Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_02-cv-03836/USCOURTS-cand-3_02-cv-03836-5/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:0157 Motion for Withdrawal of Reference

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CROWN PAPER LIQUIDATING TRUST,

Plaintiff,

v.

PRICEWATERHOUSECOOPERS LLP f/k/a

COOPERS & LYBRAND, et al.,

Defendants

 /

No. 02-3836 MMC

ORDER DENYING PLAINTIFF’S MOTION

TO STAY ENFORCEMENT OF

ATTORNEY’S FEES AWARDS AND

REQUEST FOR REDUCTION OF

SUPERSEDEAS BOND OR, IN THE

ALTERNATIVE, FOR ORDER

PERMITTING TRUST TO BE ADVANCED

MONEY

On March 30, 2005, the Court granted defendant Houlihan Lokey Howard & Zukin’s

(“Houlihan”) motion for an award of attorney’s fees, and awarded Houlihan fees and nontaxable costs in the total amount of $480,385.43. Additionally, on March 30, 2005, the

Court granted defendant Credit Suisse First Boston LLC’s (“Credit Suisse”) motion for an

award of attorney’s fees, and awarded Credit Suisse fees and non-taxable costs in the total

amount of $824,913. On April 22, 2005, plaintiff filed a notice of appeal from the abovereferenced orders, and such appeal is pending before the Ninth Circuit.

Before the Court is plaintiff’s motion, pursuant to Rule 62(d), to stay enforcement of

the above-referenced orders pending appeal, upon the posting of a bond in a reduced

amount. Alternatively, and in the event the Court finds a reduction of the bond amount is

not appropriate, plaintiff requests that its counsel either be allowed to pay the attorney’s

Case 3:02-cv-03836-MMC Document 408 Filed 07/01/05 Page 1 of 4
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fees awards or to advance plaintiff the funds necessary to obtain a supersedeas bond in

the amount of those awards. Houlihan and Credit Suisse have filed a joint opposition, in

which they state they do not oppose the Court’s granting permission to plaintiff’s counsel to

advance plaintiff the funds necessary to pay the attorney’s fees awards, but that they do

oppose the other forms of relief sought by plaintiff. Plaintiff did not file a reply.

I. Reduction of Bond Requirement

Plaintiff seeks an order staying enforcement of the judgments upon plaintiff’s posting

of a bond in the amount of $50,000, rather than a bond in the amount of the judgments,

which total $1,305,298.43. Plaintiff argues, inter alia, that it should not be required to post

a supersedeas bond in the amount of the judgments because such undertaking would

interfere with its plans to pay other creditors. In that regard, plaintiff does not argue it

would be financially impossible for it to pay the judgments, only that other creditors, in

plaintiff’s view, should be paid before Houlihan and Credit Suisse.

An appellant is not entitled to a stay of a monetary judgment pending appeal in the

absence of a showing that the appellee would be protected in the event the appeal is

unsuccessful. See In re Carlson, 224 F. 3d 716, 719 (7th Cir. 2000) (holding district court

has discretion under Rule 62(d) to waive requirement that appellant post bond in amount of

judgment, but “only if the appellant has a clearly demonstrated ability to satisfy the

judgment in the event the appeal is unsuccessful and there is no other concern that the

appellee’s rights will be compromised by a failure adequately to secure the judgment”); see,

e.g., Miami Int’l Realty Co. v. Pavnter, 807 F. 2d 871, 874 (10th Cir. 1986) (holding district

court did not err in granting stay without requiring appellant to post supersedeas bond in full

amount of judgment, where district court froze appellant’s assets and ordered appellant’s

insurance coverage escrowed pending stay). Here, as noted, plaintiff seeks to avoid

having to post a bond in the amount of the judgments, or to otherwise secure its obligations

to Houlihan and Credit Suisse, so that, essentially, it is free to pay other creditors.

Because plaintiff has not shown that Houlihan and Credit Suisse would be protected

in the event plaintiff does not prevail on appeal, the Court declines to exercise its discretion

Case 3:02-cv-03836-MMC Document 408 Filed 07/01/05 Page 2 of 4
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In the event plaintiff obtains permission to borrow such funds, and plaintiff elects to

post a supersedeas bond in the amount of the judgments rather than to pay the judgments,

plaintiff may renew its request for a stay before this Court. Any such renewed motion is to

be accompanied by a proposed form of bond.

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to grant a stay upon the posting of a bond in the amount of $50,000.

II. Advance of Costs By Counsel

Plaintiff alternatively requests that the Court allow one of its counsel, Beus Gilbert,

LLC (“Beus Gilbert”), to advance plaintiff either the amount necessary to pay the judgments

or to post a supersedeas bond in the amount of the judgments.

In support of its alternative request, plaintiff offers a declaration from a Beus Gilbert

partner, Leo R. Beus (“Beus”), who states Beus Gilbert is willing to advance the necessary

funds to plaintiff, and that plaintiff then will be obliged to repay the funds under the terms of

the Representation Agreement between plaintiff and Beus Gilbert. (See Beus Decl., filed

June 1, 2005, ¶¶ 7, 8.) According to Beus, the Bankruptcy Court, in the Crown bankruptcy

proceedings, approved plaintiff’s engagement of Beus Gilbert and that, “[i]n doing so, the

Bankruptcy Court had before it the Representation Agreement.” (See id. ¶ 6.) The

Representation Agreement provides that, irrespective of whether plaintiff prevails on its

claims, plaintiff is obliged to pay Beus Gilbert the costs and expenses advanced on

plaintiff’s behalf. (See id. Ex. 1 ¶ 2.1.)

In the proceedings before the Bankruptcy Court, plaintiff represented that under the

terms of the bankruptcy plan approved by the Bankruptcy Court, plaintiff is obligated to pay

creditors according to the terms of that plan. Because plaintiff now seeks to become

obligated to Beus Gilbert for an additional, and sizable, sum, this Court’s approval of

plaintiff’s alternative request could have unintended consequences with respect to the

integrity of the approved plan. Under such circumstances, the Court will deny plaintiff’s

alternative request, without prejudice to plaintiff’s seeking such relief from the Bankruptcy

Court.1

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CONCLUSION

For the reasons stated above, plaintiff’s motion is hereby DENIED.

IT IS SO ORDERED.

Dated: July 1, 2005 /s/ Maxine M. Chesney 

MAXINE M. CHESNEY

United States District Judge

Case 3:02-cv-03836-MMC Document 408 Filed 07/01/05 Page 4 of 4