Forbearance Agreement Wasn’t an Enforceable Waiver of the Automatic Stay

February 24, 2025

Forbearance Agreement Wasn’t an Enforceable Waiver of the Automatic Stay

Bankruptcy Judge Laura Grandy (politely) faulted other federal courts for failing to follow the Illinois mortgage statute and decisions by the Illinois Supreme Court.

Lorem ipsum dolor sit amet consectetur, adipisicing elit. Soluta dolorem consequuntur corporis pariatur rem aliquam similique animi fugiat iure explicabo eius omnis minima labore natus, repellat aut odio fuga vero. Lorem ipsum dolor sit amet consectetur, adipisicing elit. Soluta dolorem consequuntur corporis pariatur rem aliquam similique animi fugiat iure explicabo eius omnis minima labore natus, repellat aut odio fuga vero.

Lorem ipsum dolor sit amet consectetur, adipisicing elit. Soluta dolorem consequuntur corporis pariatur remaliquam similique animi fugiat iure explicabo eius omnis minima labore natus, repellat aut odio fuga vero. Lorem ipsum dolor sit amet consectetur, adipisicing elit. Soluta dolorem consequuntur corporis pariatur remaliquam similique animi fugiat iure explicabo eius omnis minima labore natus, repellat aut odio fuga vero.

ABI MEMBERS ONLY

ABI Membership is required to access the full summary. Please Sign in using your ABI Member credentials.

Not a Member yet? Try Us Out!

Sign up to receive Rochelle's Daily Wire and try out our membership for 30 days. When you do — you'll see why our members "Think ABI First."

Learn More

Opinion Link

View Opinion

https://abi-opinions.s3.us-east-1.amazonaws.com/DJK.pdf

Case Details

Case Citation

In re DJK Enterprises LLC, 24-60126 (Bankr. S.D. Ill. Feb. 13, 2025)

Case Name

In re DJK Enterprises LLC

Case Type

Business

Court

7th Circuit

Illinois

Illinois Southern District

Bankruptcy Tags

Automatic Stay

Mortgage

Business Reorganization

Finance and Banking

Small Business

Comments

Submitted by Thomas Salerno on February 24, 2025

Bill--a fundamental issue I have always seen in any of these cases involving the enforceability of pre-bankruptcy waivers of bankruptcy rights is that they ignore that bankruptcy is a collective process. Hence, once in bankruptcy, there are considerations other than what a borrower/debtor and lender/creditor want to agree to do. Once in bankruptcy, the borrower becomes a fiduciary for the estate. Hence, whatever waiver of rights happened before he/she put on the DIP hat should not be enforced as other necessary parties (committees, USTs, etc.) weren't part of those negotiations because they didn't exist yet. Just my two cents.