Here’s the introduction to their latest blog piece.

In a recent article, senior officials with the Department of Justice’s Office of the United States Trustee (the “UST”), the federal government’s watchdog of the bankruptcy system, reaffirmed the department’s position that bankruptcy relief is not available to businesses in the weed industry.  Such a reaffirmation of a well-established policy is not new. However, the article is noteworthy in that it clarifies just how broadly the UST is willing to expand the scope of that policy and that it may prevent “downstream” participants, such as landlords of marijuana dispensaries, from accessing relief under the bankruptcy code.

The article correctly notes that “the bankruptcy system may not be used as an instrument in the ongoing commission of a crime,” that “reorganization plans that permit or require continued illegal activity may not be confirmed,” and that “estate fiduciaries should not be required to administer assets if doing so would cause them to violate federal criminal law.” As such, it is the UST’s position that it will seek dismissal of a bankruptcy case filed by a company in the business of selling marijuana. The larger question addressed by the article, however, is what happens when a bankruptcy case “would not require the trustee to sell marijuana (but would require the trustee to administer other marijuana-derived property)” or in a case “where the debtor is a ‘downstream’ participant in a marijuana business, such as a lessor of a building used for a marijuana dispensary[?]”

Full article at