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Cavalier Pharmacy v. Health Mart Atlas (In re Cavalier Pharmacy) (Case No. 23-70004; A.P. No. 23-07002) 3/8/23

Plaintiff, an independent retail community pharmacy, filed a motion for a temporary restraining order and preliminary injunction seeking to require the Defendant, a Pharmacy Services Administrative Organization, to turn over funds the debtor contended belong to it. In denying the Plaintiff’s motion, the Court found that the Plaintiff failed to meet its burden to prove that it is likely to succeed on the merits of the underlying claims in the adversary proceeding litigation. Here, the test is whether the debtor will be successful in this litigation where it seeks turnover of its receivables, an injunction and a finding that the automatic stay is violated. The Court found that the doctrine of recoupment applies to such receivables under the terms of the contract signed by the parties, thus the automatic stay provided for in the Bankruptcy Code does not apply.

Date: 
Wednesday, March 8, 2023
Category: 
Automatic Stay
Burden of Proof
Injunctions
Chapter: 
11