Small Bus. Admin. v. Harold Rinehart Marilyn Rinehart, 887 F.2d 165 (8th Cir. 1989). · Go Syfert
Small Bus. Admin. v. Harold Rinehart Marilyn Rinehart, 887 F.2d 165 (8th Cir. 1989). Cases Citing This Book View Copy Cite
“here is no authority for distinguishing between the capacity of parties in relation to each other outside of bankruptcy and that capacity following the filing of a bankruptcy petition.”
142 citation events (21 in the last 25 years) across 52 distinct courts.
Strongest positive: SVB Financial Group (nysb, 2023-05-17)
Treatment trajectory · 1989 → 2026 · click a year to view as-of
1989 2007 2026
Top citers, strongest first. 50 distinct citers. How cited ↗
discussed Cited as authority (verbatim quote) SVB Financial Group
Bankr. S.D.N.Y. · 2023 · quote attribution · 1 verbatim quote · confidence high
governmental agency violates the automatic stay when it 'holds' or 'freezes' payments the debtor is otherwise entitled to receive.
discussed Cited as authority (quoted) Cirkelselskabet AF 16 Juli 2008 ApS v. Neupert (In re Archer USA, Inc.)
W.D. Wash. · 2017 · quote attribution · 1 verbatim quote · confidence low
here is no authority for distinguishing between the capacity of parties in relation to each other outside of bankruptcy and that capacity following the filing of a bankruptcy petition.
cited Cited as authority (rule) In re: Christopher Justin Risher
Bankr. D. Minn. · 2026 · confidence medium
Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir. 1989).
discussed Cited as authority (rule) Banks v. Cotter Corporation
E.D. Mo. · 2020 · confidence medium
According to 11 U.S.C. § 362 (a)(1), Mallinckrodt’s voluntary bankruptcy petition stays “the commencement or continuation . . . of a judicial, administrative, or other action or proceeding against the debtor that was ... commenced before the commencement of the [bankruptcy petition].” The automatic stay is “fundamental to the reorganization process, and its scope is intended to be broad.” Small Bus. 3 Admin. v. Rinehart, 887 F.2d 165, 167 (8th Cir. 1989).
cited Cited as authority (rule) Olson v. Social Security Administration
D.N.D. · 2017 · confidence medium
SBA v. Rinehart, 887 F.2d 165, 169 (8th Cir. 1989).
discussed Cited as authority (rule) Pennsylvania State Employees' Retirement System v. Thomas (In re Thomas)
Bankr. W.D. Pa. · 2015 · confidence medium
See Stephenson v. Salisbury (In re Corland Corp.), 967 F.2d 1069, 1076 (5th Cir.l992)(right of setoff is stayed pending an orderly examination of the debtor’s and creditor’s rights); Small Business Administration v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989)(same). 1 A significant reason why the doctrines of setoff and recoupment can be confusing is because they both involve the netting of obligations to avoid “the absurdity of making A pay B when B owes A.” See e.g., Citizens Bank of Maryland v. Strumpf, 516 U.S. at 18 , 116 S.Ct. 286 (quoting Studley v. Boylston Nat.
discussed Cited as authority (rule) Richard Garden, Jr. v. Central Nebraska Housing Corp. (2×)
8th Cir. · 2013 · confidence medium
(In re Just Brakes Corporate Sys., Inc.), 108 F.3d 881, 884 (8th Cir. 1997) (finding that collecting foreclosure sale proceeds violates automatic stay); Knaus v. Concordia Lumber Co. (In re Knaus), 889 F.2d 773, 774-75 (8th Cir. 1989) (finding violation of automatic stay where creditor failed to turn over to the bankruptcy estate equipment belonging to debtor); Small Business Admin. v. Rinehart, 887 F.2d 165, 167-68 (8th Cir. 1989) (finding violation of automatic stay where creditor put a hold on funds the debtor was entitled to receive instead of turning the funds over to the bankruptcy estat…
cited Cited as authority (rule) In re Anthony
D. Neb. · 2012 · confidence medium
Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989); see also Raleigh, 530 U.S. at 25 , 120 S.Ct. 1951 .
cited Cited as authority (rule) In Re Moore
Bankr. W.D. Ark. · 2007 · confidence medium
Admin, v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989).
discussed Cited as authority (rule) FL Dept. of Revenue v. Gregg Takafumi Omine (2×)
11th Cir. · 2007 · confidence medium
Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989) (citations omitted).
cited Cited as authority (rule) United States v. Torres (In Re Torres)
1st Cir. · 2005 · confidence medium
Admin, v. Rinehart, 887 F.2d 165, 166 (8th Cir.1989).
discussed Cited as authority (rule) Catholic Order of Foresters v. U.S. Bancorp Piper Jaffray, Inc.
N.D. Iowa · 2004 · confidence medium
The Eighth Circuit Court of Appeals explained that, in a Chapter 11 proceeding, “‘[t]he automatic stay is fundamental to the reorganization process, and its scope is intended to be broad.’ ” In re Knaus, 889 F.2d 773, 774 (8th Cir.1989) (quoting SBA v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989), which in turn cites H.R.
cited Cited as authority (rule) Myrtle M. Montgomery v. Dennis Joslin Co. II
