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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

FORT LAUDERDALE DIVISION

www.flsb.uscourts.gov

In re: Chapter 11 Cases

LIBERTY POWER HOLDINGS, LLC, Case No. 21-13797-SMG

LPT, LLC, Case No. 21-15537-SMG

LIBERTY POWER MARYLAND, LLC, Case No. 21-15539-SMG

LIBERTY POWER DISTRICT OF COLUMBIA, LLC, Case No. 21-15540-SMG

Debtors. (Jointly administered 21-13797-SMG)

/

DEBTORS’ OBJECTION TO MOTION FOR RELIEF FROM 

THE AUTOMATIC STAY PURSUANT TO 11 U.S.C. §362(D) [ECF No. 551]

Liberty Power Holdings, LLC (“Holdings”), Liberty Power District of Columbia, LLC 

(“Liberty District of Columbia”), LPT, LLC (“LPT”) and Liberty Power Maryland, LLC 

(“Liberty Maryland”)(collectively, the “Debtors”), by and through their undersigned counsel, file 

this objection (the “Objection”) to the Motion for Relief from the Automatic Stay Pursuant to 11 

U.S.C. §362(d) filed by BLT Steak LLC and BLT Fish LLC, individually and as the appointed 

representative of the class certified in the Class Action (defined below)(the “Stay Relief 

Motion”) [ECF No. 551]

1

and state as follows:

RELEVANT BACKGROUND

1. On April 20, 2021 (the “Petition Date”), Holdings filed a voluntary petition in this 

Court for relief under the Bankruptcy Code. 

2. On June 4, 2021, Liberty District of Columbia, LPT and Liberty Maryland, each a 

wholly-owned subsidiary of Holdings, filed chapter 11 bankruptcy petitions and thereafter 

obtained joint administration of such bankruptcy cases with the chapter 11 case of Holdings, 

 

1 All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Stay 

Relief Motion.

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including to facilitate the sale of all or substantially all of the Debtors’ assets, including without 

limitation, retail customer contracts and associated receivables pursuant to Sections 363 and 365 

of the Bankruptcy Code. 

3. Since their respective bankruptcy filings, the Debtors have operated as debtors-inpossession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.

4. As of the date hereof, no creditors’ committee has been appointed in these cases. 

In addition, no trustee or examiner has been appointed.

5. For a detailed description of the Debtors and their operations, the Debtors

respectfully refer the Court and parties in interest to the Declaration of Bob Butler, Chief 

Restructuring Officer, in Support of the Chapter 11 Petition and First Day Motions (the “First Day 

Declaration”) [ECF No. 10]. 

PRELIMINARY STATEMENT

In the Stay Relief Motion, BLT Steak, LLC and BLT Fish, LLC (collectively, the 

“Plaintiffs”) assert that they are the appointed representatives of the class certified in a case 

pending in the Supreme Court of New York, County of New York, Case No. 151293 / 2013 styled 

BLT Steak, LLC and BLT Fish, LLC v. Liberty Power Corp., LLC d/b/a Liberty Power New York 

and Liberty Power Holdings, LLC (the “Class Action”), and seek entry of an order granting relief 

from the automatic stay so that the Plaintiffs can resume their litigation against Holding’s and the 

Debtors parent company, Liberty Power Corp., LLC d/b/a Liberty Power New York (“Corp.”). 

Although the Class Action case was originally commenced on February 11, 2013, as of the Petition 

Date, the New York Court had not entered an order certifying the class or appointing class counsel 

because the parties could not reach agreement on the language of the proposed order. 

Among other things, the Plaintiffs allege that the class of commercial energy consumers 

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suffered damages because of the Debtors and Corp’s alleged breach of certain commercial 

contracts by charging exorbitant rates for electricity. In connection with the foregoing, the Motion 

seeks relief from stay to “continue their litigation against the Defendants to the extent there are 

insurance proceeds available to the Plaintiffs and to liquidate the class claim.” 

