IN THE UNITED STATES DISTRICT COURT 

 FOR THE SOUTHERN DISTRICT OF ALABAMA 

 SOUTHERN DIVISION 

FIRST FINANCIAL BANK, ) 

 )

Plaintiff, ) 

 ) 

v. ) CIVIL ACTION 08-0731-WS-M 

 ) 

CS ASSETS, LLC, ) 

 ) 

Defendant. )

ORDER

 This matter comes before the Court on plaintiff’s Motion for Disbursement of Funds 

Held in Registry (doc. 79) and defendant’s Motion to Stay and to Relieve Appellant from Bond 

Requirement (doc. 88). Both motions have been briefed and are ripe for disposition.1

I. Relevant Background. 

 Plaintiff, First Financial Bank, brought this action against defendant, CS Assets, LLC, for 

redemption of real property pursuant to Alabama Code §§ 6-5-247 et seq. At the outset of these 

proceedings, First Financial deposited the sum of $3,207,995.65 in the registry of this District 

Court. Those funds have been maintained by the Clerk of Court in an interest-bearing account 

for the duration of this litigation, awaiting disbursement instructions. 

 From its inception, the parties’ dispute centered on the proper calculation of a redemption 

price for certain parcels of land that First Financial sought to redeem. Following extensive crossmotions for summary judgment, wherein virtually every conceivable component of the 

redemption price was bitterly contested, the undersigned entered an Order (doc. 70) dated 

January 13, 2010, fixing the redemption price for the subject parcels at $2,733,069.91. This 

 1

 Also pending is plaintiff’s Motion for Leave to File Controverting Affidavit (doc. 

98). In the exercise of its discretion, the Court grants that Motion and will consider the short 

rebuttal Affidavit of B.K. Goodwin, III, appended to the Motion as an exhibit. 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 1 of 10
-2- 

figure was situated between those proposed by First Financial (which advocated a redemption 

price of $1,612,695) and CS Assets (which contended that the correct price was $3,272,156.40). 

 In the wake of the January 13 Order setting the redemption price, the parties clashed over 

whether First Financial had the right to walk away from the transaction, or whether its invocation 

of the redemption mechanism irrevocably entitled CS Assets (at its option) to compel First 

Financial to consummate the deal at the judicially-fixed price. CS Assets endeavored to force 

First Financial to proceed with the sale (even though the redemption price was more than a half 

million dollars below the valuation that defendant had demanded); meanwhile, First Financial 

sought a voluntary dismissal and return of its deposited funds (even though it had originally 

indicated that it was willing to pay more than the $3.2 million deposited in order to complete the 

redemption process, and even though the Court had set the redemption price at a figure 

substantially below that original deposit amount). On April 8, 2010, the undersigned entered 

another Order (doc. 78) observing that under Alabama case authorities, a redemption judgment 

“merely allows the plaintiff to purchase the property from the defendant within a specified time 

at a fixed dollar amount. ... The defendant cannot enforce payment.” Rhoden v. Miller, 495 

So.2d 54, 58 n.3 (Ala. 1986). Because the Alabama substantive law that created the redemption 

cause of action has been interpreted by Alabama’s highest court as authorizing a redemption 

plaintiff to do precisely what First Financial seeks to do in this case, the April 8 Order concluded 

that First Financial was permitted to forfeit its right to redemption after judicial computation of 

the price, and that CS Assets had no power to compel specific performance of a redemption 

transaction which First Financial had abandoned. In the absence of any showing of legal 

prejudice to CS Assets, the April 8 Order granted First Financial’s motion for voluntary 

dismissal, dismissed this action with prejudice, and directed further filings by the parties to 

resolve the final remaining issue of return of registry funds to First Financial.2

 On May 6, 2010, CS Assets filed a Notice of Appeal (doc. 81), whereby it appealed to the 

Eleventh Circuit both the January 13 Order adjudicating the cross-motions for summary 

judgment and the April 8 Order granting plaintiff’s motion for voluntary dismissal. That appeal 