8th Cir. BAP · 2001 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir. 1989).
cited Cited as authority (rule) Montgomery v. Dennis Joslin Co. II Ex Rel. Seasons Mortgage Group Inc. (In Re Montgomery)
8th Cir. BAP · 2001 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989).
cited Cited as authority (rule) Ramette v. Al & Alma's Supper Club Corp. (In Re Bame)
Bankr. D. Minn. · 2000 · confidence medium
Small Business Administration v. Rinehart, 887 F.2d 165, 167-68 (8th Cir.1989).
cited Cited as authority (rule) In Re Passafiume
Bankr. W.D. Ky. · 1999 · confidence medium
Admin, v. Rinehart, 887 F.2d 165, 168-69 (8th Cir.1989).
cited Cited as authority (rule) Louisville & Jefferson County Metropolitan Sewer District v. Excel Engineering, Inc. (In Re Excel Engineering, Inc.)
Bankr. W.D. Ky. · 1998 · confidence medium
Soares, 107 F.3d at 975 ; Small Business Admin, v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989); Atkins, 176 B.R. at 1004 .
cited Cited as authority (rule) United States v. Ruff (In Re Rush-Hampton Industries, Inc.)
11th Cir. · 1996 · confidence medium
Small Business Admin, v. Rinehart, 887 F.2d 165, 166 (8th Cir.1989) (Chapter 11 bankruptcy proceeding).
discussed Cited as authority (rule) In Re Warwick
Bankr. W.D. Ark. · 1995 · confidence medium
The Eighth Circuit further noted that an administrative freeze is a violation of the stay when the creditor “holds ... payments the debtor is otherwise entitled to receive." Id. at 168 (emphasis added).
discussed Cited as authority (rule) In Re Tillery
Bankr. W.D. Ark. · 1995 · confidence medium
The Eighth Circuit further noted that an administrative freeze is a violation of the stay when the creditor "holds ... payments the debtor is otherwise entitled to receive." Id. at 168 (emphasis added).
cited Cited as authority (rule) In Re National Cattle Congress, Inc.
Bankr. D. Iowa · 1995 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989).
discussed Cited as authority (rule) Atkins v. Martinez (In Re Atkins)
Bankr. D. Minn. · 1994 · confidence medium
No. 595, 95th Cong. 1st Sess. 340 (1977), U.S. Code Cong. & Admin.News, pp. 5787, 6296, 6297; Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989). *1005 When the Debtor received a discharge from this Court, he then became protected by the provisions of the “discharge injunction” of 11 U.S.C. § 524 (a). 11 The entry of a discharge order terminates the automatic stay, in favor of the discharge injunction.
discussed Cited as authority (rule) In Re Cascade Roads, Inc., Debtor. United States of America v. Peter H. Arkison, Trustee
9th Cir. · 1994 · confidence medium
Credit Union v. Patterson (In re Patterson), 967 F.2d 505 , 509-13 (11th Cir.1992) (credit union violates the stay by "freezing” debtors' account pending determination of setoff rights) and SBA v. Rinehart, 887 F.2d 165, 167-69 (8th Cir.1989) (government agency violates the stay by "holding” payments owing to the debtor pending determination of setoff rights) and United States v. Reynolds, 764 F.2d 1004, 1006-07 (4th Cir.1985) (same) and Norton, 717 F.2d at 771-74 (same).
discussed Cited as authority (rule) Farm Credit Services v. Roth (In Re Roth)
Bankr. D.S.D. · 1994 · confidence medium
Courts have ruled that “the automatic stay is fundamental to the reorganization process, and its scope is intended to be broad.” Small Business Administration v. Rinehart, 887 F.2d 165, 166 (8th Cir.1989).
discussed Cited as authority (rule) Peaksolutions Corp. v. Ohio, Department of Transportation (In Re Peaksolutions Corp.)
Bankr. D. Minn. · 1994 · confidence medium
Accord, United States v. Mitchell, 463 U.S. 206, 212 , 103 S.Ct. 2961, 2965 , 77 L.Ed.2d 580 (1983); Small Business Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989) (as to sovereign immunity in general).
discussed Cited as authority (rule) Medicar Ambulance Co. v. Shalala (In Re Medicar Ambulance Co.)
Bankr. N.D. Cal. · 1994 · confidence medium
See University Medical Ctr., 973 F.2d at 1084 (suspension of payments to Part A Medicare provider violated the automatic stay); Tidewater Memorial Hosp., 106 B.R. at 882 (same); Memorial Hosp. of Iowa County, 82 B.R. at 484 (same); Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989) (SBA hold on debtor’s funds violated the stay even though the funds were being placed in a suspense account and not actually being applied to indebtedness); United States v. Reynolds, 764 F.2d 1004, 1007 (4th Cir.1985) (IRS retention of debtors’ tax refund was a setoff which violated'the automat…
cited Cited as authority (rule) In re Bunke
Bankr. D.S.D. · 1994 · confidence medium
“The automatic stay is fundamental to the reorganization process, and its scope is intended to be broad.” S.B.A. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989) (cites therein).
discussed Cited as authority (rule) Rhodes v. Internal Revenue Service (In Re Rhodes)