The Debtors are not aware of any insurance policies that would cover the claims asserted 

by Plaintiffs in the Class Action. Regardless of the availability of insurance coverage, however, 

the Debtors would still be required to participate and defend the claims asserted against the Debtors 

by Plaintiffs and expend significant amounts in legal fees and costs. The Plaintiffs assert, “Any 

amount unsatisfied from insurance will be a claim against the estate.” As such, the Debtors would 

be required to participate in the Class Action to avoid the very real chance of the Debtors being 

bound by collateral estoppel and/or record taint in respect of rulings that may be made in the Class 

Action. Next, Plaintiffs assert that judicial economy favors the relief they seek, that they are likely 

to prevail on the merits, that the stay imposes a hardship on them, and that relief from stay does 

not prejudice the Debtors because the claims ultimately need to be liquidated. Moreover, Plaintiffs 

assert they will be able to conduct discovery on non-debtors to investigate any direct claims they 

may have against non-debtor entities. 

Among other compelling reasons outlined below, there is no need to upend the entire 

claims allowance process established under the Bankruptcy Code simply because Plaintiffs want 

to rush to liquidate their claims before another court. Importantly, on June 24, 2021, the Plaintiffs 

filed Proof of Claim (Claim No. 17) in the Holdings’ chapter 11 case asserting an unsecured claim 

in the amount of $383,112,952.00, thereby submitting themselves to the jurisdiction of this Court 

to liquidate their claims. 

While a new motion with mostly new movants, the Stay Relief Motion is similar in form 

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and substance to the Motion for Relief from the Automatic Stay [ECF No. 159] filed by Plaintiffs 

Samuel Katz and Lynn Rhodes, seeking stay relief to liquidate their claims and seek certification

of a class in the case pending in the United States District Court for the District of Massachusetts, 

under the caption Katz v. Liberty Power Corp., LLC, No. 18-10506 (the “TCPA Case”). In 

connection with the foregoing, this Court entered an Order Denying Without Prejudice denied the 

Stay Relief Motion (I) Motion For Relief From The Automatic Stay Pursuant To 11 U.S.C. §362(D) 

[ECF No. 159] And (II) All Other Relief Requested In Connection Therewith [ECF No. 222] and 

correctly found that by filing a proof of claim the movants submitted themselves to the jurisdiction 

of this Court to liquidate their claims and proceeding in another forum would be wasteful and 

unnecessarily deplete the Debtors’ limited resources. The same holds true in this case. 

As outlined in detail below, the Stay Relief Motion should be denied because Plaintiffs 

have not met their heavy burden to show “cause” for relief from stay under the facts and 

circumstances of the present case. 

DEBTORS’ OBJECTIONS

A. The Automatic Stay Is a Fundamental Debtor Protection and Exceptions Are

Narrowly Construed.

“The automatic stay is among the most basic of debtor protections under bankruptcy law.”

Soares v. Brockton Credit Union (In re Soares), 107 F. 3d 969, 975 (1st Cir. 1997) (citing

Midlantic Nat’l Bank v. New Jersey Dep’t of Envtl. Protection, 474 U.S. 494, 503 (1986); see also

In re Halo Wireless, Inc., 684 F.3d 581, 586 (5th Cir. 2012). (“Congress considered the automatic

stay one of the fundamental debtor protections provided by the bankruptcy laws when it was

instituted.”). The stay “is extremely broad in scope and, ‘aside from the limited exceptions of

subsection’ (b), applies to almost any type of formal or informal action taken against the debtor or

the property of the estate.” Montalvo v. Autoridad de Acueductos y Alcantarillados (In re

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Montalvo), 537 B.R. 128, 140 (Bankr. D.P.R. 2015). This expansive scope serves the cardinal

purposes of bankruptcy: namely, to “prevent certain creditors from gaining a preference for their

claims against the debtor; to forestall the depletion of the debtor’s assets due to legal costs in

defending proceedings against it; and, in general, to avoid interference with the orderly liquidation

or rehabilitation of the debtor.” In re SCO Grp., Inc., 395 B.R. 852, 856 (Bankr. D. Del. 2007)

