June 2014 Newsletter
Whenever there is an actual dispute, other than an adversary proceeding, before the bankruptcy court, the litigation to resolve that dispute is a contested matter. For example, the filing of an objection to a proof of claim, to a claim of exemption, or to a disclosure statement creates a dispute that is a contested matter. Even when an objection is not formally required, there may be a dispute. If a party in interest opposes the amount of compensation sought by a professional, there is a dispute that is a contested matter.
Adversary proceedings and contested matters are methods of handling disputes that may arise during a bankruptcy case. An adversary proceeding is basically a civil trial within the context of a bankruptcy case. It is initiated by a complaint, requires a filing fee, and follows rules much like the Federal Rules of Civil Procedure. Contested matters are more informal. Motions initiate contested matters, and most do not require a filing fee. The Bankruptcy Rules establish the types of disputes that fall into each category. Contested matters include objections to sales of the debtor’s property. Alternative dispute resolution is also available in some bankruptcy courts.
In a contested matter in a case under the Bankruptcy Code relief is to be requested by motion. Reasonable notice and opportunity for hearing is to be afforded the party against whom relief is sought. No response is required unless the court orders an answer to a motion.