Leave to appeal an interlocutory order should not be granted absent exceptional circumstances, and
granting such an appeal should be done sparingly. See Jn re Brand Name, 878 F. Supp. at 1081; BA
Leasing, 2003 WL 22176068 at *5.

A controlling question of law means a question of law that is “serious to the conduct of the
litigation, either practically or legally.” Johnson v. Burken, 930 F.2d 1202, 1206 (7th Cir. 1991),
quoting Katz v. Carte Blanche Corp., 496 F.2d 747, 755 (3rd Cir. 1974). The question of whether
the bankruptcy court properly stayed the Second Lawsuit constitutes a controlling question of law
because it is, at the minimum, practically serious to the conduct of the litigation between the parties.

In determining whether there are substantial grounds for a difference of opinion with respect
to the issue before the court, the court must determine whether there is a difficult central question
of law which is not settled by controlling authority of the sitting court. See In re Brand Names, 878
F. Supp. at 1081.

In the instant appeal, the central question is whether the bankruptcy court abused its
discretion in granting the stay of the Second Lawsuit. Ourhouse fails to show that there exists a
difficult central question of law which is not settled in the Seventh Circuit. In fact, Ourhouse
identifies the controlling case which sets forth the factors that the bankruptcy court should consider
in deciding whether a stay is appropriate; and the bankruptcy court here considered such factors.
Accordingly, there is not a substantial ground for a difference of opinion with respect to the issue
before the Court. See Praxair, Inc. v. Hinshaw & Culbertson, 1997 WL 662530 (N.D. Ill. Oct. 15,
1997); Kirkland & Ellis v. CMI Corp., 1996 WL 674072 (N.D. Ill. Nov. 19, 1996) (denying
interlocutory appeal, in part, because the appellant failed to demonstrate that substantial grounds for

a difference of opinion on the issue existed).



performed for the reorganization by the two D & O Defendants who remained employed by the
Debtors.

On October 24, 2003, the bankruptcy court judge stated, in open court, that it was granting
the Debtors’ injunction motion and staying the Second Lawsuit because the Second Lawsuit was
inextricably intertwined with the Original Lawsuit and presented the risk of inconsistent
adjudications and of diverting the Debtors’ assets and personnel to the detriment of Debtors’
reorganization. On November 5, 2003, the bankruptcy court entered an order granting the Debtors’
injunction motion for the reasons stated in open court on October 24, 2003.

In November 2003, Ourhouse filed the present appeal, arguing that the bankruptcy court
abused its discretion in granting the Debtors’ injunctive relief.

Initially, the Debtors argue that this Court lacks jurisdiction over this appeal.

The district courts have discretion to hear appeals from interlocutory orders and decrees of
the bankruptcy court. 11 U.S.C. § 153(a)(3). Generally, courts use the standards set forth in
28 U.S.C. § 1292(b) in determining whether to exercise their discretion under Section 153(a)(3).
See In re Brand Name Prescription Drugs Antitrust Litig., 878 F. Supp. 1078, 1081 (N.D. Il. 1995)
(In re Brand Name); BA Leasing Parties v. UAL Corp., 2003 WL 22176068 (N.D. Ill. Sept. 15,
2003) (BA Leasing). Section 1292(b) provides for appellate review of, non-final orders when (1) the
order appealed involves a controlling question of law, (2) there is a substantial ground for difference
of opinion on that question of law, and (3) an immediate appeal from the order may materially

advance the ultimate termination of the litigation. See In re Brand Name, 878 F. Supp. at 1081.

3-



Furthermore, Ourhouse has not identified any “exceptional circumstances” that would justify
an exercise of jurisdiction over the bankruptcy court’s interlocutory order or that an exercise of
jurisdiction would materially advance the ultimate termination of the Second Lawsuit. A prompt
decision by this Court would not save the parties much time and expense and would not prevent
“some irreparable harm” to Ourhouse. See BA Leasing, 2003 WL 22176068 at *5; In re Huff, 61
B.R. 678, 683 (N.D. Ill. 1986).

For the foregoing reasons, the November 5, 2003 order of the bankruptcy court is not

appealable; and, therefore, the appeal is dismissed.

