Involuntary Bankruptcy Cases

Summary

This practice note examines involuntary Chapters 7 and 11 bankruptcy cases. Involuntary cases are commenced by creditors to force individuals or companies into bankruptcy proceedings. Creditors employ this bankruptcy mechanism to investigate the alleged debtor's financial affairs, prevent the depletion of the debtor's assets, recover transferred assets, ensure the fair and orderly distribution of the alleged debtor's property among similarly positioned creditors, and effectuate economical administration. In re Caucus Distribs., 106 B.R. 890, 927–28 (Bankr. E.D. Va. 1989); see also Wechsler v. Macke Int'l Trade, Inc. (In re Macke Int'l Trade, Inc.), 370 B.R. 236, 245 (B.A.P. 9th Cir. 2007).