practice and Procedure, General Bankruptcy Information, Massachusetts
The recent case of Container Recycling Alliance v. Lassman, 359 B.R. 358 (D.Mass. 2007) addressed the issue of when a party (in this case a creditor) retains the right to a jury trial in an adversary proceeding in bankruptcy. The right to a jury trial often allows a creditor to remove a case to a court other than the bankruptcy court. A debtor, trustee, or debtor in possession may wish to avoid this result because they prefer the expeditious bankruptcy court forum. This case analyzed whether a creditor’s counterclaim was equivalent to the filing of a proof of claim. This was the central point in examining the jury trial right. As the court stated
“[I]f a creditor files a claim against the estate, it loses any right to insist on a jury, not only as to its claim, but also as to claims by the trustee against it; if the creditor has not filed a claim, it can insist on a jury for legal claims asserted against it by the trustee.” Id. at 361.
This issue is relevant for consumers who wish to bring consumer protection claims against third-parties (such as debt collectors) in the bankruptcy court forum.
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