Complaint for a Declaratory Judgment to Determine the Validity, Priority, and Extent of a Lien or Other Interest in Property

Summary

This template is a Complaint for a Declaratory Judgment to Determine the Validity, Priority, and Extent of a Lien or Other Interest in Property to be filed in a bankruptcy proceeding. This template includes practical guidance, drafting notes, alternate, and optional clauses. Adversary proceedings are separate cases that are associated with the main bankruptcy proceeding. The complaint is the first document that will be filed in the adversary proceeding. It consists of a caption page, jurisdictional and venue allegations, factual allegations, claims for relief, a demand for relief, and the signature of the attorney or his or her client. It should be well organized and readable. Part VII of the Federal Rules of Bankruptcy Procedure (Bankruptcy Rules) governs adversary proceedings and incorporates (or adapts) most of the Federal Rules of Civil Procedure (Federal Rules). Bankruptcy Rule 7001 specifies the types of relief available only through an adversary proceeding and includes proceedings to determine the validity, priority, or extent of a lien or other interest in property and declaratory judgment actions. For more information on adversary proceedings, see Adversary Proceedings. For information on jurisdictional and venue issues, see Bankruptcy Jurisdiction and Venue in Bankruptcy Proceedings. For a full listing of key content that provides an overview of important topics when litigating disputes in bankruptcy cases, see Bankruptcy Litigation Resource Kit. For resources for attorneys representing a party in a Chapter 13 bankruptcy case, see Individual Chapter 13 Bankruptcy Resource Kit. This template is based on a dispute concerning multiple/competing liens on assets that have been sold in a Section 363 sale. In such cases, the proceeds of the sale are typically held in escrow pending a determination of the various rights and interests of the defendants. The question of the validity, priority, and extent of a lien is also sometimes a separate count in other adversary proceedings, such as avoidance actions under Sections 544-549 of the Bankruptcy Code. For information on actions that may involve the validity, priority, or extent of a lien or other interest in property and related information and templates, see: • Preferences • Fraudulent Transfers • Treatment of Pre-petition Liens in Post-petition Property under Section 552 • Equitable Subordination • Subordination and Recharacterization • Complaint to Avoid and Recover Preferential Transfers • Complaint to Avoid and Recover Fraudulent Transfers • Complaint to Avoid a Lien under Section 544(a) • Complaint to Avoid a Statutory Lien under Section 545 • Complaint to Avoid a Postpetition Transfer under Section 549 For your planning purposes, note that the defendant in a bankruptcy adversary proceeding must in general file an answer or other responsive papers within 30 days after issuance of the summons. Fed. R. Bankr. P. 7012(a)(1).