(internal quotation marks omitted)); Unisys Corp. v. Dataware Prods., Inc., 848 F.2d 311, 313 (1st

Cir. 1988); In re Jefferson Cnty., 491 B.R. 277, 285 (Bankr. N.D. Ala. 2013) (explaining that a

key purpose of municipal bankruptcy is “the breathing spell provided by the automatic stay” and

stating “[i]f the automatic stay is to be lifted routinely to allow claimants to assert their claims in

state court, a municipality will not have the time, opportunity or ability to confirm a plan”).

In light of this fundamental protection, an order lifting the automatic stay is an

“extraordinary remedy.” In re 234-6 West 22nd St. Corp., 214 B.R. 751, 757 (Bankr. S.D.N.Y.

1997).

B. A Party Seeking Relief from the Automatic Stay Must Demonstrate “Cause.”

A court may grant relief from the automatic stay imposed by 11 U.S.C. § 362(a) only “for

cause,” 11 U.S.C. § 362(d)(1), and the burden of establishing a prima facie case of “cause” falls

squarely on the movant. See, e.g., In re Rothstein Rosenfeldt Adler, P.A., Case No. 09-34791-

RBR, 2011 Bankr. LEXIS 591, at *6 (S.D. Fla. Bankr. Jan. 24, 2011). “The party asserting that

cause exists has the burden of establishing the legally sufficient basis for such relief.” In re Louis,

20-62841-JWC, 2020 WL 2843013, at *2 (Bankr. N.D. Ga. May 29, 2020). The Bankruptcy Code

does not provide a definition of “cause” and “so courts often analyze cause by considering the

totality of the circumstances in each case.” In re Honh-Yin Chan, Case No. 6:18-bk-03297-KSJ,

2019 WL 3948202 at *2 (Bankr. M.D. Fla. June 3, 2019); In re Bryan Road, LLC, 382 B.R. 844,

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854 (S.D. Fla. Bankr. 2008). Therefore, the court must determine whether discretionary relief from

the stay is appropriate on a case-by-case basis. In re Errico, 618 B.R. 41, 48 (Bankr. M.D. Fla.

2020). “Generally, the court should balance the potential hardship that will be incurred by the

moving party if the stay is not lifted against the potential prejudice to the debtor and the debtor’s

estate. In re Gulfstream Crane, LLC, Case No. 09-37091-BKC-RBR, 2010 Bankr. LEXIS 5665,

at *4 (S.D. Fla. Bankr. Mar. 4, 2010).

While there is no set list of circumstances that a bankruptcy court is required to consider

in evaluating whether § 362(d)(1) “cause” exists to lift the automatic stay, the Eleventh Circuit has

considered: (1) whether the debtor has acted in bad faith; (2) the “hardships imposed on the parties

with an eye towards the overall goals of the Bankruptcy Code”; and (3) the status of pending state

court proceedings. In re Feingold, 730 F.3d 1268, 1277 (11th Cir. 2013); Barclays–Am./Bus.

Credit, Inc. v. Radio WBHP, Inc. (In re Dixie Broad., Inc.), 871 F.2d 1023, 1026 (11th Cir.1989);

In re Ellingsworth Residential Cmty. Ass'n, Inc., 6:20-BK-01346-KSJ, 2020 WL 6803154, at *2

(Bankr. M.D. Fla. Oct. 16, 2020); Honh-Yin Chan, 2019 WL 3948202 at *2; Siewe v. Locci (In re

Siewe), 730 Fed. App’x 871, 877 (11th Cir. 2018).