 2

 CS Assets’ “legal prejudice” argument was that it would suffer “deprivation of the 

redemption” if First Financial were permitted to take a voluntary dismissal. But this could not be 

legal prejudice because CS Assets had no legal right to compel redemption under Alabama law. 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 2 of 10
-3- 

remains pending today. In the meanwhile, First Financial has asked this Court to disburse the 

more than $3.2 million in registry funds on deposit with the Clerk of Court. By contrast, CS 

Assets argues that the previous Orders of this Court should be stayed, that the Clerk should 

continue to hold the subject funds pending conclusion of the appeal, and that CS Assets should 

be excused from posting a supersedeas bond in the interim. The questions of whether the funds 

in the court registry should now be released to First Financial and whether any bond is necessary 

to stay such disbursement are thus squarely presented.3

II. Analysis.

 The parties appear to be in agreement that CS Assets’ request for a stay of this Court’s 

dismissal order and the concomitant disbursement of funds held by the Clerk of Court is 

governed by Rule 62(d), Fed.R.Civ.P. That rule provides that, when appeal is taken, “the 

appellant may obtain a stay by supersedeas bond. ... The stay takes effect when the court 

approves the bond.” Id. As a general proposition, then, if CS Assets desires a stay of rulings 

allowing First Financial to take a voluntary dismissal and to recover the $3.2 million in tendered 

funds, then it may obtain one as of right upon payment of adequate supersedeas bond approved 

by the Court.4 The purpose of such a bond is not only to “protect[] the prevailing plaintiff from 

 3

 Notwithstanding the pendency of CS Assets’ appeal, this Court possesses 

jurisdiction to consider the propriety of a stay. See, e.g., Matter of Miranne, 852 F.2d 805, 806 

(5th Cir. 1988) (“we are persuaded that the district court retained jurisdiction to grant appellant’s 

request for a stay despite the fact that a notice of appeal ... was filed prior to the request for a 

stay,” particularly given “general principle that an application for a stay of the judgment or order 

of a district court should ordinarily be made in the first instance in the district court”); Rakovich 

v. Wade, 834 F.2d 673, 674 (7th Cir. 1987) (“a notice of appeal does not deprive the district court 

of jurisdiction over a motion for stay of its judgment”). As such, it is appropriate for the 

undersigned to address CS Assets’ Rule 62(d) motion at this time. See Rule 8(a)(1)(A), 

Fed.R.App.P. (party seeking stay of judgment or order of district court pending appeal must 

ordinarily move first in the district court). 

4

 See, e.g., Eurasia Int’l, Ltd. v. Holman Shipping, Inc., 411 F.3d 578, 585 (5th Cir. 

2005) (“Fed.R.Civ.P. 62(d) provides that a party is entitled to an automatic stay of proceedings 

to enforce a judgment upon appeal when it posts a supersedeas bond.”); Frommert v. Conkright, 

639 F. Supp.2d 305, 308 (W.D.N.Y. 2009) (“the party posting the bond is entitled to a stay as of 

right; the court has no discretion to deny the stay itself, but only to fix the amount of (or to 

waive) the bond”); New Access Communications LLC v. Qwest Corp., 378 F. Supp.2d 1135, 

1138 (D. Minn. 2005) (“An appellant may request and obtain a stay of judgment pending appeal 

as a matter of right upon posting a supersedeas bond.”). 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 3 of 10
-4- 

the risk of a later uncollectible judgment,” but also to “compensate[] him for delay in the entry of 

final judgment.” Brinkman v. Department of Corrections of State of Kan., 815 F. Supp. 407, 408 

(D. Kan. 1993) (citations omitted); see also Poplar Grove Planting and Refining Co. v. Bache 

Halsey Stuart, Inc., 600 F.2d 1189, 1190-91 (5th Cir. 1979) (“The purpose of a supersedeas bond 

is to preserve the status quo while protecting the non-appealing party’s rights pending appeal. ... 

