In a brief order expressing a surprising view of the commonplace entry of joint administration orders in chapter 11 bankruptcy cases, a Pennsylvania bankruptcy court judge rejected entry of such an order in a recent case. For those unfamiliar, Bankruptcy Rule 1015 provides that if two or more petitions are pending in the same court involving a debtor and an affiliate “the court may order a joint administration of the estates.”
In the order, bankruptcy judge Thomas Agresti acknowledges that the “relationship between the two Debtors clearly falls within the scope of Rule 1015(b) such that joint administration could be ordered.” He also recognizes that no parties had objected to the motion seeking joint administration of the two cases – In re Erie Hockey Club Limited, Case No. 15-10380-TPA, and In re Bassin Hockey, Inc., Case No. 15-10381.
Nevertheless, Agresti noted that the use of the term “may” in Bankruptcy Rule 1015 makes approval of joint administration discretionary, as opposed to mandatory. Thereafter, the judge expressed his viewpoint:
It has been this Court’s experience that, except in certain circumstances that do not appear to be present here, joint administration provides little advantage, and even that may be outweighed by negative consequences such as the addition of an element of confusion to the process.
He therefore denied the joint administration motion and ordered that the cases proceed in tandem.