It is the Plaintiffs’ burden to show “cause” for relief from the automatic stay under this 

test. In re Ellingsworth Residential Cmty. Ass'n, Inc., 6:20-BK-01346-KSJ, 2020 WL 6803154, at 

*2 (Bankr. M.D. Fla. Oct. 16, 2020). Should the Plaintiffs “fail[] to make an initial showing of 

cause, [] the court should deny relief without requiring any showing from the debtor that it is 

entitled to continued protection.” In re Sonnax Indus., Inc., 907 F.2d 1280, 1285-86 (2d Cir. 1990);

see also Capital Comm. Fed. Credit Union v. Boodrow (In re Boodrow), 126 F.3d 43, 48 (2d Cir. 

1997) (“We have emphasized that a bankruptcy court should deny relief from the stay if the movant 

fails to make an initial showing of cause.”). “[T]he general rule is that claims that are not viewed 

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as secured in the context of § 362(d)(1) should not be granted relief from the stay unless 

extraordinary circumstances are established to justify such relief.” In re Leibowitz, 147 B.R. 341, 

345 (Bankr. S.D.N.Y. 1992); see also In re Motors Liquidation Co., 2010 WL 4966018 (S.D.N.Y. 

Nov. 17, 2010).

At the outset, the cardinal purposes of bankruptcy protection outlined above 

overwhelmingly support denial of the Stay Relief Motion, and the continued enforcement of the 

automatic stay. See supra SCO Grp., Unisys Corp., Jefferson Cnty. In this case, BLT Steak LLC 

and BLT Fish LLC, as Class Representatives filed on June 24, 2022, a proof of claim in these

Chapter 11 cases asserting a claim in the amount of $383,112,952.00 [POC No. 17] which claim 

constitutes prima facie evidence of the validity and amount of such claim unless and until the 

Debtors object to it. See Bankruptcy Rule 3001(f). The Debtors submit that continuation of the 

Class Action would inequitably burden the Debtors by forcing them to expend, time, resources 

and funds of the estate engaging in discovery and litigation, and it will prejudice other similarly 

situated creditors of the Debtors who must wait for their claims to be addressed in the claims 

resolution process. To be clear, lifting the stay to require the Debtors to defend Plaintiffs’ claims 

separately in a different forum would undermine the claims process and upend the “strong 

bankruptcy code policy that favors centralized and efficient administration of all claims in the 

bankruptcy court . . . .” See Publicker Indus. Inc. v. United States (In re Cuyahoga Equip. Corp.), 

980 F.2d 110, 117 (2d Cir. 1992) (citations omitted); see also In re BFW Liquidation, LLC, No. 

09-00634-BGC-11, 2009 WL 8003536, at *3 (Bankr. N.D. Ala. Sept. 14, 2009) (“[T]he effect of 

lifting the stay for all such claimants and requiring debtors to defend lawsuits in diverse forums 

merely to establish what share, if any, the claimants filing those suits will have in whatever is left 

of bankruptcy estates would hinder the goals of the automatic stay and the summary process for 

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adjudicating and liquidating claims.”). Worse, allowing Plaintiffs to proceed will open the 

floodgates to all other putative plaintiffs seeking to liquidate their claims in another court. In re

Gatke Corp., 117 B.R. 406, 410 (Bankr. N.D. Ind. 1989) (denying motion to lift stay to allow state 

court suit to proceed against debtor, even though stay of litigation would cause hardship to 

defendant, because granting relief from stay would, among other things, encourage the filing of 

“similar requests for relief by plaintiffs of pending lawsuits”). Plaintiffs cannot be allowed to 

“gain a preference” over other creditors for their claims against the Debtors. 

Further, granting stay relief will force the Debtors to expend substantial amounts on legal 

fees and costs, which will deplete its limited resources. Plaintiffs make light of this factor by 

suggesting that they only want to pursue their claims to “the extent insurance coverage exists ...” 

In doing so, Plaintiffs have failed to even address whether or not the Debtors have insurance 

coverage available to cover the claims asserted. Any proceeds flowing from the insurance policy 

amounts to property of the estate pursuant to 11 U.S.C. § 541. “[The] definition [of the bankruptcy 

estate] is intended to be broadly construed, and courts are generally in agreement that an insurance 

policy will be considered property of the estate. Insurance policies are property of the estate . . . . 