[T]he bond secures the prevailing party against any loss sustained as a result of being forced to 

forgo execution on a judgment during the course of an ineffectual appeal.”); United States v. 

Cowan, 535 F. Supp.2d 1135, 1148 (D. Haw. 2008) (“The supersedeas bond is meant to secure 

the appellee from any resulting loss from the stay.”); Perez Rodriguez v. Rey Hernandez, 304 F. 

Supp.2d 227, 229 (D.P.R. 2004) (supersedeas bond requirement “compensates [appellee] for the 

delay in the entry of final judgment”). 

 CS Assets is requesting a Rule 62(d) stay that would prevent disbursement of registry 

funds back to First Financial, as this Court has effectively ordered, pending the conclusion of CS 

Assets’ appellate challenge to those rulings.5

 The wrinkle in this case is that CS Assets has not 

posted a supersedeas bond and has asked to be relieved of the obligation to post any such bond. 

Applicable authorities explain that in the normal, typical case, a supersedeas bond is a mandatory 

condition for a Rule 62(d) stay, and that relief from that prerequisite may be granted only upon 

an affirmative showing of good cause by the appellant. Indeed, “[i]f a court chooses to depart 

from the usual requirement of a full security supersedeas bond to suspend the operation of an 

unconditional money judgment, it should place the burden on the moving party to objectively 

 5

 It should be noted that a stay is not necessary to preserve CS Assets’ appellate 

rights as to the challenged rulings in this case. Even if the registry funds were disbursed to First 

Financial at this time, CS Assets would remain free to pursue its appeal of this Court’s 

determinations that those funds properly belong to First Financial and that First Financial cannot 

be compelled to redeem the subject parcels. See, e.g., Ohio Nat’l Life Assur. Corp. v. Langkau 

ex rel. Estate of Langkau, 2009 WL 3824789, *3 (11th Cir. Nov. 17, 2009) (where district court 

disbursed interpleaded funds, ensuing appeal was not moot because appellant “can recover the 

proceeds if the court determines on remand that he is the proper recipient of the insurance 

proceeds”); Strong v. Laubach, 443 F.3d 1297, 1299 (10th Cir. 2006) (“A judgment debtor who is 

unable or is unwilling to post a supersedeas bond retains the right to appeal even if the judgment 

is executed.”). 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 4 of 10
-5- 

demonstrate the reasons for such a departure.” Poplar Grove, 600 F.2d at 1191.6

 In evaluating 

whether to relieve an appellant of the bond requirement, district courts have substantial 

discretion. See, e.g., In re Initial Public Offering Securities Litigation, --- F. Supp.2d ----, 2010 

WL 2505677, *1 (S.D.N.Y. June 17, 2010) (“It is within the district court’s discretion to 

determine the amount and nature of the bond.”) (citation omitted); Marcoux v. Farm Service and 

Supplies, Inc., 290 F. Supp.2d 457, 485 (S.D.N.Y. 2003) (“Whether to grant a stay without a 

supersedeas bond is a matter that remains within this Court’s sound discretion.”); Brinkman, 815 

F. Supp. at 408 (“District courts have inherent discretionary authority in setting supersedeas 

bonds.”). 

 As grounds for evading the “usual requirement” of a supersedeas bond in this case, CS 

Assets does not assert that payment of a bond would impose a financial hardship or would 

somehow be impracticable. Instead, CS Assets urges the Court to dispense with the bond 

requirement here because (i) the subject funds are on deposit in the court registry, and are 

therefore quite safe and readily available to First Financial should CS Assets’ appeal fail; (ii) 

preservation of the status quo favors the non-disbursement of registry funds pending appeal;7

 and 

(iii) First Financial will not be harmed by the holdback of those funds pending appeal because 

they are in an interest-bearing account. 

