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Language Barriers In Bankruptcy?

Posted By admin || 16-Feb-2011

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In a recent bankruptcy case of Caribbean Petroleum, the bankruptcy court was faced with deciding whether a Puerto Rico based franchisee could object to the termination of their contract based on the fact that the bankruptcy notices they received were in English only. The bankruptcy court ruled that the franchisee could not object based on the notices being in English only because Puerto Rico has two official languages, English and Spanish, and the franchisee never demonstrated that they could not read English.

But another blogger brought up an interesting question:

"What would the court in Caribbean Petroleum have done if it had found that the franchisees did not understand the documents they received? Would it have found that the rejection notice was not adequate? Would it have accommodated the franchisees? How have other courts tackled this and similar issues concerning language barriers? Should the results of a case differ in states where English is the official language from states that have no official language?"

This is a matter that is destined to show up again in bankruptcy courts as doing business becomes more globalized.  For individual debtors as well as businesses filing bankruptcy having a creditor who does not understand English could raise some concerns.  Will a bankruptcy court say that the creditor was not properly notified of the bankruptcy if the documents are not in a language they could understand?

Is it the responsibility of the debtor filing bankruptcy to provide notices in a language the creditor can understand or should the creditor be held responsible for getting their own translations? Technically there is no "official" language in the United States; but customarily business is done in English. Could we see in the future a bankruptcy court that provides documents in several languages?  It's a real possibility as our global economy continues to expand.

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