Any rights the debtor has against the insurer, whether contractual or otherwise, become property 

of the estate.” Sosebee v. Steadfast Ins. Co., 701 F.3d 1012, 1023 (5th Cir. 2012); citing In re 

Edgeworth, 993 F.2d 51, 55-56 (5th Cir. 1993). More importantly, regardless of the availability 

of insurance coverage, the Debtors would still be required to participate and defend the claims 

asserted against the Debtors by Plaintiffs and expend significant amounts in legal fees and costs. 

Specifically, the Plaintiffs assert “Any amount unsatisfied from insurance will be a claim against 

the estate.” As such, the Debtors would be required to participate in the Class Action to avoid the 

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very real chance of the Debtors being bound by collateral estoppel and/or record taint in respect of 

rulings that may be made in the Class Action. 

Prior to the Petition Date, the Debtors had to engage the law firm of Greenberg Traurig and 

Eckert Seamans and have already incurred substantial legal fees and costs defending the Class 

Action over the course of the past 8 years. If stay relief is granted the Debtors will have to incur 

additional legal fees and costs to defend the Class Action. Moreover, the Debtors’ senior secured 

creditor, Boston Energy Trading & Marketing, LLC (“BETM”), has not authorized the use of its 

cash collateral or debtor-in-possession financing to pay any fees to any counsel to defend the Class 

Action. As a result, it is clear that denying the Stay Relief Motion will protect the Debtors from 

depleting their limited resources.

Moreover, if the Stay Relief Motion were granted, the Debtors’ limited number of 

personnel will be forced to spend a substantial amount of time in the discovery and trial process, 

taking valuable time away from their efforts in liquidating the business, complying with the 

Bankruptcy Code, advancing the transition and transfer of the customer contracts to the buyer in 

the East and to the various state utilities, and advancing the claims review process. As a result, it 

is clear that denying the Stay Relief Motion will avoid interference with the orderly and valuemaximizing liquidation of the Debtors’ assets. 

In addition, under the factors established by the Eleventh Circuit and discussed below, it is 

likewise clear that “cause” does not exist under section 362(d)(1) for relief from the automatic stay

because, e.g., (i) the Debtors acted in good faith in exercising their right to seek relief under the 

Bankruptcy Code, including unrelated to the Class Action, (ii) granting stay relief would 

significantly prejudice the Debtors and their ability to successfully reorganize/liquidate their 

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assets; and (iii) while there are pending proceedings outside of the Bankruptcy Court, those 

proceedings are not final, are not near completion, and judicial economy favors the Debtors. 

1. The Debtors filed their petitions in good faith and have complied with their

duties and obligations as debtors-in-possession.

There is no particular test for determining whether a debtor has filed a petition in good faith

or in bad faith. Courts may consider any factors which evidence ‘an intent to abuse the judicial

process and the purposes of the reorganization provisions or, in particular, factors which evidence

that the petition was filed to delay or frustrate the legitimate efforts of secured creditors to enforce

their rights.” In re 412 Boardwalk, Inc., 520 B.R. 126, 132-33 (Bankr. M.D. Fla. 2014) (quoting

In re Phoenix Piccadilly, Ltd., 849 F.2d 1393, 1394 (11th Cir. 1988)); In re Blue Eagle Farming,

LLC, 18-02395-TOM-11, D.E. 303, at 3-5 (Bankr. N.D. Ala. Nov. 15, 2018) (applying Feingold

/ Siewe factors and concluding that debtor filed case in good faith where, despite having been

actively participating in pre-petition litigation when it was in its infancy and in the discovery

planning stage, “the Debtors have availed themselves of the relief provided by the Bankruptcy

Code, consistent with the underlying purpose of the Code, as it appears to this Court that the

Debtors face some financial challenges”).