W.D. Ark. · 1993 · confidence medium
See United States v. McPeck, 910 F.2d 509, 512 (8th Cir.1990); Small Business Admin. v. Rinehart, 887 F.2d 165, 169-70 (8th Cir.1989); Davis v. I.R.S., 136 B.R. 414, 419 (E.D.Va.1992) (IRS’s immunity from money damages under § 362(h) not waived by provisions of 11 U.S.C. § 106 (c)), relying on, Hoffman v. Connecticut Dep’t of Income Maintenance, 492 U.S. 96 , 109 S.Ct. 2818 , 106 L.Ed.2d 76 (1989).
discussed Cited as authority (rule) In Re Samuel Derek Graham and Suzanne Genett Graham, Debtors. Samuel Derek Graham and Suzanne Genett Graham v. United States
10th Cir. · 1992 · confidence medium
United States v. Nordic Village, Inc., — U.S. -, -, 112 S.Ct. 1011, 1015 , 117 L.Ed.2d 181 (1992) (federal sovereign immunity); see Hoffman v. Connecticut Dep’t of Income Maintenance, 492 U.S. 96 , 109 S.Ct. 2818 , 106 L.Ed.2d 76 (1989) (state sovereign immunity); Small Business Admin. v. Rinehart, 887 F.2d 165,169-70 (8th Cir.1989) (applying Hoffman to federal government).
cited Cited as authority (rule) In Re Patterson
11th Cir. · 1992 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989). 19 The Code affords two concomitant rights to a creditor possessing a valid right of setoff.
cited Cited as authority (rule) B.F. Goodrich Employees Federal Credit Union v. Patterson (In re Patterson)
11th Cir. · 1992 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989).
cited Cited as authority (rule) In Re Gerth
Bankr. D.S.D. · 1991 · confidence medium
United States v. Rinehart, 88 B.R. 1014, 1016 (D.S.D.1988), aff’d in part, rev’d in part, 887 F.2d 165, 168 (8th Cir.1989).
cited Cited as authority (rule) In Re Husher
E.D.N.Y · 1991 · confidence medium
See, e.g., In re Pearson, 917 F.2d 1215, 1216 (9th Cir.1990); Small Business Administration v. Rinehart, 887 F.2d 165, 170 (8th Cir.1989).
discussed Cited as authority (rule) United States of America v. Inslaw, Inc. Inslaw, Inc. v. United States of America, Inslaw, Inc. v. United States of America, Inslaw, Inc. v. United States of America
D.C. Cir. · 1991 · confidence medium
See In re Charter Co., 913 F.2d 1575 , 1579 (11th Cir.1990); In re Satelco, Inc., 58 B.R. 781, 786 (Bankr.N.D.Tex.1986); In re Chick Smith Ford, Inc., 46 B.R. 515, 518 (Bankr.M.D.Fla.1985); In re FLR Co., 58 B.R. 632 (Bankr.W.D.Pa.1985); cf. In re Knaus, 889 F.2d 773, 775 (8th Cir.1989) (turnover of property admitted to belong to the debtor is required); SBA v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989) (same).
discussed Cited as authority (rule) In Re Olivas
Bankr. W.D. Tex. · 1991 · confidence medium
See, e.g., First Connecticut Small Business Investment Co., 118 B.R. 179 (Bankr.D.Conn.1990); In re Patterson, 125 B.R. 40 (Bankr.N.D.Ala.1990); Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir. 1989) ("we agree with those courts which have held that a governmental agency violates the automatic stay when it ‘holds’ or ‘freezes’ payments the debtor is otherwise entitled to receive.”). 6 .
discussed Cited as authority (rule) Murray v. United States, Department of Treasury (In Re Murray)
Bankr. N.D. Tex. · 1991 · confidence medium
Dept., 492 U.S. 96, 102 , 109 S.Ct. 2818, 2822-23 , 106 L.Ed.2d 76 (1989); In re Vasquez, Guerrero and Compton, 788 F.2d 130 (3rd Cir.1986); Small Business Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989); Matter of Neavear, 674 F.2d 1201 (7th Cir.1982); In re Iverson, 108 B.R. 272 (Bankr.D.Ore.1989); In re Town & Country Home Nursing Services, Inc., 112 B.R. 329 (9th Cir. BAP 1990); U.S. v. Inslaw, Inc., 113 B.R. 802, 810 (D.D.C.1989), rev’d on other grounds, 932 F.2d 1467 (D.C.Cir.1991); In re Price, 130 B.R. 259 (N.D.Ill.1991).
discussed Cited as authority (rule) United States v. Inslaw, Inc.
D.C. Cir. · 1991 · confidence medium
See In re Charter Co., 913 F.2d 1575 , 1579 (11th Cir.1990); In re Satelco, Inc., 58 B.R. 781, 786 (Bankr.N.D.Tex. 1986); In re Chick Smith Ford, Inc., 46 B.R. 515, 518 (Bankr.M.D.Fla.1985); In re FLR Co., 58 B.R. 632 (Bankr.W.D.Pa.1985); cf. In re Knaus, 889 F.2d 773, 775 (8th Cir.1989) (turnover of property admitted to belong to the debtor is required); SBA v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989) (same).
cited Cited as authority (rule) Hannan v. United States Ex Rel. Internal Revenue Service (In Re Wilwerding)
Bankr. S.D. Iowa · 1991 · confidence medium
Small Business Administration v. Rinehart, 887 F.2d 165, 170 (8th Cir.1989).
examined Cited as authority (rule) Price v. United States (In Re Price) (4×) also: Cited "see"
N.D. Ill. · 1991 · confidence medium
The Eighth Circuit’s rationale in Rinehart is representative: While the precise question in Hoffman was the extent to which the states’ eleventh amendment immunity had been abrogated under section 106(c), the Court’s opinion refers to the federal government as well, and its analysis is equally applicable to a waiver of sovereign immunity by the federal government. *265 887 F.2d at 170 (citation omitted). 5 In each of these cases, with the exception of Bluegrass, the courts specifically concluded that because § 106(c) did not effect a waiver of the United States’ sovereign immunity fro…
