In seeking the imposition of sanctions in a bankruptcy case, practitioners invariably invoke Bankruptcy Rule 9011 as the basis for sanctions. In truth, depending on the case, a bankruptcy court can impose sanctions under any of several sources of authority, including not only Rule 9011, but also the court’s own inherent power; Section 1927 of Title 28; Bankruptcy Code Section 105(a); and the specific statute or rule applicable to the case before the court. This article briefly summarizes this concept.
Rule 9011
Rule 9011(b) provides in relevant part that an attorney or unrepresented party, by presenting to the court a pleading or other paper, is certifying that to the best of the person’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances, that (i) it is not being presented for an improper purpose, such as to harass or to cause unnecessary delay; (2) the legal contentions are warranted by existing law or a nonfrivolous argument for the extension of new law; and (3) the allegations have evidentiary support. Rule 9011(c) provides that violation of Rule 9011(b) can result in sanction upon the offending attorneys, law firms or parties.
