Avianca Holdings S.A., 648 B.R. 358

Avianca and affiliated debtors filed chapter 11 in 2020; their joint chapter 11 plan was confirmed on November 2, 2021 and became effective December 1, 2021.
The confirmed Plan contains a broad Discharge Provision (section IX.B) and a permanent Injunction Provision (section IX.G) barring holders of discharged claims from commencing or continuing actions to collect those claims.
Over 150 creditors (the "Foreign Plaintiffs") filed proofs of claim in the chapter 11 cases and also continued to prosecute lawsuits in Colombia and Brazil (the "Foreign Actions") instead of discontinuing them.
Reorganized Debtors notified Foreign Plaintiffs of the Plan, demanded withdrawal/ discontinuance of the Foreign Actions, and sought compliance; many plaintiffs/counsel did not comply and expressly refused in some instances.
The Reorganized Debtors moved for civil contempt sanctions under 11 U.S.C. §105(a) and §524, asking the Court to give Foreign Plaintiffs 30 days to discontinue the Foreign Actions and to disallow their claims if they failed to comply.
The Court granted the motion: it found contempt appropriate and ordered conditional disallowance of the Foreign Litigation Proofs of Claim unless the Foreign Plaintiffs discontinue the Foreign Actions within 30 days.

Issue	Avianca's Argument	Foreign Plaintiffs' Argument	Held
Whether courts may impose civil contempt sanctions for continuing foreign suits after confirmation discharge and injunction.	Filing proofs of claim submits creditors to the bankruptcy court's equitable jurisdiction; continuing Foreign Actions violates §524 and Plan injunction.	(Implicit) Plaintiffs continued foreign suits despite proofs of claim; some argued they need not choose forum.	Court: Contempt proper — creditors had notice, violated clear injunction/discharge, and made no diligent effort to comply.
Whether conditional disallowance of claims is an appropriate coercive contempt sanction.	Conditional disallowance (30-day cure) is a coercive, reasonable remedy to prevent double recovery and ensure compliance; no unjust financial burden because cure is simple.	(Implicit) Plaintiffs continued suits; no record of compliance efforts.	Court: Approved conditional disallowance as coercive sanction tailored to prevent double recovery; claims will be disallowed if Foreign Actions not discontinued within 30 days.

Taggart v. Lorenzen, 139 S. Ct. 1795 (U.S. 2019) (standard for civil contempt in bankruptcy: no objectively reasonable basis to conclude conduct might be lawful under discharge order)
Katchen v. Landy, 382 U.S. 323 (U.S. 1966) (filing a proof of claim submits creditor to bankruptcy court jurisdiction)
In re CBI Holding Co., 529 F.3d 432 (2d Cir. 2008) (jurisdictional submission by claim filing principle)
Granfinanciera v. Nordberg, 492 U.S. 33 (U.S. 1989) (distinguishing actions that implicate jury-trial rights from core bankruptcy proceedings)
Weston Capital Advisors v. PT Bank Mutiara, Tbk, [citation="738 F. App'x 19"] (2d Cir. 2018) (elements for civil contempt: clear order, clear-and-convincing proof of noncompliance, and lack of diligent efforts to comply)
McComb v. Jacksonville Paper Co., 336 U.S. 187 (U.S. 1949) (civil contempt may be used to coerce compliance or compensate for damages)
Nat'l Org. for Women v. Terry, 886 F.2d 1339 (2d Cir. 1989) (standards for civil contempt remedies and assessment of coercive sanctions)