discussed Cited as authority (rule) Matter of Fernandez (2×) also: Cited "see, e.g."
Bankr. M.D. Fla. · 1991 · confidence medium
The Ninth Circuit, while acknowledging the difference between sovereign immunity waiver as to the states and as to the federal government, stated: While other courts have found this rationale sufficient, [Small Business Admin, v. Rinehart, 887 F.2d 165, 169-70 (8th Cir.1989)], we know that four is less than five.
cited Cited as authority (rule) In Re Nelson
Bankr. D.S.D. · 1991 · confidence medium
U.S. v. McPeck, 910 F.2d 509, 513 (8th Cir.1990); Small Business Admin. v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989).
examined Cited as authority (rule) In Re James C. Pearson, Ida J. Pearson, Debtors. James C. Pearson, Ida J. Pearson v. United States (3×)
9th Cir. · 1990 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 169-70 (8th Cir.1989). 4 While other courts have found this rationale sufficient, see, e.g., id. at 169-70 , we know that four is less than five.
discussed Cited as authority (rule) Patterson v. B.F. Goodrich Employees Federal Credit Union (In Re Patterson) (2×) also: Cited "see"
Bankr. N.D. Ala. · 1990 · confidence medium
Small Business Administration v. Rinehart at 168-69; Norton at 771 ; In re Julien Co., 116 B.R. 623 (Bkrtcy.W.D.Tenn.1990); In re Homan, 116 B.R. 595 (Bkrtcy.S.D.Ohio 1990); In re Cloverleaf Farmer’s Co-Op, 114 B.R. 1010 (Bkrtcy.D.S.D.1990); In re Sluss, 107 B.R. 599 (Bkrtcy.E.D.Tenn.1989); In re Communicall Cent., Inc., 106 B.R. 540 (Bkrtcy.N.D.Ill.1989); and In re Charter Co., 103 B.R. 302 (Bkrtcy.M.D.Fla.1989).
discussed Cited as authority (rule) Kathleen A. Laughlin, Trustee v. United States Internal Revenue Service, (Two Cases). Kathleen A. Laughlin v. United States Internal Revenue Service (2×)
8th Cir. · 1990 · confidence medium
Small Business Admin. v. Rinehart, 887 F.2d 165, 169-70 (8th Cir.1989).
discussed Cited as authority (rule) United States v. Cheryl L. McPeck A/K/A Cheri Bell D/B/A Gold Studio (2×) also: Cited "see"
8th Cir. · 1990 · confidence medium
We held in Rinehart that subsection (c) does not constitute a waiver of the federal government’s immunity from monetary sanctions for violation of the automatic stay. 887 F.2d at 170 (relying on plurality opinion in Hoffman v. Connecticut Dept. of Income Maintenance, — U.S.-, 109 S.Ct. 2818 , 106 L.Ed.2d 76 (1989)).
cited Cited as authority (rule) In Re Cloverleaf Farmer's Cooperative
Bankr. D.S.D. · 1990 · confidence medium
In re Rinehart, 887 F.2d 165, 166 (8th Cir.1989).
cited Cited "see" Bruce Comly French v. Bank One, Lima N.A. (In Re Rehab Project, Inc.)
Bankr. N.D. Ohio · 1999 · signal: see · confidence high
See Small Business Admin, v. Rinehart, 887 F.2d 165 (8th Cir.1989).
discussed Cited "see" In Re David Strumpf, Debtor. Citizens Bank of Maryland v. David Strumpf (2×)
4th Cir. · 1994 · signal: see · confidence high
See Small Business Admin. v. Rinehart, 887 F.2d 165, 169 (8th Cir.1989).
discussed Cited "see" Official Committee of Unsecured Creditors of Operation Open City v. New York State Department (In Re Operation Open City, Inc.)
S.D.N.Y. · 1994 · signal: see · confidence high
See Small Business Administration v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989); In re Ionosphere Clubs, Inc., 164 B.R. 839, 843-44 (Bankr.S.D.N.Y.1994); In re Blava In-Line, Inc., 133 B.R. 33, 36-37 (Bankr.S.D.N.Y.1991).
discussed Cited "see" Official Committee of Unsecured Creditors of Operation Open City, Inc. v. New York State Department of State (In Re Operation Open City, Inc.)
Bankr. S.D.N.Y. · 1992 · signal: see · confidence high
See Small Business Administration v. Rinehart, 887 F.2d 165, 168 (8th Cir.1989) (“a governmental agency violates the automatic stay when it ‘holds’ or ‘freezes’ payments the debtor is otherwise entitled to receive.”); United States v. *193 Reynolds, 764 F.2d 1004, 1006 (4th Cir. 1985) (the Code “preserve[s] a creditor’s right to any setoff he possesses but automatically stay[s] the exercise of that right unless the creditor obtains from the bankruptcy court relief from the automatic stay.”); United States v. Norton, 717 F.2d 767, 771 (3rd Cir.1983); (“[B]efore a setoff can …
Retrieving the full opinion text from the archive…
SMALL BUSINESS ADMINISTRATION, Appellant,
v.
Harold RINEHART; Marilyn Rinehart, Appellees
John Koppel, Washington, D.C., for appellant., Jonathan K. YanPatten, Vermillion, S.D., for appellees.
Lay, Bowman, Larson.
Cited by 91 opinions  |  Published
1 passage pin-cited by 1 case
Pinpoint authority: bottom 69%
Citer courts: W.D. Washington (1)
LARSON, Senior District Judge.

