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ARTICLE · 26 JANUARY 2023

Violations Of The Automatic Stay: Willful Or Technical? Void Or Voidable? Distinctions Without A Difference

Cullen and Dykman
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A decision issued last month by Hon. Christopher D. Jaime of the U.S. Bankruptcy Court, Eastern District of California, touches upon several aspects of bankruptcy law which are of interest...

United StatesInsolvency/Bankruptcy/Re-Structuring
Michael Traison
Michael Traison
Jocelyn E. Lupetin
Jocelyn E. Lupetin

A decision issued last month by Hon. Christopher D. Jaime of the U.S. Bankruptcy Court, Eastern District of California, touches upon several aspects of bankruptcy law which are of interest to creditors and debtors alike. Valentine v. Holmes, et al., 2022 WL 17408093, Case No. 22-21184-B-13, Adversary No. 22-2086 (Bankr. E.D. Cal. Dec. 2, 2022). While the important points are distilled below, a reading of the entire decision is encouraged due to the specifics of the case.

The Valentine decision does away with the distinction between willful and technical violations of the automatic stay of 11 U.S.C. § 362(a) and holds that all acts taken in violation of the stay "are void and of absolutely no effect whatsoever regardless of whether the acts are willful or so-called 'technical' automatic stay violations."1 We have discussed issues related to the automatic stay provision in prior alerts2 and cannot overstress the need for creditors to remain vigilant and wary of

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