 6

 See also Athridge v. Iglesias, 464 F. Supp.2d 19, 23-24 (D.D.C. 2006) (“a full 

supersedeas bond should be the requirement in normal circumstances,” from which the district 

should not deviate unless the movant “objectively demonstrate[s] the reasons for such a 

departure”) (citations omitted); Marcoux v. Farm Service and Supplies, Inc., 290 F. Supp.2d 457, 

485 (S.D.N.Y. 2003) (“Because a supersedeas bond is designed to protect the appellee, the party 

seeking the stay without a bond has the burden of providing specific reasons why the court 

should depart from the standard requirement of granting a stay only after posting of a 

supersedeas bond in the full amount”) (citation omitted); Holland v. Law, 35 F. Supp.2d 505, 506 

(S.D. W. Va. 1999) (“the power of the court to waive the supersedeas bond requirement should 

only be exercised in extraordinary circumstances”) (citation and internal quotation marks 

omitted); Brinkman, 815 F. Supp. at 408 (waiver of supersedeas bond requirement “occurs only 

upon the appellant objectively demonstrating good cause”). 

7

 This contention is a non sequitur. At its core, the issue before the Court is 

whether CS Assets must post a supersedeas bond in order to obtain a Rule 62(d) stay. 

Cataloguing the perceived benefits such a stay would confer upon CS Assets sheds no light on 

the bond question. 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 5 of 10
-6- 

 After careful consideration, the Court finds that CS Assets’ showing is inadequate to 

constitute the good cause or extraordinary circumstances necessary to depart from the usual, 

baseline requirement that an appellant seeking a stay of a money judgment pending appeal must 

pay a supersedeas bond to secure the appellee from any resulting loss. The fundamental point 

that defendant overlooks is that the supersedeas bond requirement is designed to safeguard the 

interests of prevailing plaintiffs, not appealing defendants. Without question, CS Assets has the 

right to challenge on appeal this Court’s refusal to construe Alabama law to authorize a 

defendant to force a putative redemptioner to complete a sale at the court-determined price, even 

though the Alabama Supreme Court has explained that redemption defendants cannot compel 

such a transaction. But if CS Assets wants to stay this Court’s rulings pending appeal, then First 

Financial will suffer a very real, tangible harm for which security is necessary. The Clerk is 

holding more than $3.2 million that this Court has found belongs to First Financial. If this 

Court’s orders are stayed on appeal, then First Financial will be deprived of access to those funds 

for the duration of the appeal, notwithstanding the undersigned’s final determination that First 

Financial is entitled to those funds. As a commercial bank in the business of loaning and 

investing money, First Financial has shown that it would put those funds to work if it could 

access them now, and thereby earn a profit. A stay pending CS Assets’ appeal would prevent 

First Financial from earning money by investing those funds during the lifespan of the appeal. 

Under these circumstances, a supersedeas bond is properly required to compensate First 

Financial for losses it will incur by virtue of a stay pending appeal. 

 In an effort to avoid posting a bond, CS Assets insists that “[t]here is no harm to the 

Plaintiff in requiring the maintenance of the funds on deposit pending appeal” because the Clerk 

of Court is holding them in an interest-bearing account. (Doc. 88, at 4.) But First Financial has 

presented evidence that it would not lend those funds out at the 0.15% rate they are presently 

earning in the court registry. Rather, if First Financial had use of the funds now, “[a]n 

anticipated overall average rate of return to the bank on the funds would be 5% per annum.” 