The United States of America, acting through the Small Business Administration (SBA), appeals from the district court’s judgment that the SBA violated the automatic stay provisions of the Bankruptcy Code when it “held” without notice a portion of plaintiffs’ farm program payments for an administrative setoff after plaintiffs had filed their bankruptcy petition. 88 B.R. 1014. We agree with the district court that SBA’s actions violated the automatic stay and affirm the court’s award of actual damages, costs, and attorney’s fees in favor of plaintiffs. In view of the Supreme Court’s decision in Hoffman v. Connecticut Department of Income Maintenance, — U.S. -, 109 S.Ct. 2818, 106 L.Ed.2d 76 (1989), however, we must reverse the district court’s award of punitive damages [1] on the ground that section 106(c) of the Bankruptcy Code does not authorize the award of such damages against the United States.

I.

For almost forty years, plaintiffs Harold and Marilyn Rinehart operated a farming and ranching business in South Dakota. In 1981, they received a loan from the SBA in[*167] the amount of $103,000 in exchange for a second mortgage on certain property and an executed promissory note. In January, 1982, the principal was increased to $171,-600, in exchange for a third mortgage on certain other property and an executed “modification” of the promissory note. Under the terms of the modified note, the Rineharts were to make twenty-four annual payments of $12,177 on January 1 of each year, commencing on January 1, 1983.

