Page 5 - A Practical Guide to Chapter11 Bankruptcy Publication Notice

chapter 1 Traditional bankruptcy notice

It is commonplace to find bankruptcy notices published in the legal notice section of the Wall Street
Journal or New York Times. Individual notice supplemented by print publication notice is traditionally
traditional what courts have required of debtors to satisfy notice requirements in bankruptcy cases. Decisions as to

the extent of the publication notice that debtors are required to provide to creditors in a bankruptcy case
hinge on whether creditors are primarily “known” or “unknown” to the debtor.
bankruptcy

Federal Rules of Bankruptcy Constitutional Due Process
notice Procedure – Rule 2002 and Rule 9008 Requirements

Bankruptcy Rule 2002 provides the specific
Within the wide discretion that Rule 2002 and
requirements for notifying creditors. The general Rule 9008 provide, courts must still be mindful of
premise set forth in Rule 2002 is that notice must due process requirements. In all legal proceedings,
be provided by mail. The rule includes several to afford sufficient due process, notice must be
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paragraphs on the timing, content and special “reasonably calculated, under all the circumstances,
considerations associated with the mailed notice to apprise interested parties of the pendency of the
requirement. Regarding publication notice, the action.” This means that parties whose interests
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rule provides that “The court may order notice may be affected must be given appropriate notice
by publication if it finds that notice by mail is regarding their rights and afforded the opportunity
impracticable or that it is desirable to supplement to participate in the action. If notice is so inadequate
the notice.” The advisory notes to the that a creditor’s due process rights are not served, it
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rule state, “when publication of notices is required can result in their claims not being discharged in a
or desirable, reference should be made to Rule bankruptcy case. 6
9008.” 3
Satisfying due process is not generally difficult
In Rule 9008, it states, “Whenever these in a situation where all creditors are known
rules require or authorize service or notice by and mailed notice is executed properly. It can
publication, the court shall, to the extent not be more challenging when there are many
otherwise specified in these rules, determine unknown or unidentifiable creditors (or creditors
the form and manner thereof, including the for whom current addresses are not available).
newspaper or other medium to be used and the A known creditor is one who is either known
number of publications.” Thus, the bankruptcy or is reasonably ascertainable by the debtor. A
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rules make it clear that courts have broad creditor is reasonably ascertainable if reasonably
discretion to decide whether publication notice diligent efforts will identity the creditor. An
is necessary at all, and if it is, they also have unknown creditor, however, is one whose identity
discretion as to its form and scope. cannot be determined by the debtor even with
due diligence.
In all legal proceedings, to afford sufficient
due process, notice must be “reasonably
calculated, under all the circumstances, to
apprise interested parties of the pendency
of the action.”

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