To Bankruptcy Creditors Supreme Court Applies Civil Contempt Standard

The US Supreme Court ruled Monday that a creditor may be held in civil contempt for violating a bankruptcy court's discharge order if there is no fair ground of doubt as to whether the order barred the creditor's conduct.

The case, Taggart v. Lorenzen, involved the petitioner Bradley Taggart, who had once owned an interest in an Oregon company, and the respondents, the same Oregon company and two of its other owners. Before the trial for that proceeding, Taggart filed for bankruptcy and the court issued a discharge order releasing Taggart from debts incurred prior to bankruptcy.

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