When plaintiffs failed to make the 1986 payment, the SBA declared a default and accelerated the debt. In January, 1987, the SBA notified plaintiffs that it would seek an administrative offset of its claim against the Department of Agriculture (USDA) crop payments which plaintiffs would otherwise receive. On February 5, SBA requested USDA to offset the crop payments. Five days later, on February 10, SBA advised USDA that its request was premature, because plaintiffs’ counsel had suggested they “try to work out a settlement.”

Despite SBA’s request that USDA not take action to offset the funds “until such time as this matter has been resolved,” on February 16 SBA received a letter from the USDA approving a setoff of $161,563.06 against farm program payments due or to become due to plaintiffs. Plaintiffs filed a Chapter 11 bankruptcy petition on February 27, 1987, and continued to operate their family farming and ranching business as debtors-in-possession. SBA again contacted USDA about postponing any administrative offset.

On March 5, USDA acknowledged by written memorandum SBA’s request to forego any offset pending notification by the SBA. On March 10, 1987, plaintiffs’ attorney sent letters to all creditors, including SBA, advising them of the bankruptcy filing and reminding them of the automatic stay provisions of the Bankruptcy Code. On March 18, 1987, SBA filed a proof of claim with the bankruptcy court in the amount of $163,250.24.

Despite the pending bankruptcy proceeding, on April 1, 1987, USDA issued a check to SBA as plaintiffs’ first installment of Agricultural Stabilization Service Commodity Credit Corporation (ASCS-CCC) farm program payments. [2] When SBA received the check on April 6, it decided to “hold” the money. SBA gave no notice to plaintiffs or to their counsel that it had received or was holding the ASCS-CCC check. When plaintiffs did not receive their expected farm program payment, after preliminary investigation, they filed a motion for an order to show cause against the Farmers Home Administration (FmHA) on May 8,1987. FmHA replied that it had not requested the offset, but that the SBA may have done so.

On May 11, SBA’s attorney wrote a memorandum to SBA’s “collateral cashier” directing that the check from USDA should be held “pending resolution of the [bankruptcy] litigation and advice of counsel.” On May 15, the SBA filed a motion for relief from stay to offset the ASCS-CCC payment. Shortly thereafter, plaintiffs filed an amended motion for an order to show cause against the SBA. A hearing was held on June 1, 1987, and the Bankruptcy Court issued its memorandum decision finding the SBA had violated the automatic stay on July 24, 1987. An order confirming the memorandum decision was entered September 11, 1987.

It was only after this order that a check representing the first ASCS-CCC program payment was finally delivered to plaintiffs. On appeal to the district court, the bankruptcy court’s finding that the SBA had willfully violated the stay was affirmed. This appeal followed.

II.

