MRC Permian Company/Point Energy Partners Permian LLC TJ Bar, LLC Tubb Memorial, an Oregon Limited Partnership PlainsCapital Bank, Trustee for the Debora Jackson Revocable Trust Bank of America N.A., Trustee for the Janelle Jackson Marital Trust Part M2, Janelle Jackson Marital Trust Part M1, and Family Credit Shelter Trust Part B Vortus Investment Advisors, LLC John Sabia And Bryan Moody v. Point Energy Partners Permian LLC TJ Bar, LLC Tubb Memorial, an Oregon Limited Partnership PlainsCapital Bank, Trustee for the Debora Jackson Revocable Trust Bank of America N.A., Trustee for the Janelle Jackson Marital Trust Part M2, Janelle Jackson Marital Trust Part M1, and Family Credit Shelter Trust Part B Vortus Investment Advisors, LLC John Sabia And Bryan Moody/MRC Permian Company, 624 S.W.3d 643

Background

On March 15, 2021 the Court issued a majority opinion, a concurring/dissenting opinion, and a judgment in Cause No. 08-19-00124-CV.
Holland Acquisitions, Inc. had filed a Chapter 7 petition in Delaware on February 4, 2021; Holland gave appellate notice of the bankruptcy on March 18, 2021.
Bankruptcy law imposes an automatic stay on proceedings against a debtor, and actions taken in violation of the stay are void.
Because the bankruptcy petition predated the Court’s March 15 opinion, the Court withdrew the March 15 opinions and judgment as void under the automatic stay.
Point Energy moved to sever Holland from the appeal under Tex. R. App. P. 8.3; the Court granted severance, created a new cause number for Holland, and reinstated the appeal as to the non‑bankrupt parties.
The Court ruled that filings made while the proceeding was suspended are deemed filed on the day of reinstatement and are not ineffective.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Effect of bankruptcy petition on the pending appeal	Non‑bankrupt parties: Holland’s bankruptcy should not stay proceedings against others; appeal may continue as to non‑debtors	Holland (debtor): Bankruptcy filing triggers automatic stay of the appellate proceeding against the debtor	The automatic stay applied to Holland and voided actions as to the debtor; but it does not operate against non‑debtors
Validity of opinions/judgment issued after bankruptcy filing	Non‑bankrupt parties: Opinions should remain as issued	Holland: Any post‑petition judicial actions against debtor are void under the stay	The Court withdrew its March 15 opinions and judgment because they were issued after Holland’s petition and thus affected the debtor subject to the stay
Severance of appeal under Tex. R. App. P. 8.3	Non‑bankrupt parties: Sever the appeal as to Holland so the appeal may proceed against other parties	Holland: (implicit) stay should protect Holland’s interests; severance may be premature	The Court granted severance under Rule 8.3, created a new cause for Holland, and reinstated the appeal as to the remaining parties
Treatment of filings made during suspension	Non‑bankrupt parties: Filings made during stay should be effective once reinstated	Holland: (implicit) filings during suspension are governed by the stay	The Court held filings made while the appeal was suspended are deemed filed on the day of reinstatement and are not ineffective

Key Cases Cited

Kalb v. Feuerstein, 308 U.S. 433 (1940) (actions taken in violation of the automatic bankruptcy stay are void)
Marcus, Stowell & Beye Gov’t Sec., Inc. v. Jefferson Inv. Corp., 797 F.2d 227 (5th Cir. 1986) (automatic stay applies where debtor was a defendant below and the appeal continues against the debtor)
In re Southwestern Bell Tel. Co., 35 S.W.3d 602 (Tex. 2000) (when a defendant files bankruptcy, the stay applies only to the debtor and not to non‑debtors)
Lisanti v. Dixon, 147 S.W.3d 638 (Tex. App.—Dallas 2004) (non‑bankrupt parties cannot benefit from a debtor’s automatic stay)
Howell v. Thompson, 839 S.W.2d 92 (Tex. 1992) (court may reissue withdrawn opinions after the stay is lifted)