One Bowling Green, home of the U.S. Bankruptcy Court, Southern District of New York.
An important recent decision that merits discussion is In the Matter of Kossoff PLLC, 2021 WL 5492186 (Bankr. S.D.N.Y. 2021), because it discusses whether a bankruptcy court has the authority to incarcerate a person who has committed civil contempt. In Kossoff, an involuntary bankruptcy petition was filed against a law firm because it was alleged that millions of dollars were missing from the firm’s escrow account. The Chapter 7 Trustee, Albert Togut, sought to obtain information and documents from the court ordered representative of the law firm. Bankruptcy Judge Jones issued a series of court orders requiring the court-ordered representative to produce certain information and to fill out the schedules. The court-ordered representative failed to comply with various court orders.
The court found the court-ordered representative in civil contempt. Significantly, the court ordered that if the court-ordered representative failed to file schedules and produce a creditor list, then a bench warrant would issue: “Unless Mr. Kossoff provides the required schedules and a creditor list on or before November 30, 2021, and demonstrates to the Court that he has done so, the Court will issue a bench warrant for Mr. Kossoff’s arrest on or soon after December 1, as a coercive civil contempt sanction intended to induce his compliance with his Court-ordered obligations.” Id. at *2.
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