SBA argues on appeal that its actions did not violate the automatic stay. We cannot agree. Section 362 of the Bankruptcy Code provides that a filing of a voluntary petition in bankruptcy results in an automatic stay of most actions by credi[*168] tors to satisfy their claims against a debt- or, including (1) “any act ... to exercise control over property of the estate,” and (2) “the setoff of any debt owing to the debt- or.” 11 U.S.C. § 362(a)(3) & (7). The automatic stay is fundamental to the reorganization process, and its scope is intended to be broad. See H.R.Rep. No. 595, 95th Cong., 1st Sess. 340 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 5963, 6296-97; United States v. Norton, 717 F.2d 767, 770-71 (3d Cir.1983).

A primary purpose of the automatic stay provision is to afford debtors in Chapter 11 reorganizations an opportunity to continue their businesses with their available assets. H.R.Rep. No. 595, 95th Cong., 1st Sess. 183 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News at 6144; In re Archer, 34 B.R. 28, 29-30 (Bankr.N.D.Tex.1983).

The farm program payments held by the SBA in this case represented deficiency corn crop payments for the 1986 crop year. Like many farmers, plaintiffs needed the farm program funds to meet expenses for fuel, fertilizer, and seed at the beginning of the 1987 crop season. See In re Hazelton, 85 B.R. 400, 404-05 (Bankr.E.D.Mich.), rev’d on other grounds, 96 B.R. 111 (E.D.Mich.1988). SBA unilaterally denied the plaintiffs as debtors-in-possession the use of these funds without even giving them notice that SBA had obtained the funds until after plaintiffs had filed an order to show cause with the bankruptcy court.

SBA now claims its actions were authorized by section 553(a) of the Code, which preserves the right of a creditor to offset a mutual debt owed by the creditor against a claim of the creditor against the debtor. Section 553 is, however, by its terms subject to the automatic stay provisions of section 362. [3] SBA argues its administrative “hold” on the plaintiffs’ funds does not violate the automatic stay, because it did not actually apply the check to the plaintiffs’ debt.

This argument is inconsistent with SBA’s own characterization of its actions as an administrative offset. SBA requested USDA to “setoff” the farm program payments, and USDA attempted to do just that. SBA cites no statutory or regulatory authority for its alleged “administrative freeze,” and has not denied that it sought to act pursuant to its offset powers. See 31 U.S.C. § 3716; 13 C.F.R. § 140.5.

Regardless of whether SBA’s “hold” is an “offset” under section 362(a)(7) of the automatic stay provisions, however, it surely is an act “to exercise control over the property of the estate,” which is forbidden by section 362(a)(3). We agree with those courts which have held that a governmental agency violates the automatic stay when it “holds” or “freezes” payments the debtor is otherwise entitled to receive. See United States v. Reynolds, 764 F.2d 1004, 1007 (4th Cir.1985); United States v. Norton, 717 F.2d at 773; In re Woloschak Farms, 74 B.R. 261, 264 (Bankr.N.D.Ohio 1987). See also In re Wildcat Construction Co., 57 B.R. 981, 984-85 (Bankr.D.Vt.1986).

While some courts have held that a bank which places an administrative freeze on a debtor’s account does not violate the automatic stay, see, e.g., In re Air Atlanta, 74 B.R. 426, 427 (Bankr.N.D.Ga.), aff'd, 81 B.R. 724 (N.D.Ga.1987), our holding with respect to the SBA’s actions in this case is consistent not only with the express language of the Code, but also with the policy behind Chapter 11 proceedings.

From the perspective of a debtor in reorganization, a “freeze” or “hold” is the same as a setoff in that it denies the debtor access to funds which may be critical to the debtor’s survival. See Note, Freeze and Recoupment: Methods For Circumventing the Automatic Stay? 5 Bankr.Dev.J. 85, 102 (1987). The SBA’s position that it[*169] may hold” farm program payments to preserve its right of setoff denies to farmer-debtors the funds they need to reorganize their farming operations without any supervision or oversight by the bankruptcy court. Cf. Norton, 717 F.2d at 773-74. We find no indication in the Bankruptcy Code that Congress intended such a result.

The SBA, as any other creditor, is not without recourse to protect its interests. It does not even face the potential dilemma of a bank under section 542(c) of the Code, see generally Note, supra, at 92, 98-99, but may simply request relief from the automatic stay. See In re Lundell Farms, 86 B.R. 582, 591-93 (Bankr.W.D.Wis.1988); In re Hazelton, 85 B.R. at 402.

