Montana Nonprofit’s Bankruptcy Halts BNSF’s Fraud Suit Recovery

BNSF Railway Co.'s attempt to recover attorneys’ fees in a government health-care fraud suit is delayed because defendant The Center for Asbestos Related Disease Inc. filed for bankruptcy.

The attorneys’ fees motion by BNSF—the whistleblower in the False Claims Act suit—is subject to the automatic stay in the US bankruptcy code, Judge Dana L. Christensen of the US District Court for the District of Montana said in a Monday order.

A bankruptcy petition acts as a stay of any act to collect or recover a claim against the debtor that arose before the bankruptcy case began, the court said.

A ...