508 B.R. 633
E.D. Va.2014Background
- BDC Capital moves for a stay pending appeal of the Bankruptcy Court's confirmation of the Fifth Amended Reorganization Plan in Thoburn Limited Partnership and John M. Thoburn Chapter 11 cases.
- The Plan, based on a March 7, 2013 Purchase and Sale Agreement with Pulte Home Corporation, contemplates development and refinancing of the Assemblage near Dulles Toll Road with a potential sale to Pulte for about $52 million.
- The Plan provides that TD Bank and First Virginia Community Bank receive direct payments, with $6.66 million to HMI and $3.59 million to BDC, while payments are held pending final determinations of amounts owed to each bank.
- BDC’s voting rights for the Plan were challenged, with the Bankruptcy Court ultimately determining that TD Bank and First Virginia Community Bank, and HM Investments, LC, had voting rights because BDC’s creditors hold the collateral and rights to payment upon default.
- Following Plan confirmation on December 2, 2013, BDC appealed and sought a stay, which the Bankruptcy Court denied for four reasons, and the District Court later convened to hear arguments on the stay motion.
- The district court denies the stay, holding that BDC failed to satisfy the four-factor standard for stay pending appeal (likelihood of success on the merits, irreparable harm, balance of equities, public interest).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BDC should be granted a stay pending appeal | BDC asserts likelihood of merit and irreparable harm if stayed | Thoburn lenders’ rights to vote and plan viability outweigh stay | Stay denied; four-factor standard not met |
Key Cases Cited
- The Real Truth About Obama, Inc. v. F.E.C., 575 F.3d 342 (4th Cir. 2009) (stay standard for preliminary injunction; four-factor test)
- Cont’l Sec. Corp. v. Shenandoah Nursing Home P’ship, 188 B.R. 205 (W.D. Va. 1995) (four-factor stay standard; burden on movant)
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (U.S. 2008) (four-factor test for preliminary injunction)