(Goodwin Aff. (doc. 90-1), ¶ 2.) The difference between the 5% that First Financial states it 

could earn by loaning/investing the funds, and the 0.15% that the funds are earning now, 

represents loss to the appellee as to which a supersedeas bond is warranted to protect First 

Financial’s interests. 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 6 of 10
-7- 

 CS Assets responds by dumping 90 pages of banking reports into the record and casting 

aspersions on First Financial’s past “imprudent banking decisions.” (Doc. 94, at 2.) CS Assets’ 

point is, apparently, twofold, to-wit: (1) that there are “material issues as to the substantial risk of 

loss of the funds held in the registry should they be released to First Financial”; and (2) that “the 

most reasonable investment comparable would probably be to U.S. Treasurers [sic] with a 

duration of 12 -18 months.” (Id.) Neither assertion is persuasive. As to the former contention, 

CS Assets apparently labors under the erroneous understanding that the bond requirement is in 

place to protect CS Assets in the event that it prevails on appeal. The opposite is true. Contrary 

to CS Assets’ suggestion, the issue is not whether CS Assets may obtain a stay on appeal under 

Rule 62(d) (plainly it can), but whether CS Assets must adhere to the normal, usual practice of 

posting security as a condition of that stay. CS Assets’ suggestion that it should be relieved of 

the bond requirement because if the funds are released and if CS Assets prevails on appeal, it 

might have a hard time recovering those funds from First Financial both confuses the issue and 

disregards the fact that the supersedeas bond rule is designed to protect First Financial, not CS 

Assets.8 As to the latter point, CS Assets offers no evidence whatsoever to support its 

conclusory statement that U.S. Treasury bills earning 0.37% are the “most reasonable investment 

comparable” to the yields First Financial would earn if it could use the money that this Court has 

held it is entitled to. There is no reason to believe that First Financial would simply plow the 

registry funds into 12-month U.S. Treasury bills, or a comparable investment. Indeed, First 

Financial has expressly denied that such is the case, or that an 0.37% return is anywhere close to 

its expected yield on those funds. (Goodwin Aff. (doc. 98-1), at 1-2.) 

 8

 CS Assets’ misapprehension of the purposes of the supersedeas bond requirement 

is underscored by its argument in the alternative that it “offers to deposit a deed to the property 

with the Court to secure its obligation to transfer the property should it be successful upon 

appeal.” (Doc. 88, at 3.) Again, the purpose of the supersedeas bond is to protect First 

Financial, the victorious party below, not to grease the skids for CS Assets’ desired outcome if 

CS Assets, the losing party below, wins on appeal. Depositing a deed for property that First 

Financial does not want as security for CS Assets’ obligation to sell the property to First 

Financial if CS Assets prevails on appeal would do nothing to protect First Financial’s interests 

in being made whole now, nor would it compensate First Financial for damages attendant to any 

CS Assets-caused delay in First Financial’s recovery of its registry funds. In short, the proposed 

deed is not adequate security because it would not protect First Financial’s interests, would not 

promote any of the purposes or functions of a Rule 62(d) supersedeas bond, and would instead 

further CS Assets’ agenda in the event that its appeal is successful. 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 7 of 10
-8- 

 In light of the foregoing, it is the opinion of this Court that CS Assets has failed to satisfy 

its burden of demonstrating that this action falls into the unusual or extraordinary category of 

cases in which a supersedeas bond should not be required as security for stay of a money 

judgment on appeal. In fact, the prevailing party in this District Court has shown that it will 

suffer direct financial harm if this Court’s rulings are stayed pending appeal, inasmuch as it will 

not be able to lend or invest the $3.2 million held by the Clerk of Court during the pendency of 

appeal, activities through which it reasonably expects to earn a return far higher than that 

accruing in the interest-bearing account where those funds are presently maintained. 

 The only remaining question concerns the size of the supersedeas bond. Under Rule 

62(d), “the district court has discretion as to the amount of the bond.” DeKalb County School 

Dist. v. J.W.M., 445 F. Supp.2d 1371, 1376 (N.D. Ga. 2006). That said, “[t]he general rule is for 

the district court to set a supersedeas bond in the full amount of the judgment, plus interests, 

costs, and damages for delay.” New Access Communications LLC v. Qwest Corp., 378 F. 