The Court is well aware of the circumstances leading up to the filing of the within chapter

11 cases, including the devastating impact that Winter Storm Uri had on the Debtors and their

senior secured creditor BETM. Since filing their chapter 11 cases, the Debtors have complied with

the Bankruptcy Code and have efficiently and effectively advanced these chapter 11 cases towards

a value-maximizing sale process, including, among other things, obtaining access to and use of the

systems of Corp so as to operate the business, obtaining the consensual use of cash collateral from

BETM, obtaining debtor-in-possession financing from BETM, and obtaining approval to pay

critical vendorsto preserve the value of the business. Most importantly, after conducting a fulsome

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marketing and sale process pursuant to bidding procedures approved by the Court, the Debtors

entered into a stalking horse agreement with the Buyer, obtained approval from the Court to sell

the Purchased Assets to the Buyer over the objection of several interested parties and successfully

closed on the sale of the Purchased Assets to the Buyer. In connection therewith, the Debtors and

the Buyer have been working diligently to effect a transition and transfer of the customer contracts,

including providing all required notices to customers and regulatory agencies, and by complying

with all applications laws related thereto. The Debtors have also obtained orders of the Court

authorizing the rejection and termination of a substantial portion of the remaining customer

contracts that are not being sold to the Buyer. Further, the Debtors have obtained an extension of

their DIP Loan with BETM through the end of February and have requested and recently obtained

a further extension through the end of March 2022. The Debtors also obtained the Administrative

Claims Bar Date for February 9, 2022, and are presently reviewing and considering the four (4)

applications for the allowance of Chapter 11 administrative claims seeking in excess of $9.0

million in the aggregate. Lastly, the Debtors have commenced an investigation into potential

claims and causes of action available to the Debtors’ estates and have issued subpoenas in

connection therewith [ECF Nos. 527, 528].

The filing of these chapter 11 cases and the actions of the Debtors, their professionals,

management and employees were done in the utmost good faith. The Plaintiffs have not suggested

any facts that would show that the Debtors acted in bad faith in connection therewith. To be clear,

the filing of these chapter 11 cases had nothing to do with the Class Action. Therefore, this factor

overwhelmingly supports denial of the Stay Relief Motion.

2. The balance of hardships to the parties considering the overall goals of the 

Bankruptcy Code.

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Courts applying this factor begin with an analysis of the applicable goals of the Bankruptcy

Code at play. E.g., Blue Eagle Farming, LLC, 18-02395-TOM-11, D.E. 303, at 5. As highlighted

supra, a primary goal of the Bankruptcy Code is the “fresh start” for the debtor, which permits the

debtor a new opportunity and a “clear field for future effort, unhampered by the pressure and

discouragement” of pre-existing obligations. United States v. Jones (In re Jones), 230 B.R. 875,

880 (M.D. Ala. 1999). That is why the stay is so expansive—this fresh start should enable the

debtor preserve its assets from, inter alia, the legal costs of defending proceedings against it and

avoid interference with the debtor’s orderly rehabilitation. E.g., SCO Grp., Inc., 395 B.R. at 856.

As outlined above, the Debtors are advancing the goals of the BankruptcyCode by focusing

on operating their business, complying with the Bankruptcy Code and advancing the transition and

transfer of the customer contracts to the buyer in the East and to utilities in the various states, and

advancing the claims review process. Forcing the Debtors to re-focus their limited resources on

the Class Action (especially when the Plaintiffs have already filed a proof of claim in these

proceedings) will present a substantial hardship on the Debtors and unnecessary legal fees and

costs. The very size of the claim ($383 million) suggests that litigation over it will be complex

and prohibitively expensive. On the other hand, enforcing the automatic stay and denying the Stay

Relief Motion will not impose a hardship on the Plaintiffs, certainly not one that outweighs the

hardship imposed on the Debtors. The Plaintiffs’ claim – assuming it is objected to - can be

resolved through the claims process in these proceedings without the need to expend additional

legal fees and costs in the Class Action.

