The U.S. Bankruptcy Court for the District of Delaware declared, on July 14, that creditors known to debtors prior to filing for Chapter 11 bankruptcy that did not receive actual notice of the bankruptcy cases may pursue claims in the venue of their choice. See In re Rental Car Intermediate Holdings, No. 20-11247 MFW, slip op. at 30-32, 38, 2022 WL 2760127 (Bankr. D. Del. July 14, 2022). Neither personal knowledge of the debtors’ bankruptcy proceedings nor any filings made to date eviscerate the “known” creditors’ due process rights. In contrast, “unknown” creditors are barred from challenging the adequacy of a court-approved publication notice.

The Bankruptcy Code and rules balances creditors’ interests with the practicalities of Chapter 11 proceedings by requiring debtors to provide actual notice only to known creditors. Constructive notice by publication, in contrast, satisfies the due process rights of unknown creditors.

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