Supp.2d 1135, 1138 (D. Minn. 2005) (citation omitted). The critical component here is 

“damages for delay.” As discussed supra, the record shows that First Financial, in the course of 

its regular commercial banking activities, would invest or lend the funds for a roughly 4.85% 

higher annual yield than they are now earning in the registry, and that a stay pending CS Assets’ 

appeal would prevent First Financial from doing so. This is precisely the sort of loss 

encompassed by the notion of “damages for delay,” for which a supersedeas bond should be 

required. That said, CS Assets has presented evidence that First Financial has invested only 63% 

of its assets in loans. (Doc. 94, Exh. 1, ¶ 4.) Far from quarreling with that figure, First Financial 

merely states that its “percentages are very normal in the banking industry.” (Doc. 98-1, ¶ 4.) 

This unrebutted evidence supports a reasonable inference that, if the $3.2 million were released 

to it, First Financial would invest or lend not 100% of those funds, but only 63%, in keeping with 

those reported, uncontroverted percentages. That factor must be accounted for in the 

supersedeas bond calculations. Finally, the Court reasonably estimates that the appeals process, 

which has already been underway for three months, will last an additional 10 months from today 

(after accounting for the near-certainty of requests for rehearing or en banc consideration by the 

losing party), such that 10 months worth of foregone returns on the subject funds are properly 

counted as delay damages. 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 8 of 10
-9- 

 Based on the foregoing findings, the Court calculates the delay damages for which any 

supersedeas bond must compensate First Financial as follows: $3,207,995.65 (principal amount 

in court registry that this Court has determined is due and owing to First Financial) times 0.63 

(percentage of funds that First Financial invests in loans) times 0.0485 (differential between 

expected commercial banking investment return and actual return on funds in court registry) 

times 0.833 years (expected duration of appeals process from this date forward). After 

performing the requisite arithmetic, the delay damages to First Financial occasioned by a stay on 

appeal are properly calculated as being $81,683.59. That amount is set as the Rule 62(d) 

supersedeas bond in this case. If CS Assets wishes to obtain a stay of this Court’s rulings 

pending appeal and to forestall the immediate disbursement of funds to First Financial, it must 

timely post a bond in that amount. 

III. Conclusion.

 For all of the foregoing reasons, it is hereby ordered as follows: 

1. Plaintiff’s Motion for Leave to File Controverting Affidavit (doc. 98) is granted. 

2. Defendant’s Motion to Stay Proceedings Pending Appeal and to Relieve 

Appellant from any Requirement to Post Bond (doc. 88) is denied. 

3. Plaintiff’s Motion for Disbursement of Funds Held in Registry (doc. 79) is 

granted. In accordance with this Court’s prior rulings, plaintiff is entitled to 

disbursement of funds held in the court registry in this matter, amounting to 

$3,207,995.65, plus interest. 

4. Notwithstanding items 2 and 3, defendant may obtain a stay of this disbursement 

order pursuant to Rule 62(d), Fed.R.Civ.P., by depositing a supersedeas bond with 

the Clerk of Court in the amount of $81,683.59 to secure First Financial from 

delay damages that the stay is reasonably expected to cause. If CS Assets desires 

a Rule 62(d) stay, it must present the Clerk of Court with a supersedeas bond in 

that amount by no later than August 19, 2010. 

5. If CS Assets does not timely deposit that supersedeas bond as provided in item 4, 

then the Clerk of Court is directed to disburse all funds held in the registry in this 

matter, including principal and interest (subject of course to the 10% fee on 

interest pursuant to 28 U.S.C. § 1914 and Local Rule 67.1(g)), to plaintiff on 

August 20, 2010, or as soon thereafter as is reasonably practicable, without 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 9 of 10
-10- 

further order of the Court. Plaintiff will be expected to comply with the 

requirements of Local Rule 67.1(e) prior to disbursement. 

DONE and ORDERED this 5th day of August, 2010. 

 s/ WILLIAM H. STEELE 

 CHIEF UNITED STATES DISTRICT JUDGE 

Case 1:08-cv-00731-WS-M Document 99 Filed 08/06/10 Page 10 of 10