Case Conclusion Date: 09.27.1993
Practice Area: Chapter 11 bankruptcy
Outcome: Court of Appeals upheld District Court for us
Description: The defendant in this case was the post-bankruptcy reorganization trust established to administer the assets of United States Lines and its related companies, which filed for Chapter 11 bankruptcy relief in 1986. Plaintiff Emil Aslanidis was a seaman injured in a 1985 fire aboard a ship owned by US Lines. Like all other pre-petition claims, this one was stayed by the Bankruptcy Code. Personal injury claims like this one are governed by a three year statute of limitations, which had not yet expired at the time that US Lines for for bankruptcy relief. Plaintiff's lawyer moved in Bankruptcy Court for relief from the automatic stay in 1991, and the motion was granted. But plaintiff's lawyer failed to file his personal injury lawsuit within the 30 day period provided by 11 USC Section 108(c), so the Trust (my client) moved to dismiss the lawsuit. The Plaintiff argued that he still had the 18 months that remained on the limitations period when US Lines filed for bankruptcy protection, plus the 30 days provided by Section 108(c). For purposes of this litigation, that statute said that whenever there is a time limit to do something that is affected by a bankruptcy filing, the period of time that would otherwise have expired is extended for 30 days from, among other things, the date relief from the automatic stay is granted. The US District Court for the Southern District of NY ruled in favor of US Lines, and dismissed the lawsuit. Plaintiff appealed. The Second Circuit Court of Appeals upheld the decision of the District Court, and determined that the statute of limitations on the Plaintiff's personal injury case had continued to run, and had run out, during the US Lines bankruptcy proceedings. Therefore, by asking for relief from stay, Plaintiff's counsel set his own 30 day clock in motion, within which the new lawsuit against US Lines had to be filed.