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6500 Cherrywood Ln - Greenbelt, MD 20770 - Main Tel: 301-344-8018 map
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This case addresses the following issue: whether a Maryland corporation whose charter has been forfeited can pursue an action for denial of discharge under Section 727 and determination of nondischargeability of a debt under Section 523. The Bankruptcy Court, J. Gordon, held that: (1) under Maryland law, a corporation whose charter is forfeit is a legal non-entity and therefore the original adversary proceeding filed by the forfeit corporation was a nullity, (2) while a director-trustee of the void entity could have brought the suit as a part of the winding up of the corporation’s affairs, that did not occur in this instance, and (3) the subsequent revival of the corporate charter did not serve to resurrect the adversary proceeding since the limitations periods in Bankruptcy Rules 4004(a) and 4007(c) expired while the charter was forfeited thus divesting the corporation of the cause of action. As there was no action to prosecute and the refiling of the action was barred by the Bankruptcy Rules, the Court granted Debtor’s motion to dismiss.

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Robert A. Gordon