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Bankruptcy Rule 2004
Rule 2004 of the Federal Rules of Bankruptcy Procedure (Bankruptcy Rule 2004) is a crucial pre-litigation discovery tool to investigate potential Avoidance Actions ' causes of action under Chapter 5 of the Bankruptcy Code ' in light of the stringent federal Twombly/Iqbal pleading requirements that are applicable in bankruptcy litigation, and which effectively makes it more difficult for debtors and trustees to sufficiently plead claims for relief.
Specifically, in Bell Atl. Corp. v. Twombly, the Supreme Court adopted a heightened “plausibility” standard requiring a plaintiff's claim to provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action” in order to survive a motion to dismiss. 550 U.S. 544, 545 (2007). Subsequently, in Ashcroft v. Iqbal , the Supreme Court then clarified the “plausibility” standard enunciated in Twombly, by holding that “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face” for a plaintiff to prevail on a motion to dismiss. 556 U.S. 662, 678 (2009).
Stricter Scrutiny By the Courts
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