Sonnax Factors (Bankruptcy) Law and Legal Definition

Sonnax factors are a dozen factors that bankruptcy courts generally consider when deciding whether or not to lift an automatic stay. It is named after the decision In re Sonnax Indus., 907 F.2d 1280 (2d Cir. Vt. 1990) which referred to the twelve factors said in In re Curtis, 40 B.R. 795 (Bankr. D. Utah 1984) to decide whether litigation should be permitted to continue in another forum.

The twelve factors are: “(1) whether relief would result in partial or complete issue resolution; (2) lack of connection with or interference with bankruptcy case; (3) whether other proceeding involves debtor as fiduciary; (4) whether specialized tribunal with necessary expertise has been established to hear cause of action; (5) whether debtor's insurer has assumed full defense responsibility; (6) whether the action primarily involves third parties; (7) whether litigation in another forum would prejudice interests of other creditors; (8) whether judgment claim arising from other action is subject to equitable subordination; (9) whether movant's success in other proceeding would result in a judicial lien avoidable by debtor; (10) interests of judicial economy and expeditious and economical resolution of litigation; (11) whether parties are ready for trial in other proceeding; (12) impact of stay on parties and balance of harms.”

However these factors may not be relevant for all cases. The ultimate determination whether to lift a stay depends upon the facts underlying a given motion. These factors are also at times referred as Curtis Factors.