In attempting to apply the § 362(b)(4) exception, courts look to the purposes of the law that the government seeks to enforce, to distinguish between situations in which a "state acts pursuant to its `police and regulatory power,' and where the state acts merely to protect its status as a creditor." Safety-Kleen, Inc. v. Wyche (In re Pinewood), 274 F.3d 846, 865 (4th Cir. 2001) (quoting Universal Life Church, Inc. v. United States (In re Universal Life Church, Inc.), 128 F.3d 1294, 1297 (9th Cir. 1997)); Enron Corp. v. People of the State of California (In re Enron Corp.), 314 B.R. 524, 535 (Bankr. S.D.N.Y. 2004). Two tests have been historically applied to resolve this question: (1) the "pecuniary purpose" test (sometimes referred to as the "pecuniary interest" test), and (2) the "public policy" test.
The Court concluded that “[s]uch a reading is problematic, both because it conflicts with the broad discretion Congress has expressly granted many administrative entities and because it is inconsistent with the limited authority Congress has vested in bankruptcy courts.”Id. Since that decision, most courts analyzing the police-power exception have looked not to the subjective merits of a governmental entity's exercise of its police power in a given case, but rather “only to the purpose of the law that the governmental unit is attempting to enforce.” In re Enron Corp., 314 B.R. 524, 535 (S.D.N.Y.2004). As the Fourth Circuit has put it, “[t]he inquiry is objective: we examine the purpose of the law that the state seeks to enforce rather than the state's intent in enforcing the law in a particular case.”
" Id. Since that decision, most courts analyzing the police-power exception have looked not to the subjective merits of a governmental entity's exercise of its police power in a given case, but rather "only to the purpose of the law that the governmental unit is attempting to enforce." In re Enron Corp., 314 B.R. 524, 535 (S.D.N.Y. 2004). As the Fourth Circuit has put it, "[t]he inquiry is objective: we examine the purpose of the law that the state seeks to enforce rather than the state's intent in enforcing the law in a particular case."
The first incarnation of this test is known as the pecuniary purpose test, under which the court looks to whether a governmental proceeding relates to public safety and welfare— which favors application of the stay exception—or to the government's interest in the debtor's estate—which does not. Fullington, 351 B.R. at 283 (citing In re Enron Corp., 314 B.R. 524, 535 (Bankr.S.D.N.Y. 2004)). Some courts have modified this test, however, creating the pecuniary advantage test, which asks not whether the governmental unit seeks property of the debtor's estate, but whether the specific acts that the government wishes to carry out would create a pecuniary advantage for the government vis-á-vis other creditors.
"The protections of the stay are automatic and mandatory with the filing of the bankruptcy petition." Enron Corp. v. Calif. ex rel. Lockyer (In re Enron Corp.), 314 B.R. 524, 533 (Bankr. S.D.N.Y. 2004). "The scope of the automatic stay is broad and is a fundamental debtor protection that not only protects debtors but protects creditors as well[,]" Enron Corp. 314 B.R. at 533 (internal citations omitted), and remains in effect throughout the pendency of the bankruptcy case. In re Printup, 264 B.R. 169, 173 (Bankr. E.D. Tenn. 2001). It applies to all debts, even those "that will ultimately be excepted from discharge, since one of the fundamental purposes of the automatic stay is to give the debtor `a breathing spell from his creditors' and `to be relieved of the financial pressures that drove him into bankruptcy.'"
"The protections of the stay are automatic and mandatory with the filing of the bankruptcy petition." Enron Corp. v. Calif. ex rel. Lockyer (In re Enron Corp.), 314 B.R. 524, 533 (Bankr. S.D.N.Y. 2004). "The scope of the automatic stay is broad and is a fundamental debtor protection that not only protects debtors but protects creditors as well[,]" Enron Corp. 314 B.R. at 533 (internal citations omitted), and remains in effect throughout the pendency of the bankruptcy case. In re Printup, 264 B.R. 169, 173 (Bankr. E.D. Tenn. 2001). It applies to all debts, even those "that will ultimately be excepted from discharge, since one of the fundamental purposes of the automatic stay is to give the debtor `a breathing spell from his creditors' and `to be relieved of the financial pressures that drove him into bankruptcy.'"
II The automatic stay, the protections of which are “automatic and mandatory with the filing of the bankruptcy petition [,]” Enron Corp. v. Calif. ex rel. Lockyer (In re Enron Corp.), 314 B.R. 524, 533 (Bankr.S.D.N.Y.2004), provides debtors with the opportunity to protect assets in order to marshal their resources in order to satisfy their outstanding obligations, and was designed “to give the debtor ‘a breathing spell from his creditors' and ‘to be relieved of the financial pressures that drove him into bankruptcy.’ ” In re Haas, 2004 WL 3132027, at *2, 2004 Bankr.LEXIS 2216, at *6 (Bankr.E.D.Va. Dec. 22, 2004) (quoting H.R. REP. NO. 95–595 at 340 (1977), 1978 U.S.C.C.A.N. 5963). “The scope of the automatic stay is broad and is a fundamental debtor protection that not only protects debtors but protects creditors as well.” Enron Corp., 314 B.R. at 533 (internal citations omitted). It is elementary that “the [automatic] stay comes into existence ‘automatically’ and ‘immediately’ upon the filing of a petition in bankruptcy[,]” Shaw v. Ehrlich, 294 B.R. 260, 268 (W.D.Va.2003), it remains in effect throughout the pendency of a debtor's bankruptcy case, and its purpose is “to provide the debtor a ‘breathing
Since MCorp, however, bankruptcy courts have analyzed whether the police or regulatory power is actually being invoked. See, e.g., Safety-Kleen, Inc. v. Wyche, et al, (In re Pinewood), 274 F. 3d 846 (4th Cir. 2001); Enron Corp. v. California ex rel. Lockyer (In re Enron Corp.), 314 B.R. 524 (Bankr. S.D.N.Y. 2004). In order to do so, they distinguish between "situations in which the state acts pursuant to its `police and regulatory power' and situations in which the state acts merely to protect its status as a creditor."
Since MCorp, however, bankruptcy courts have analyzed whether the police or regulatory power is actually being invoked. See, e.g., Safety-Kleen, Inc. v. Wyche, et al, (In re Pinewood), 274 F. 3d 846 (4th Cir. 2001); Enron Corp. v. California ex rel. Lockyer (In re Enron Corp.), 314 B.R. 524 (Bankr. S.D.N.Y. 2004). In order to do so, they distinguish between "situations in which the state acts pursuant to its `police and regulatory power' and situations in which the state acts merely to protect its status as a creditor."
"The protections of the stay are automatic and mandatory with the filing of the bankruptcy petition." Enron Corp. v. Calif. ex rel. Lockyer (In re Enron Corp.), 314 B.R. 524, 533 (Bankr. S.D.N.Y. 2004). "The scope of the automatic stay is broad and is a fundamental debtor protection that not only protects debtors but protects creditors as well[,]" Enron Corp., 314 B.R. at 533 (internal citations omitted), and remains in effect throughout the pendency of the bankruptcy case. In re Printup, 264 B.R. 169, 173 (Bankr. E.D. Tenn. 2001). It applies to all debts, even those "that will ultimately be excepted from discharge, since one of the fundamental purposes of the automatic stay is to give the debtor `a breathing spell from his creditors' and `to be relieved of the financial pressures that drove him into bankruptcy.'"