482 B.R. 879
Bankr. E.D. Va.2012Background
- Foreign Representative moves under Chapter 15 to enforce automatic stay against Altis’s California suit challenging Qimonda and Qimonda Licensing.
- Court holds pre-petition breaches of the Joint Development Agreements (JDAs) and/or pre-petition confidentiality breaches are stayed and enjoined.
- March 11 sale order not a free-and-clear sale; Altis not an Objecting Party, but sale protections exist; Altis not properly noticed.
- Altis’s request to declare sale to Adesto void is an impermissible collateral attack; Rule 9024 provides a potential remedy to challenge the sale.
- Court declines to extend the stay to Qimonda Licensing; grants relief from stay for post-petition breaches by Altis only to liability/ damages, with collection staying in U.S. assets; separate orders forthcoming.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the automatic stay apply to Altis’s pre-petition breaches claim? | Altis | Qimonda | Yes; pre-petition breaches stay applicable and enjoined |
| Is Altis’s request to void the Adesto sale an impermissible collateral attack on the March 11 sale order? | Altis | Qimonda | Yes; collateral attack enjoined; Rule 9024 available |
| Is Altis improperly seeking to exercise control over property of the debtor via injunction against IP sales/licensing? | Altis | Qimonda | Yes; enjoined under 11 U.S.C. 362(a)(3) or 1521(a)(1) |
| Should the stay be extended to Qimonda Licensing and under what standard? | Foreign Representative | Altis / Qimonda Licensing | No; Barton doctrine not implicated; public policy favors non-extension; or, in part, stay denied for non-debtor |
| What relief is granted under Altis’s Motion for Relief from the Automatic Stay for post-petition breaches? | Altis | Qimonda | Relief granted for liability/damages on post-petition breaches; collection stayed for assets in U.S. under 1521(a)(2) |
Key Cases Cited
- Grady v. A.H. Robins Co., 839 F.2d 198 (4th Cir. 1988) (automatic stay protective purpose; broad scope of 'claim')
- In re Bellini Imports, Ltd., 944 F.2d 199 (4th Cir. 1991) (post-petition breaches require stay relief to enforce against estate)
- Spartan Mills v. Bank of Am. Ill., 112 F.3d 1251 (4th Cir. 1997) (collateral attack on sale finality; limited avenues for relief)
- In re Vitro, SAB, De C.V., 455 B.R. 571 (Bankr. N.D. Tex. 2011) (public policy against extending stay to non-debtors; unusual circumstances)
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (establishes the four-factor test for preliminary injunctions)
- In re Old Carco LLC, 424 B.R. 633 (Bankr. S.D.N.Y. 2010) (rejection creates pre-petition claims; rejection economics of claims under 365(g))