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IN RE GARDENS REGIONAL HOSPITAL AND MEDICAL CENTER

No. 18-60016.

975 F.3d 926 (2020)

IN RE GARDENS REGIONAL HOSPITAL AND MEDICAL CENTER, INC., Debtor, Gardens Regional Hospital and Medical Center Liquidating Trust, Appellant, v. State of California, and its Department of Health Care Services, Appellees.

United States Court of Appeals, Ninth Circuit.

Filed September 16, 2020.

Attorney(s) appearing for the Case

Andrew H. Sherman (argued), Sills Cummis & Gross P.C., Newark, New Jersey; Samuel R. Maizel and John A. Moe II , Dentons US LLP, Los Angeles, California; for Appellant.

Kenneth K. Wang (argued), Deputy Attorney General; Jennifer M. Kim , Supervising Deputy Attorney General; Julie Weng-Gutierrez , Senior Assistant Attorney General; Xavier Becerra , Attorney General; Office of the Attorney General, Los Angeles, California; for Appellee.

Before: Kim McLane Wardlaw and Daniel P. Collins, Circuit Judges, and Joseph F. Bataillon, District Judge.

OPINION

This case requires us to address the extent to which a creditor can deduct the amounts that a bankrupt debtor owes to that creditor from other payments that the creditor owes to the debtor. The Bankruptcy Code imposes significant limitations on such deductions if they constitute a "setoff," but the courts...

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