In most cases, the automatic stay, under section 362 of title 11 of the United States Code (the "Bankruptcy Code"), stays all creditors from pursuing litigation against debtors. Nonetheless, non-debtor entities can obtain the protection afforded to debtors by the automatic stay in limited circumstances. There are two primary ways of staying litigation against a non-debtor. First, through demonstrating that there are exceptional circumstances to extend section 362 to a non-debtor. Second, through satisfying the standard for an injunction pursuant to section 105 of the Bankruptcy Code.
This Article considers the circumstances by which a non-debtor entity may receive the protection of the automatic stay under section 362. Part I discusses the general standard under section 362 — that the automatic stay only extends to debtors. Part II analyzes the main exceptions to the general rule, whereby the automatic stay may be extended to non-debtors. Part III sets forth the injunction standard under section 105, which may be utilized to enjoin actions against a non-debtor.