MEMORANDUM OPINION AND DECISION
FACTS
On February 18, 1982, involuntary petitions under Chapter 11 of the Code were filed against the debtor, Golden Plan of California, Inc. and its three related entities, State Loan Servicing, Inc., Financial Securities Agency, Inc., and Mid-Central California, Inc. Thereafter, on April 9, 1982 the court entered an order for relief, appointed Melvyn J. Coben as trustee, and ordered the cases consolidated for administrative purposes. In an order filed on June 9, 1982, the court found that Certified TD Service, Inc. was an alter-ego of the debtor.
On December 1, 1982, the California Franchise Tax . Board (Board) suspended
At about the same time the trustee learned about the suspensions, William L. Lebrun through his attorney, William E. Chisham, filed articles of incorporation for the three suspended entities on July 20, 1983. Lebrun formerly did business with Frank Monaco, an insider of the debtor, and Lebrun currently owns a foreclosure company. Shortly after filing the articles, Lebrun telephoned the trustee’s office and indicated that he claimed ownership of the three names and that he intended to use the three corporations аnd their names to assist his own client-investors with foreclosures involving property of the estate. Lebrun also telephoned Byron Damiani of Pacific Trust Deed Services, who has been approved by this court’s order of April 11, 1983 to process foreclosures for the trustee. According to Damiani, Lebrun warned him not to conduct any further foreclosures because of his ownership of the three corporations.
Upon the ex parte application of the trustee this court issued a temporary restraining order on August 12, 1983. And, on August 22,1983, the court signed a preliminary injunction enjoining William and Pаtti Lebrun, William E. Chisham, Peter H. No-rell, Trust Deed Agency, and M.G. Mitchel-tree and their agents and employees from using the name of the debtor, its related entities, and alter-egos. After the most recent hearing, thе court must decide whether or not a permanent injunction should be granted.
DISCUSSION
Although not raised by the parties, the court’s analysis of this dispute begins with the issue whether or not the debtor’s corporate name is property of the estate.
11 U.S.C. § 541(a)(1) states that the “estate is comprised of ... all legal or equitable interests of the debtor in property as of the commencement of the case.” This definition is broad and includes both tangible and intangible property. H.R.Rep. No. 595, 95th Cong., 1st Sess. 367-68 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787. The definition of property of the estate is much broader under the Code than under the Aсt.
See United States v. Whiting Pools,
Inc., —U.S. —, —,
At issue here is the corporate name of the debtor. A corporate name is an interest defined by state law. California law provides that the articles of incorporation must set forth a corpоrate name and that the Secretary of State shall not file articles which contain a name which is likely to mislead the public. Cal.Corp.Code §§ 201(b), 202(a). A business may acquire an exclusive, proрrietary right to the use of a corporate name.
Hooper v. Stone,
Under § 70(a)(2) of the Act, tradenames were considered property of the estate.
United States Ozone Co. v. United States Ozone Co. of America,
11 U.S.C. § 362(a)(1) provides,
a petition filed ... operates as a stay, applicable to all entities, of—(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the сommencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title.
The scope of the automatic stay is broad and applies to both formal and informal proceedings against the debtor. 2
Collier on Bankr.
¶ 362.04 at 362-27. Any action taken in violation of the automatic stay is void.
Kalb
v.
Feuerstein,
In the present cаse, the state Franchise Tax Board acted pursuant to Cal.Rev. & Tax Code § 23301 1 to suspend the corporate powers of Golden Plan of California, Inc., Certified TD Service, Inc., and Financial Securities Agency, Inc. The court finds that the Board’s actions do fall within the broad scope of the automatic stay and therefore, have no effect. 2 Since the corporate powers wеre never suspended, Le-brun’s filing of the articles of incorporation for the three entities similarly had no effect.
Alternate grounds also exist for the granting of the permanent injunction.
11 U.S.C. § 105(a) states, “[t]he bankruptcy court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” Section 105(a) gives the court authority to enjoin acts that interfere with the administration of the estate. 2
Collier on Bankr.
¶ 105.02 at 105-3.
See also Grover v. Palmer,
The evidence in this case indicates that Lebrun’s use of the corporate name of the debtor would interfere with the administration of the estate. The сourt appointed foreclosure company has indicated that if Lebrun is permitted to use the name it will not process any further foreclosures for the trustee due to the fear of pоtential liability. Lebrun’s use of the corporate name would have a chilling effect on anyone appointed by the court to work for the trustee and with other title insurance and foreclosure companies that the trustee must deal with. Based upon the evidence, the court finds that Lebrun filed the articles of incorpora
The requirements for a permanent injunction have also been met here. The Golden Plan bankruptcy involves thousands of investors and bоrrowers and a substantial portion of the estate’s assets is comprised of the trustee’s beneficial interest in second trust deeds. The trustee must continually bring foreclosure proceedings against defaulting borrowers. The evidence indicates that confusion has already occurred. A note and deed of trust which were intended for the trustee were delivered instead to Chisham, Lebrun’s attorney. In yet another incident a summons and notice of trial were addressed incorrectly to Chisham.
Due to the number of people involved in this bankruptcy, its complexity, and the length of time this ease is еxpected to be under the court’s jurisdiction, a very real potential for confusion and error exists. Irreparable injury will occur to the administration of the estate if Lebrun is permitted to use thе debtor’s corporate name. The legal remedies available to the trustee are also inadequate. If the trustee is required to continually bring actions against Lebrun, the trustee will be diverted from administering this estate. In addition, the trustee may be required to pursue a series of suits since the potential harm to the estate will not be an isolated incident.
CONCLUSION '
The court finds that the corporаte name is property of the estate and that neither the suspension nor the subsequent reincorporation by Lebrun had any effect. Since the requirements for a permanent injunction havе been met and to safeguard the administration of the estate, the court will issue a permanent injunction.
This decision shall constitute findings of fact and conclusions of law. Counsel for the trustee shall рrepare and submit an order consistent with this decision.
Notes
. Cal.Rev. & Tax Code § 23301 provides in part:
the corporate powers, rights and privileges of a domestic taxpayer, may be suspended, ... if any of the following conditions ocсur: (a) If any tax, penalty or interest, or any portion thereof ... if not paid ... or (b) If any tax, penalty or interest, or any portion thereof, due and payable upon notice and demand from thе Franchise Tax Board ... is not paid.
. The Board’s actions are not excepted by § 362(b)(4) of the automatic stay. That section states, “[t]he filing of a petition ... does not operate as a stаy—(4) under subsection (a)(1) of this section of the commencement or continuation of an- action or proceeding by a governmental unit to enforce such governmental unit’s police оr regulatory power.” Since the primary purpose of Cal.Rev. & Tax Code § 23301 is the protection of a pecuniary interest (the payment of taxes) and not the protection of the public health or safety, the exception does not apply.
Missouri v. United States Bankr. Ct,