Imagine a boxing match where one fighter is against the ropes and getting pounded. The referee stops the fight temporarily. Now, the fighter who was being beaten asks the ref if the fighter can keep going but asks that the other fighter have his hands tied behind his back when they pick up where they left off.
Sound fair? But a business that goes into reorganization under bankrupty law, seeks to leave its corner (a civil case was “stayed” pending the ongoing bankruptcy) and asks that its adversary’s counterclaim (i.e., counter-punch) be barred.
A Texas collection agency is mixing it up with Target, a former client of the collections firm. Having gone through bankruptcy reorganization, the plaintiff collection agency would like to climb back into the ring with Targe but has little interest in Target being able to fight back. Unsurprisingly, Target disagrees.
Sr. U.S. District Court Judge David S. Doty (D. Minn.) heard arguments on the motion late last week and he has taken the motion under advisement. Bankruptcy law is intended to give give debtors a “fresh start” but it remains to be seen whether this would entail shifting (or perhaps reversing) the odds in a pending breach of contract dispute.