In re JANICE CARRINGTON, Debtor. JANICE CARRINGTON, Appellant -against- SALVATORE LAMONICA and WILLIAM K. HARRINGTON, UNITED STATES TRUSTEE, Appellees.
Case 1:23-cv-06430-AT-RWL
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
October 16, 2023
ROBERT W. LEHRBURGER, United States Magistrate Judge.
USDC SDNY DOCUMENT ELECTRONICALLY FILED DOC #: DATE FILED: 10/16/2023; Appeal of Bankruptcy Case No. 20-10034-LGB
ORDER
ROBERT W. LEHRBURGER, United States Magistrate Judge.
Debtor Janice Carrington (“Carrington“), pro se, appeals from an order of the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court“) converting her case from one under Chapter 11 to one under Chapter 7 (the “Conversion Order“). Presently before the Court is Carrington‘s motion for a stay of all proceedings in the Bankruptcy Court pending determination of Carrington‘s appeal of the Conversion Order (the “Stay Motion“). (Dkt. 5.) For the reasons set forth below, the motion for a stay is DENIED.1
Factual And Procedural Background
Concurrent with the instant order, the Court has issued a Report and Recommendation that the Conversion Order be affirmed (the “R&R“). The Factual and Procedural Background set forth in the R&R is adopted herein by reference in its entirety.
Discussion
There is no basis for the Court to grant a stay of the bankruptcy proceedings. Carrington‘s motion is procedurally improper; and, in any event, Carrington cannot satisfy the showing required to obtain a stay.
A. Failure To Seek Relief In The Proper Forum
“Ordinarily, a party must move first in the bankruptcy court” for a stay of a bankruptcy court order pending appeal.
Although Carrington is pro se, and therefore, entitled to liberal reading of her pleadings, she is not exempt from compliance with relevant rules of procedural and substantive law. See Azzarmi v. Key Food Stores Co-Operative Inc., No. 20-CV-8635, 2021 WL 1734922, at *3 (S.D.N.Y. May 3, 2021) (“Pro se status ‘does not exempt a
“[D]istrict courts routinely dismiss motions for a stay pending appeal when,” as here, “relief is not first requested from the bankruptcy judge and the failure to do so is not adequately explained.” In re Anderson, 560 B.R. 84, 90 (S.D.N.Y. 2016); see also In re Alexander, 248 B.R. 478, 484 (S.D.N.Y. 2000). Carrington‘s failure to comply with
B. A Stay Is Not Warranted
To determine whether a stay pending appeal is appropriate, a court considers “four well-established factors.” In re 461 7th Avenue Market, Inc., No. 20-3555, 2021 WL 5917775, at *1 (2d Cir. Dec. 15, 2021). They are: “(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.” Id. (affirming denial of stay pending conversion from Chapter 11 to Chapter 7 and quoting In re World Trade Center Disaster Site Litigation, 503 F.3d 167, 170 (2d Cir. 2007)); In re Sabine Oil & Gas Corp., 548 B.R. 674, 681 (Bankr. S.D.N.Y. 2016). A stay pending appeal under
1. The Merits
Carrington has not shown that she is likely to prevail on appeal, which requires her to demonstrate that the Bankruptcy Court abused its discretion in converting the case to Chapter 7. See In re Lynch, 795 F. App‘x 57, 59 (2d Cir. 2020) (“order converting a bankruptcy case for cause is reviewed for abuse of discretion“). “A bankruptcy court abuses its discretion if it bases its decision on an erroneous view of the law or clearly erroneous factual findings.” In re Blaise, 219 B.R. 946, 950 (B.A.P. 2d Cir. 1998). It is unlikely that the Bankruptcy Court erred in either respect. Indeed, this Court has reviewed the entire record and recommends that the Conversion Order be affirmed as there is ample ground for doing so. The Court incorporates herein by reference its merits analysis from the R&R.
Carrington also does not show that she will suffer irreparable injury absent a stay. Harm must be “actual and imminent,” In re Adelphia, 361 B.R. at 347, “not remote or speculative,” In re 461 7th Ave. Market, Inc., 623 B.R. at 694 (denying stay pending appeal of conversion order). Whether Carrington could ever confirm a Chapter 11 plan even if the Conversion Order were reversed is speculative at best. Carrington has been in bankruptcy for over three years; a plan of reorganization has not been confirmed; and the Bankruptcy Court found no evidence to suggest that Carrington could successfully reorganize. To the contrary, when Carrington asked for another plan extension at the June 23, 2023 hearing, the Bankruptcy Court opined that “unfortunately another month isn‘t going to do anything here.” (Bkr. Dkt. 355, Tr. at 42:24-43:1.) “[L]osing the chance to propose a reorganization plan cannot amount to irreparable injury if there is no hope of confirming the plan.” In re 473 W. End Realty Corp., No. 14-CV-2321, 2014 WL 2213082, at *2 (S.D.N.Y. May 12, 2014); see also In re Hi-Toc Development Corp., 159 B.R. 691, 693 (S.D.N.Y. 1993) (“since no real likelihood of successful reorganization appears to exist, no irreparable injury flows from the conversion to Chapter 7.“)
Carrington suggests that her home is in peril (Stay Motion at 2), but that too is merely speculative. In the event the Trustee seeks authority to liquidate additional assets of the bankruptcy estate, the Bankruptcy Court will be required to make an independent determination as to whether such relief should be granted. The mere prospect of such relief being granted does not constitute irreparable harm. And while Carrington describes herself as “utterly depleted financially, emotionally and physically” by the proceedings (Stay Motion at 1), she puts forth no facts showing that she faces imminent physical or mental harm if the bankruptcy proceedings are allowed to continue.
3. Harm To Others
Nor does Carrington offer any facts or argument as to why other parties interested in the proceeding – namely the Trustees and creditors – would not incur substantial injury if a stay were to issue. If a stay is granted, the Trustee will be unable to carry out its mandate to collect and reduce to money the property of the estate for the benefit of creditors. See
4. The Public Interest.
Finally, the public interest also weighs against a stay. That is because the “public‘s interest in the expeditious administration of bankruptcy cases is impaired by obstructing a [bankruptcy] trustee‘s efforts to collect, liquidate and distribute assets to creditors of the estate.” In re Kwok, 653 B.R. 480, 508 (Bankr. D. Conn. 2023).
Conclusion
For the reasons set forth above, Debtor‘s motion to stay the bankruptcy proceedings, whether in part or in whole, is DENIED.
SO ORDERED:
ROBERT W. LEHRBURGER
UNITED STATES MAGISTRATE JUDGE
Dated: October 16, 2023
New York, New York
Copies transmitted to all counsel of record and to Debtor.