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The Seventh Circuit reverses the district court and affirms the bankruptcy court, finding that the hospital assessment fee of the state was a pre-petition claim and thus subject to the automatic stay.
The Seventh Circuit reverses the district court and affirms the
bankruptcy court, finding that the hospital assessment fee of the
state was a pre-petition claim and thus subject to the automatic
stay. The fee was determined by analyzing conduct of the debtor
occurring prepetition. The court discusses and applies the
"conduct test" to determine when the claim accrued and
ultimately determines it accrued prepetition. Thus, the state was
not permitted to withhold Medicaid reimbursements to offset the
claim postpetition. Opinion below.
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