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Major Fees And Damages After Failed Involuntary Chapter 7

The dismissal of an involuntary Ch. 7 resulted in a decision against petitioning creditor Kevin Adell, in favor of alleged debtor JRH LLC.
The Honigman firm successfully defended JRH from the failed involuntary petition, obtaining a judgment against Adell for compensatory and punitive damages, plus being granted fees and costs under Sec. 303(i) of the Bankruptcy Code.
Honigman sought an award of further fees from Adell for years of continuous legal services; defenses of the original judgment during appeals, attempting to collect on it, defense of JRH in Adell’s bankruptcy (commenced as 11, converted to 7, and ultimately dismissed). 
JRH filed a Motion for Additional Punitive Damages against Adell for post-award conduct.
The matters for consideration were remanded from the U.S. District Court to the Eastern District of MI, Southern Division Bankruptcy Court for an Opinion and Order on them.
Of significance, the District Court concluded “Sec. 303(i) should be interpreted to permit a bankruptcy court to consider attorney fees and costs incurred following the dismissal of an involuntary petition”.   The Bankruptcy Code does not limit a fee award recovery be bound by this date. 
The basis for that conclusion recognizes “it is possible that the majority of attorney’s fees were actually incurred after an involuntary petition is dismissed”. 
The remand instructions of the District Court pointedly included that the Bankruptcy Court does have authority to consider post-judgment attorney fees and costs. 
A second award of attorney fees was warranted and granted to Honigman. 
The Bankruptcy Court can award punitive damages and sanctions for abusing the judicial process when bad faith occurs (Sec. 105(a) of the Code).  A display of this is acting egregiously, conspicuously and flagrantly bad, and unreasonable.
For a Federal Court to impose sanctions when a party has acted in bad faith, it must clearly appear this act was knowingly designed to thwart the judicial process (see Chambers, 501 U.S. 32).
This creditor abused the Court’s processes, and evaded the Bankruptcy Court’s initial punishment.  The U.S. District Court identified the power to grant sanctions for judicial abuses “including conduct which occurred in other courts”.
Upon remand from the District Court, it is the Bankruptcy Court’s responsibility, to provide deterrence from an escalation of abuses to the system.
That is the intent of granting an appropriate sanction award against a creditor in favor of a wronged debtor, including an alleged debtor.