PENNSYLVANIA BANKRUPTCY COURT AWARDS DAMAGES FOR POWER COMPANY’S BANKRUPTCY STAY VIOLATIONS

The Bankruptcy Court for the Eastern District of Pennsylvania awarded $20,000 in actual damages to debtor, Matthew Minarik (“Minarik”), based on PPL Electric Utilities Corporation’s (“PPL”) continued violations of an automatic bankruptcy stay. In re: Matthew T. Minarik, Bky. No. 25-10193 (PMM) (Bankr. ED Pa. November 17, 2025). The Court rejected the debtor’s request for punitive damages.

Minarik fell behind on his electric bill and, ostensibly, other debts so he filed for chapter 7 bankruptcy protection in January 2025. i Pursuant to 11 U.S.C. §362, immediately upon filing for bankruptcy protection, Minarik’s creditors were required to cease collection activities. ii Despite receiving electronic notice of Minarik’s bankruptcy, PPL continued to demand payment and threatened to shut of Minarik’s electricity. iii

The Court noted Minarik was a disabled veteran who suffered from “anxiety, stress, nerve pain, and back issues” and that his daughter suffered from chronic lung disease. iv Due to her condition, electricity to regulate the home’s temperature and ensure access to a functional oxygen tank was imperative. v For these reasons, PPL’s threats to turn of the electricity kept Minarik up at night and caused emotional distress. After Minarik filed for bankruptcy protection, PPL still called him and sent emails, text messages, and letters demanding payment and threatening to discontinue service. vi

Due to the ongoing collection efforts, in March 2025 Minarik moved for sanctions against PPL seeking actual and punitive damages. vii The court conducted an evidentiary hearing in May 2025 where the Court considered testimony from Minarik and Beth Fronheiser, a credit and collection manager at PPL. viii During the proceedings Minarik explained the undue stress and anxiety caused from PPL’s continued collection efforts and threats to shut of power. ix In response, Fronheiser explained that PPL did not intentionally violate the automatic stay, but that the stay violations resulted from “internal problems and ‘human error’” which PPL addressed by changing the “company’s alert system and internal structure.” x

The Court issued its opinion in November 2025, noting that the imposition of an automatic stay was a “central tenant of bankruptcy protection” and explaining that “a specific intent to violate the stay” was not required, notice of the stay and violating acts were sufficient. xi The Court concluded PPL willfully violated the bankruptcy stay and Minarik was entitled to $20,000 for the emotional distress he suffered. xii The majority of the Court’s opinion addressed jurisdictional issues surrounding Minarik’s request for punitive damages and whether such an award by the bankruptcy court would violate PPL’s Seventh Amendment right to a trial by jury. xiii

Ultimately, the Court concluded it could award punitive damages without violating the Seventh Amendment under the “public rights exception” because §362 stay violations were statutory in nature (not rooted in common law) and affected the public’s right to “orderly insolvency and reorganization” (as opposed to a private right). xiv Although concluding it had jurisdiction to award punitive damages and that PPL’s actions were “inappropriate and outside the law” the Court concluded PPL’s collection efforts were not adequately “egregious” or “flagrant” to justify a punitive award. xv The Court elaborated that there was no evidence PPL engaged in an “ongoing pattern of abusive behavior” which would warrant a “monetary judgment meant to punish and deter.” The Court denied Minarik’s request for punitive damages against PPL.

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1. The Bankruptcy Court for the Eastern District of Pennsylvania awarded $20,000 in actual damages to debtor, Matthew Minarik (“Minarik”), based on PPL Electric Utilities Corporation’s (“PPL”) continued violations of an automatic bankruptcy stay. In re: Matthew T. Minarik, Bky. No. 25-10193 (PMM) (Bankr. ED Pa. November 17, 2025).

   
   

2. Despite having notice of Minarik’s bankruptcy filing which prompted an automatic stay of any collection efforts, PPL continued to demand payment from Minarik and threatened to shut of his electricity if he didn’t bring his account current. Minarik moved for sanctions against PPL in the bankruptcy proceedings seeking both actual and punitive damages.

   
   

3. The Court found PPL willfully violated the stay and PPL’s continued attempts to collect on the debt caused Minarik emotional distress which warranted a damage award of $20,000. While concluding it had jurisdiction to award punitive damages, the Court found PPL’s actions were not adequately egregious to justify a punitive damage award.

   
   

i In re: Minarik, at 2.

ii In re: Minarik, at 5.

iii In re: Minarik, at 1.

iv In re: Minarik, at 2.

v In re: Minarik, at 4. Future references to this case are to this citation until indicated otherwise.

vi In re: Minarik, at 3.

vii In re: Minarik, at 3, 13.

viii In re: Minarik, at 2.

ix In re: Minarik, at 4.

x In re: Minarik, at 4-5.

xi In re: Minarik, at 5, 17-18.

xii In re: Minarik, at 18, 19.

xiii In re: Minarik, at 6-17.

xiv In re: Minarik, at 16.

xv In re: Minarik, at 20-21. Future references to this case are to this citation until indicated otherwise.

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