Blue Cross Blue Shield of North Carolina v. Jemsek Clinic, P.A.

DIANA GRIBBON MOTZ, Circuit Judge:

In this case, the bankruptcy court imposed staggering sanctions on a creditor. It dismissed with prejudice claims that the creditor valued at over $10 million, and it ordered the creditor to pay the debtor $1.29 million in attorneys’ fees and costs. Although the bankruptcy court did not clearly err in finding that the creditor acted in bad faith, these sanctions were excessive. We therefore vacate the judgment, of the district court adopting the bankruptcy court’s sanctions order and remand for further proceedings consistent with this opinion.

I

In May 2003, a…