Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01627/USCOURTS-azd-2_08-cv-01627-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Citizenship

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A bankruptcy court may extend the automatic stay to a proceeding against

codefendants of the debtor when the claims against them and the claims against the debtor

are inextricably interwoven, presenting common questions of law and fact. In re Ionosphere

Clubs, Inc., 111 B.R. 423, 434 (Bankr.S.D.N.Y. 1990) (internal quotations omitted) (dealing

with related corporations and shareholders). The party seeking to extend the stay must

“affirmatively seek an order from the bankruptcy court, which has authority to extend the

protections of 362(a) pursuant to its equity powers under section 105.” C.H. Robinson

Company v. Paris & Sons, Inc., 180 F.Supp.2d 1002, 1018 (N.D. Iowa 2001) (emphasis

added). 

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Nouveau Riche Corporation, 

Plaintiff, 

vs.

Cherianne Tree; et al., 

Defendants. 

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No. CV 08-1627-PHX-JAT

ORDER

On August 10, 2009, Defendant Cherianne Tree filed a notice of filing bankruptcy.

As a result, the portion of this case against Ms. Tree is automatically stayed. However, the

case is not automatically stayed as to the other defendants.1

 The Court does not know

whether either of the other defendants has sought, or received, a bankruptcy stay.

Also pending is defense counsel’s motion to withdraw. First, the motion cites nothing

that would give this Court authority to permit withdrawal while the automatic stay is in effect

Case 2:08-cv-01627-JAT Document 72 Filed 08/13/09 Page 1 of 2
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as to Cherianne Tree. Second, a corporation cannot appear in Federal Court without counsel.

Rowland v. Cal. Mens Colony, Unit II Men’s Advisory Counsel, 506 U.S. 194, 201-202

(1993). Therefore, if the Court permits withdrawal as to Monopoly Concepts, Inc., Plaintiff

may seek to strike its answer and default the corporation. Finally, as indicated above, the

Court does not know whether the codefendants have sought or received bankruptcy stay

protection, and if yes, under what authority this Court could then permit withdrawal.

Based on the foregoing,

IT IS ORDERED setting a status conference for September 21, 2009 at 11:00 a.m.

Cherriane Tree is not required to appear. However, if her counsel seeks to withdraw, counsel

must appear and provide authority for withdrawal during a stay. Further, counsel for the

other two defendants must be prepared to advise the Court whether a stay has been or will

be sought as to those two codefendants. Finally, counsel for the defendants shall advise the

clients of this hearing and notify them that they may appear on their own behalf (except the

corporation, which must obtain substitute counsel if withdrawal is permitted).

DATED this 13th day of August, 2009.

Case 2:08-cv-01627-JAT Document 72 Filed 08/13/09 Page 2 of 2