Federal Court upholds creditor’s rights decision.

March 18, 2016

The U.S. District Court for the Western District of Virginia upheld a favorable creditor’s rights decision on appeal from the U.S. Bankruptcy Court for W.D.Va.  In Phillip Guertler, et al., v. DuPont Community Credit Union, Judge Elizabeth K. Dillon ruled that a creditor who elects not to sue all debtors on a joint contract in an original action does not lose its right to sue any of the joint debtors in a subsequent action.  Thus, a creditor properly filed a proof of claim against joint debtors even though it had not sued both debtors prior to the commencement of one debtor’s bankruptcy petition.

“The Court’s ruling confirmed the interpretation of relevant statues that had been reached by several treatises, but which had not yet been precisely addressed by Virginia courts,” said Paul Dryer, attorney for the creditor.  The legal arguments which Dryer advanced on behalf of his client were rooted both in a 19th century opinion by the Virginia Supreme Court and the current provisions of the Bankruptcy Code.

By staying abreast of the recent developments in the law as well as maintaining an understanding of the framework created by existing precedent, Mr. Dryer and the Firm are able to provide effective representation to clients regarding all facets of creditor’s rights cases.