Citizens Bank of Maryland v. Strumpf

Summary

The Court unanimously held that a bank's temporary refusal to pay funds from a debtor's account while seeking relief from the automatic stay to exercise a setoff right did not violate the Bankruptcy Code's automatic stay. Justice Scalia explained that the hold was not a setoff under § 362(a)(7) because the bank did not intend permanently to settle the accounts. The hold also did not violate §§ 362(a)(3) or (a)(6), because it merely suspended performance of the bank's promise to pay and was consistent with the Code's protection of setoff rights. The Court reversed the Fourth Circuit's judgment. There were no separate opinions.