Bankruptcy Cases Move Forward, With or Without Government Watchdog Oversight - ABI

Corporate bankruptcy cases unfolding in the nation’s federal courts are largely continuing during the government shutdown, even if it means furloughed Justice Department lawyers have to work for free, the Wall Street Journal reported. While the country’s bankruptcy courts have enough money to operate normally at least until Jan. 18, Justice Department officials are only allowed to play a limited role in continuing corporate bankruptcy cases during the shutdown. Some major cases are proceeding anyway. On Friday, a Delaware bankruptcy judge rejected the Justice Department’s request to pause the bankruptcy case of hospital operator Promise Healthcare Group LLC, which cares for more than 9,000 patients. Justice Department lawyers said their oversight power has been weakened by the government shutdown. Promise officials had argued that halting the case could scare off buyers who are interested in its 16 hospitals and two nursing homes. The Boca Raton, Fla., company employs about 4,500 people in nine states. Justice Department officials who are working without pay asked on Wednesday to halt the case, citing the heavily regulated nature of Promise’s operations. “I have limited ability to continue reviewing orders and participating in hearings,” Justice Department lawyer Danielle Pham told Judge Christopher Sontchi during a Friday hearing in U.S. Bankruptcy Court in Wilmington, Del.

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