National Brokers of America, Inc., 663 B.R. 661

National Brokers of America, Inc. (NBOA), a health insurance brokerage, was co-owned by Redmond and Jordan, whose partnership soured and led to litigation.
After Jordan was forced out, state court litigation resulted in a $13 million judgment for Jordan; Redmond then formed Bene Market, LLC, allegedly transferring NBOA’s business and assets to it.
NBOA filed for Chapter 7 bankruptcy in 2019; a trustee was appointed to administer the estate. The bankruptcy stay was extended by court order.
Key litigation after bankruptcy included: (1) the original state action (claims and counterclaims between Redmond/NBOA and Jordan) resulted in judgment erroneously including the debtor (NBOA); (2) a second state suit by Jordan against Redmond, Bene, and others, but not NBOA, seeking to pierce Bene’s veil and recover assets.
The Trustee settled separate fraudulent transfer claims with Redmond/Bene for $200,000, mutually releasing all parties from future estate liability.
NBOA (by Redmond) moved in bankruptcy court to enforce the automatic stay, seeking to void the amended state judgment, extend the stay to Redmond/Bene, and enjoin the second state suit, alleging violations of the stay.

Issue	NBOA's Argument	Jordan's Argument	Held
Was entry of the amended state court judgment against NBOA a stay violation?	Yes; Jordan violated the stay by seeking/amending judgment against the Debtor.	Ministerial error; agreed a correction is warranted but asks for retroactive stay annulment.	Yes, the stay was violated; judgment as to NBOA is void; retroactive annulment denied.
Should the automatic stay be extended to Redmond and Bene?	Yes, their finances are intertwined with NBOA.	No, claims are against Redmond/Bene personally; stay applies only to debtor or under rare circumstances.	No; NBOA lacks standing and no unusual circumstances justify stay extension.
Does the Second State Court Action violate the stay?	Yes; it seeks assets belonging to the bankruptcy estate.	No; action only addresses Redmond/Bene’s assets post-waiver/settlement; Debtor has no interest.	No; NBOA lacks standing and claims are not property of the estate per trustee's settlement.
Are attorney’s fees/damages available for alleged stay violations?	Yes; seeks fees for defending alleged violations.	No, fees not the Debtor’s responsibility; rates unreasonable.	No; no damages awarded as no compensable violation found, and Redmond can't recover for debtor's stay.

Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194 (3d Cir. 1991) (defines scope and purpose of automatic stay)
A.H. Robins Co. v. Piccinin, 788 F.2d 994 (4th Cir. 1986) (extraordinary circumstances required to extend stay to non-debtors)
In re Myers, 491 F.3d 120 (3d Cir. 2007) (bankruptcy courts may annul the stay retroactively)
In re McCartney, 106 F.3d 506 (3d Cir. 1997) (stay may be extended only in unusual circumstances where suit against non-debtor impacts debtor’s estate)