A circuit split currently exists over the scope of 11 U.S.C. § 303(i), which provides remedies for the improper filing of an involuntary bankruptcy petition. The Ninth Circuit has held that 11 U.S.C. § 303(i), an "ambiguous" statute, implicitly forbids non-debtors from obtaining any relief—under state or federal law—from an improper bankruptcy filing. Miles v. Okun (In re Miles), 430 F.3d 1083, 1093-94 (9th Cir. 2005). By contrast, the Third Circuit has rejected that position, finding that 11 U.S.C. § 303(i) does not forbid non-debtors from obtaining state-law damages over a wrongful petition for involuntary bankruptcy. Rosenberg v. DVI Receivables XVII, LLC, 835 F.3d 414, 422 (3d Cir. 2016) (specifically rejecting In re Miles).

This Petition presents two questions for review:

1. Does 11 U.S.C. § 303(i) forbid any recovery except to the debtor?

2. If 11 U.S.C. § 303(i) does forbid recovery except in favor of the debtor, can a non-debtor defend an involuntary petition on the debtor's behalf and request a recovery be paid to the debtor?

Whether 11 U.S.C. § 303(i) forbids non-debtors from obtaining relief from an improper bankruptcy filing