Allen v. Fitzgerald, 590 B.R. 352

The bankruptcy court revoked practice privileges for five years for Law Solutions Chicago, UpRight Law, Kevin Chern, and Jason Allen (the "Privilege Revocation") after a four-day trial, finding misconduct including unauthorized practice of law, high-pressure sales, and abusive litigation tactics (In re Williams, Bankr. W.D. Va.).
Petitioners appealed the bankruptcy court Order to the district court and sought stays at both the bankruptcy and district-court levels; a temporary emergency stay was issued by the district court pending consideration but Petitioners later moved for a further stay.
The Trustee defended the Privilege Revocation as an exercise of the bankruptcy court’s inherent authority to regulate who may practice before it; Petitioners argued the order functioned as an injunction and thus required injunctive-law analysis.
The district court applied the four Hilton/Nken stay factors (likelihood of success, irreparable harm, harm to others, public interest), emphasizing the first two as most critical.
The district court concluded the Privilege Revocation is not an injunction but an exercise of the court’s inherent power to regulate its bar and found Petitioners failed to show a strong likelihood of success on the merits or irreparable harm.
Because Petitioners failed the first two Hilton factors, the district court denied the Motion to Stay.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Proper characterization of the Privilege Revocation	Privilege Revocation operates as an injunction and thus required injunctive-relief analysis	It is an exercise of the bankruptcy court’s inherent authority to regulate who may appear before it	Court: Not an injunction; it is inherent-authority regulation of bar privileges
Likelihood of success on appeal	Bankruptcy court misapplied law for injunctive relief; therefore appeal likely to succeed	Bankruptcy court’s factual findings and inherent-authority framework were correct	Court: Petitioners failed to show a strong likelihood of success on the merits
Irreparable harm from enforcement pending appeal	Loss of fees (up to $450,000) and reputational/business injury constitute irreparable harm	Monetary loss and reputational injury are either compensable or curable on appeal	Court: Monetary loss not irreparable; reputational harm insufficient / curable; factor fails
Appropriateness of stay pending appeal	Stay necessary to prevent immediate, irreversible business and reputational injury	Public and judicial interest favors prompt enforcement of final orders and deference to bankruptcy court	Court: Stay denied because first two Hilton factors not met

Nken v. Holder, 556 U.S. 418 (U.S. 2009) (stay-of-removal standard; Hilton factors and stays are discretionary)
Hilton v. Braunskill, 481 U.S. 770 (U.S. 1987) (four-factor test for stays pending appeal)
In re Evans, 801 F.2d 703 (4th Cir. 1986) (federal courts’ inherent authority to disbar/suspend attorneys)
In re Bagdade, 334 F.3d 568 (7th Cir. 2003) (sanctions against unauthorized practitioner; limited references to injunction-like relief)
United States v. Johnson, 327 F.3d 554 (7th Cir. 2003) (court authority to regulate/discipline nonmembers engaging in unauthorized practice)
Enmon v. Prospect Capital Corp., 675 F.3d 138 (2d Cir. 2012) (sanctioning law firms for partner misconduct; firms may be sanctioned)
Newby v. Enron Corp., 302 F.3d 295 (5th Cir. 2002) (upholding injunction requiring permission before filing certain related suits)
In re Stewart, 647 F.3d 553 (5th Cir. 2011) (limits on broad injunctions beyond the case’s adversarial record)
Sampson v. Murray, 415 U.S. 61 (U.S. 1974) (reputational harms may be remedied on appeal and thus not necessarily irreparable)