Lawrence Kotler, left, and Ryan Spengler, right, of Duane Morris. Courtesy photos Bankruptcy Court Sides With Cannabis Business (Twice) in Reorg Plan
This ruling may result in more cannabis-related bankruptcy filings as sophisticated bankruptcy attorneys now have a framework for testing the trustee's historic opposition to bankruptcy protection for cannabis companies.
November 02, 2023 at 10:18 AM
8 minute read
Bankruptcy
In contrast with a majority of bankruptcy courts that routinely dismiss cannabis-related cases for perceived violations of the Controlled Substances Act (CSA), the U.S. Bankruptcy Court for the Central District of California in the recent opinion In re Hacienda, No. 2:22-BK-15163-NB, (Bankr. C.D. Cal. July 11, 2023), refused to conform to the same historical standard. Instead, the Bankruptcy Court struck down the U.S. trustee's motion to dismiss not once but twice in favor of confirming a marijuana business' Chapter 11 plan of reorganization.
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