The question now will be
posted on
Mar 21, 2013 05:09PM
does the ITC proceeding get stayed also? In the NDoC, we were the defendants so I believe the stay is truly automatic. Since we are the complainants at the ITC, I believe TPL et al can continue with the ITC litigation.
According to the section of the article I posted previously, it appears TPL et al can continue at the ITC. Hopefully I am interpreting it correctly and again it would be nice to get an IR from PTSC.
The Automatic Stay and Suits By the Debtor. An important characteristic of the automatic stay is that while it generally prevents litigation activities against the debtor, it is far less restrictive of litigation activities by the debtor. 11 U.S.C. section 362(a)(1) states that the stay applies to actions "against the debtor," and 11 U.S.C. section 362(a)(3) states that the stay applies to acts to obtain possession of or to exercise control over property of the estate.[52] Section 362 does not, however, prevent the trustee or debtor in possession from prosecuting or appearing in an action that the debtor initiated and that is pending at the time of bankruptcy.[53]
A party sued by the debtor retains the ability to defend itself: "There is ... no policy of preventing persons whom the bankrupt has sued from protecting their legal rights. True, the bankrupt's cause of action is an asset of the estate; but as the defendant in the bankrupt's suit is not, by opposing that suit, seeking to take possession of it, subsection (a)(3) is no more applicable than (a)(1) is."[54] "Out of fairness, the defendant should be allowed to defend himself from attack, and the automatic stay should not tie the hands of a defendant while the plaintiff debtor is given free rein to litigate."[55] Courts have held that creditors can move to dismiss a debtor's lawsuit as long as that creditor asserts no counterclaims.[56] A defendant's ability to assert counterclaims against the debtor, however, is a more complicated issue.