In the present case as outlined above, forcing the Debtors to participate in the Class Action

will have an adverse and detrimental impact on the administration of these Chapter 11 cases and

the ultimate recovery to creditors. Moreover, despite Plaintiffs’ assertion that they will seek to

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minimize the impact and expense of continued litigation, such efforts are completely illusory and

lifting the stay would seriously and adversely impact the Debtors’ administration of its estate and

rehabilitation efforts. In re W.R. Grace & Co., No. 01-01139, 2007 WL 1129170, *2 n.7 (Bankr.

D. Del. Apr. 13, 2007) (“The most important factor in determining whether to grant relief from the

automatic stay . . . is the effect of such litigation on the administration of the estate.”). In fact,

diverting the Debtors’ attention to ancillary litigation at this critical juncture in the Debtors’

chapter 11 case “is precisely the type of activity and burden to the estate which § 362 of the Code

was intended to alleviate.” In re Swallen’s, Inc., 205 B.R. 879, 884 (Bankr. S.D. Ohio 1997).

Consistent with W.R. Grace, courts have routinely denied requests to lift the automatic stay

where the debtor would be required to expend its limited resources to defend against litigation. In

re Residential Capital, LLC, No. 12-12020, 2012 WL 3860586, at *6 (Bankr. S.D.N.Y. Aug. 8,

2012) (denying lift-stay motion in part because “[t]he new litigation in non-bankruptcy courts

would hinder the Debtors’ attempts to reorganize by forcing the Debtors to utilize time and

resources that would otherwise be spent in resolution of the Debtors’ chapter 11 cases.”); In re

Northwest Airlines Corp., No. 05-17930, 2006 WL 694727, at *2 (Bankr. S.D.N.Y. Mar. 13, 2006)

(“To allow the automatic stay to be lifted with respect to this action at this time would prompt similar

motions and require the Debtors to spend an inordinate amount of time and money on litigation and

detract from the Debtors’ attempts to restructure . . . interfere[ing] with judicial economy and the

Debtors’ process of reorganization.” (citations omitted)); In re Plumberex Specialty Prod., Inc., 311

B.R. 551, 563-64 (Bankr. C.D. Cal. 2004) (rejecting effort to lift stay in part because “the cost of

protracted litigation of a separate proceeding in a non-bankruptcy forum would prejudice the

interests of other creditors of the estate”); In re Motors Liquidation Co., No. 09- 50026, 2010 WL

4630327, at *4 (S.D.N.Y. Nov. 8, 2010) (finding no abuse of discretion where bankruptcy court

concluded in denying lift-stay motion that “allowing Appellant to proceed with the ERISA suit

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would force [debtor] to expend estate resources to defend that action” and thus “would prejudice

the interests of other creditors”).

In contrast to the substantial harm that would befall the Debtors and their estates outlined

above, the Plaintiffs have failed to articulate any significant harm that would result if the relief

requested in the Stay Relief Motion was denied especially in light of the fact that they have filed

a proof of claim in these proceedings. Absent such a showing, the Plaintiffs cannot carry their

“heavy and possibly insurmountable burden of proving that the balance of hardships tips

significantly in favor of granting relief.” In re W.R. Grace & Co., No. 01-01139, 2007 WL

1129170, at *3 (Bankr. D. Del. Apr. 13, 2007) (internal quotation omitted); see also In re Am.

Classic Voyages, Co., 298 B.R. 222, 225 (D. Del. 2003) (stating that the movants must show that

“the balance of hardships from not obtaining relief tips significantly in [its] favor”) (citation

omitted). One alleged hardship advanced by the Plaintiffs is financial hardship to the consumers

who will be forced to absorb the costs associated with a delay in litigating their claims. It is unclear

how a delay in litigating the claim in the Class Action will result in additional costs to the

consumers in light of the filing of a claim in these proceedings. This delay, if true, is only that—

delay. “Relief from the automatic stay for ‘cause’ is not, nor was it intended by the drafters of the

Bankruptcy Code, to encompass mere delay in the assertion of rights . . . .” In re Madison Hotel

Assocs., 18 B.R. 218, 219 (Bankr. W.D. Wis. 1982).

