Answer:
Your contract is with the drawer, not the payee, of the check. If you refuse to cash the item the drawer can say your dishonor was "wrongful" and claim damages, if any damages were caused. If the drawer is simply curious then you're going to have a difficult explanation to offer as you may be telling them something about the payee they did not know.
Somewhat reluctantly, I will point out that the declaration of bankruptcy is a federally protected right. Your institution is attempting to punish the payee for exercising that right...
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