Date: / wok 260f

tom, Darrah, Judge

United States District Court

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Minute Order Form (06/97) =

vy e@

» United States District Court, Northern District of Illinois
Name of Assigned Judge John W. Darrah Sitting Judge if Other
or Magistrate Judge . than Assigned Judge
CASE NUMBER 03 C 8705 DATE 3/11/2004
CASE Ourhouse Inc vs. UAL Corporation
TITLE
[in the following box (a) indicate the party filing the motion, e.g., plaimtiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented,]
DOCKET ENTRY:
(ql) im] Filed motion of [ use listing in “Motion” box above.]
(2) oO Brief in support of motion due
(3) G Answer brief to motion due . Reply to answer brief due.
(4) Qo Ruling/Hearing on set for at
(5) a Status hearing[held/continued to] [set for/re-set for] on set for at
(6) o Pretrial conference[held/continued to] [set for/re-set for]on___set for _at _
(7) a Trial[set for/re-set for] on at
(8) oO (Bench/Jury trial] [Hearing] held/continued to at
(9) a This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OFRCP4(m) (Local Rule 41.1 OFRCP41(a)(1) Cl) FRCP41(a)(2).
ao) ff [Other docket entry] For the reasons stated in the attached memorandum opinion and order, the
11/5/03 order of the bankruptcy court is not appealable; and therefore, the appeal is dismissed. Enter
Memorandum Opinion and Order. Status hearing set for 4/8/04 is stricken.
al) [For further detail see order attached to the original minute order.]
No notices required, advised in open court. Document,
No notices required. umber of notices
Notices mailed by judge’s staff.
Notified counsel by telephone. AR 18 2nnd
SY | Docketing to mail notices.
V7 | Mail AO 450 form, ol YAM is
Copy to judge/magistrate judge.
OM Oban .
courtroom Shed Sd er pney gate sited nie
MF deputy’s. °
initials
° i} * ‘Date/time received in
central Clerk's Office naling deputy sivas



ri>

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

In re:

DOCKETED

UAL COPORATION, et al., MAR 16 2004

Debtors/Appellees.

Case No. 03 C 8705
UAL CORPORATION, et al.,
Honorable John W. Darrah
Plaintiffs/Appellees,

Vv.

OURHOUSE, INC.,

weeernvernververervrrvrrvrrwerverwverwere

Defendant/Appellant.

MEMORANDUM OPINION AND ORDER

This matter comes before the Court on the appeal of an interlocutory order of the bankruptcy
court of November 5, 2003, by Ourhouse, Inc. For the reasons that follow, the appeal is dismissed
for lack of jurisdiction.

In March 2002, Ourhouse filed suit against one of the Debtors, UAL Loyality Services, Inc.
(“ULS”), in the Circuit Court of Cook County seeking damages allegedly incurred in connection
with ULS’s acquisition of MyPoints.com, Inc. (the “Original Lawsuit”). On December 9, 2002, the
Debtors filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Court
for the Northern District of Illinois. As a result of the bankruptcy filing, the Original Lawsuit was

stayed pursuant to the automatic stay of Section 362 of the Bankruptcy Code.



On July 24, 2003, Ourhouse filed a complaint in the Circuit Court of Cook County, Ilinois,
(the “Second Lawsuit”) against Richard J. Poulton, Douglas A. Hacker, John D. Stuart, John H.
Fullmer, Layton S. Han, and Craig S. Stevens (collectivey the “D & O Defendants”), all of who were
or are officers and/or directors of the Appellees (“Debtors”). The Second Lawsuit alleged that the
D & O Defendants committed acts of fraud in relation to the acquisition of MyPoints.com, Inc. All
of Ourhouse’s claims against the D & O Defendants are against such defendants individually, not
in their capacity as officers and/or directors of the Debtors.

On September 11, 2003, the Debtors filed a Complaint for Permanent Injunctive Relief or,
In the Alternative, to Extend the Automatic Stay and an Emergency Motion for a Permanent
Injunction of the Ourhouse Complaint or, In the Alternative, to Extend the Automatic Stay. In their
motion, the Debtors argued that the Second Lawsuit should be stayed because: (1) there was a risk
that the Debtors would have to indemnify the D & O Defendants for an adverse judgment against
them; (2) the litigation could exhaust Debtors’ directors’ and officers’ insurance policies; and (3) the
litigation would divert the time and attention of two D & O Defendants, who are key personnel that
are necessary to the Debtors’ reorganization.

Ourhouse opposed the motion, arguing that: (1) the Debtors did not demonstrate that there
was an absolute right of indemnification because the D & O Defendants could not be indemnified
for the ulta vires and bad faith actions alleged in the Second Lawsuit; (2) the Debtors’ motion did
not even attach the alleged directors’ and officers’ policies which purportedly would cover the acts
alleged in the Second Lawsuit; (3) the Debtors did not show that the Second Lawsuit would have
diverted key personnel involved in the Debtors’ reorganization; (4) six of the D & O Defendants no

longer worked for the Debtors in any capacity; and (5) the Debtors did not describe the work

-2-