RKJ Hotel Management, LLC v. RSS WFCM2020-C55-MI RHM, LLC, 2:22-cv-01022

RKJ Hotel Management (Appellant) borrowed $20,500,000 for the Delta Hotel Detroit Metro Airport; loan was assigned to RSS WFCM2020-C55 – MI RHM, LLC (Appellee RSS).
Appellant closed the hotel during the COVID-19 pandemic; RSS sought appointment of a receiver in Michigan state court, which was granted but the receiver did not take possession.
Appellant filed Chapter 11 in the District of Nevada; RSS obtained relief from the automatic stay and later opposed confirmation of Appellant’s Second Amended Plan of Reorganization.
After four days of evidentiary hearings, the Bankruptcy Court denied confirmation of the Plan and entered RSS’s proposed order over Appellant’s objections.
Appellant appealed the Bankruptcy Court’s order and moved in the district court for a stay pending appeal; the district court considered Wymer factors and related authority.
The district court denied the emergency motion for a stay, finding Appellant failed to show likelihood of success on the merits and had waived certain arguments.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a stay pending appeal should issue under Wymer (likelihood of success is threshold)	RKJ: meets Wymer factors, likely to succeed on appeal	RSS: RKJ cannot show likelihood of success or irreparable harm	Denied — RKJ failed to show likelihood of success, so stay not warranted
Whether Bankruptcy Court erred in classifying claims / considering collectability under §1122	RKJ: Bankruptcy Court misapplied Johnston and Loop 76 and improperly considered collectability	RSS: Johnston gives broad discretion; collectability is relevant and Court acted within discretion	Denied — district court found no clear error and Johnston supports discretion; Loop 76 dicta does not forbid considering collectability
Whether RKJ proved a meaningful secondary source of recovery (guarantor Katofsky)	RKJ: Katofsky is solvent and guaranty provides collectability	RSS: evidence (financial statement, testimony) is conclusory and insufficient to show collectability	Denied — Court found Appellant did not meet burden; evidence was conclusory and did not establish collectability
Whether RKJ may raise valuation and §105(b) arguments on appeal	RKJ: may challenge valuation and bankruptcy court’s handling of receivership issues	RSS: RKJ waived issues by not raising them below and/or missed appellate deadlines; §105(b) was inapplicable here	Denied — Court held arguments waived; additionally §105(b) inapplicable because receiver was appointed by Michigan court

In re Wymer, 5 B.R. 802 (B.A.P. 9th Cir. 1980) (sets stay-pending-appeal factors in bankruptcy context)
Schwartz v. Covington, 341 F.2d 537 (9th Cir. 1965) (earlier authority referenced for stay factors)
Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015) (likelihood of success is the most important Wymer factor)
Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (extraordinary-relief standard for injunction-like relief)
In re Crystal Properties, Ltd., L.P., 268 F.3d 743 (9th Cir. 2001) (standards of appellate review of bankruptcy court decisions)
Fireman's Fund Ins. Co. v. Plant Insulation Co. (In re Plant Insulation Co.), 734 F.3d 900 (9th Cir. 2013) (confirmation of a plan is a core proceeding; factual findings reviewed for clear error)
In re Johnston, 21 F.3d 323 (9th Cir. 1994) (bankruptcy court has broad discretion to classify claims)
In re Enewally, 368 F.3d 1165 (9th Cir. 2004) (issues not raised below are waived on appeal)