Based on the above, the balancing of hardships weighs heavily in favor of denying the Stay 

Relief Motion.

3. Status of Pending Court Proceedings

In addition to the above factors, the Eleventh Circuit looks to the status of the pending

proceedings in the non-bankruptcy forum. As set forth above, the Class Action, although

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commenced in 2013, has not advanced rapidly. An order certifying the class has not been entered,

and discovery is in the preliminary stages. The Plaintiffs seek to use the Class Action against the

Debtors primarily as a vehicle to assert and pursue claims against non-debtor third parties. The

Plaintiffs know that obtaining a judgment against the Debtors for an unsecured claim will likely

have little to no value in these Chapter 11 cases. If the Plaintiffs have claims against non-debtor

parties, then they are free to pursue such claims. However, they cannot use the prosecution of

claims against the Debtors as a method to do so. Such motivation is simply not “cause” to grant

relief from the stay.

As a result, this factor weighs heavily in favor of denying the Stay Relief Motion.

4. Probability of Success on the Merits

Ignoring the factors considered by the Eleventh Circuit in both Feingold and Siewe,

Plaintiffs cite instead to the Rexene Products decision to argue that the Court should grant relief

from stay because the movant’s probability of success on the merits is substantially greater than

“very slight.” See Izzarelli v. Rexene Products Co (In re Rexene Prod. Co), 141 B.R. 574, 576

(Bankr. D. Del. 1992). In support of this proposition, Plaintiffs argue that because the class has

been certified “there can be no dispute the Plaintiffs probability of success passes muster under

the equitable balancing test.” See, Stay Relief Motion ¶20. As stated above, as of the Petition

Date, the New York Court had not entered an order certifying the class or appointing class counsel

because the parties could not reach agreement on the language of the proposed order. Moreover,

even if the class is certified the Plaintiffs are taking a gigantic leap and equating that with overall

success on the merits of a case that is highly complex. As such, the Plaintiffs have not carried

their burden. The Class Action has is still in the initial stages of discovery and as such there is

simply no meaningful way for this Court to evaluate the merits of that litigation. Moreover, the

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Plaintiffs have filed a proof of claim in this case of over $383 million, which has not been objected

to by the Debtors and is therefore prima facie allowed at this time. As a result, this factor alone

supports denial of the Stay Relief Motion.

WHEREFORE, the Debtors respectfully request that the Court deny the Stay Relief 

Motion, and grant such other and further relief as is proper. 

Dated this 28th day of February 2022. 

Respectfully Submitted,

GENOVESE JOBLOVE & BATTISTA, P.A.

Counsel for Debtor-in-Possession

100 Southeast Second Street, Suite 4400

Miami, Florida 33131

Telephone: (305) 349-2300

Facsimile: (305) 349-2310

By: /s/ Paul J. Battista

Paul J. Battista, Esq.

Florida Bar No. 884162

pbattista@gjb-law.com

Mariaelena Gayo-Guitian, Esq.

Florida Bar No. 813818

mguitian@gjb-law.com

Heather L. Harmon

Florida Bar No. 13192

hharmon@gjb-law.com

Case 21-13797-SMG Doc 570 Filed 02/28/22 Page 16 of 17
17

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on February 28, 2022, I electronically filed the foregoing 

Motion with the Clerk of the Court using CM/ECF. I also certify that the foregoing Objection is

being served this day by transmission of Notices of Electronic Filing generated by CM/ECF to 

those parties registered to receive electronic notices of filing in this case. 

/s/ Paul J. Battista.

Paul J. Battista 

Case 21-13797-SMG Doc 570 Filed 02/28/22 Page 17 of 17