Giving effect to the automatic stay thus does not defeat the SBA’s right of setoff, it merely stays its enforcement, as Congress intended, pending an orderly examination of the debtor’s and the creditor’s rights. See H.R.Rep. No. 595, 95th Cong., 1st Sess. 342 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News at 6298; Reynolds, 764 F.2d at 1006; In re Wildcat Construction Co., 57 B.R. at 983. Whether the stay should be lifted in each case lies in the sound discretion of the bankruptcy court.

Because SBA exercised control over the funds at issue from April 6, 1987, until after the bankruptcy court’s order on September 11, 1987, without seeking relief from the automatic stay or even informing plaintiffs that it had the funds until after an order to show cause was filed, we affirm the district court’s judgment that SBA violated provisions of the automatic stay in this case.

III.

Although SBA has not challenged the district court’s award of compensatory damages, attorney’s fees, and costs, it has appealed the district court’s award of punitive damages. Section 362(h) of the Code provides that an individual injured by any willful violation of the automatic stay “shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.” 11 U.S.C. § 362(h).

SBA argues the facts of this case do not present “appropriate circumstances” justifying a punitive damage award. See United States v. Ketelsen, 880 F.2d 990, 993 (8th Cir.1989). SBA further contends that, in any event, such an award is barred by the government’s sovereign immunity. The district court affirmed the bankruptcy court’s award of punitive damages based on the SBA’s willful violation of the automatic stay, but was not presented with the government’s sovereign immunity argument.

A waiver of sovereign immunity is a prerequisite for jurisdiction. United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983). The only possible waiver of the government’s sovereign immunity which would confer jurisdiction to award the punitive damages at issue in this ease is contained in section 106(c) of the Bankruptcy Code. [4]

Subsequent to the submission of this appeal, the Supreme Court held in Hoffman v. Connecticut Department of Income Maintenance, — U.S. -, 109 S.Ct. 2818, 106 L.Ed.2d 76 (1989), that section 106(c) does not authorize monetary recovery, but applies only to declaratory and injunctive relief, binding governmental units to issues determined by the bankruptcy court even when those units did not appear before the court. Id. at 2823.[*170] While the precise question in Hoffman was the extent to which the states’ eleventh amendment immunity had been abrogated under section 106(c), the Court’s opinion refers to the federal government as well, and its analysis is equally applicable to a waiver of sovereign immunity by the federal government. See id.

Because the Court has interpreted section 106(c) so as not to waive the government’s sovereign immunity with respect to monetary awards, we have no alternative but to reverse the district court’s punitive damages award in this case.

IV.

For all of the foregoing reasons, we affirm the district court’s judgment that SBA violated provisions of the automatic stay by “holding” the farm program payment which otherwise should have gone to plaintiffs as debtors-in-possession for the operation of their farming and ranching business. We reverse the court’s award of punitive damages as barred by the government’s sovereign immunity, however, based on the Supreme Court’s narrow interpretation of section 106(c) of the Bankruptcy Code in the Hoffman case.

1

. SBA did not appeal the district court’s award of actual damages, costs, or attorney’s fees. It appealed only the question of whether punitive damages were properly awarded.

2

. The affidavit of the ASCS County Executive Director who issued the check states that the USDA’s March 5, 1987, memorandum “was missed” at the time the check was issued, and that if he had seen the memorandum "no check would have been issued to SBA.”

3

. Section 553(a) provides:

Except as otherwise provided in this section and in sections 362 and 363 ... this title does not affect any right of a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the commencement of the case ... against a claim of such creditor that arose before the commencement of the case.

11 U.S.C. § 553(a).

4

. Section 106 provides:

(a) A governmental unit is deemed to have waived sovereign immunity with respect to any claim against such governmental unit that is property of the estate and that arose out of the same transaction or occurrence out of which such governmental unit’s claim arose.
(b) There shall be offset against an allowed claim or interest of a governmental unit any claim against such governmental unit that is property of the estate.
(c)Except as provided in subsections (a) and (b) of this section and notwithstanding any assertion of sovereign immunity—
(1) a provision of this title that contains "creditor,” "entity,” or “governmental unit" applies to governmental units; and
(2) a determination by the court of an issue arising under such a provision binds governmental units.

11 U.S.C. § 106.