Case Explained: Summary Calendar In the Matter of Sourcewater, Incorporated. Debtor Joshua Adler v. Energy Debt Holdings L.L.C

Court: United States Court of Appeals for the Fifth Circuit Filed: 2026-06-16 The fifth-circuit affirmed the district court’s order upholding $25,000 in civil contempt sanctions imposed against Joshua Adler for violating bankruptcy court orders. The court held that Adler acted in bad faith by filing an adversary proceeding to subordinate Energy Debt Holdings’ (EDH) note priority one day before a sale hearing, which directly contravened the timeline and prohibitions set forth in the Chapter 11 Cash Collateral Order and Confirmation Order. These orders explicitly required any challenges to the validity or priority of EDH’s obligations to be raised within a specific “Challenge Period,” deeming all other claims forever waived and barred if filed outside that window. The court applied de novo review to conclusions of law and clear-error review to factual findings, concluding there was substantial evidence supporting the bankruptcy court’s determination that Adler’s late filing constituted an abuse of process under 11 U.S.C. § 105(a) and the court’s inherent civil contempt power. As a result, the sanctions order remains in effect, requiring Adler to pay the assessed amount to EDH. Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.