The court found that the debtor's involvement, albeit peripheral, and the potential interference with the reorganization efforts, justified the stay of the third-party action. These were indeed extraordinary cases requiring the extreme remedy of a nondebtor stay. The nondebtors were not under the scrutiny of the court, a creditors' committee or the United States Trustee and did not have to report or provide financial information to any party. Notwithstanding this concern, the rationale for staying actions against nondebtors has spiraled. Injunctions have been extended to cases beyond the mass tort cases, such as securities fraud class actions or claims against partners of a debtor partnership, officers and directors of a debtor corporation, indemnitees and guarantors of a debtor.
Most creditors dispute the nondebtor's right to a stay.
The debtor hopes for a successful reorganization, but exposes itself to many obligations and significant scrutiny as a result of filing for bankruptcy. Therefore, rather than merely extending the automatic stay as a matter of course to nondebtor parties who would benefit without further liability or risk, A.H. Robins and its progeny require that there be some exceptional or unusual circumstances to justify the stay. The nondebtor stay cannot and should not be automatic. However, in a subsequent Johns-Manville proceeding, the court granted an injunction prohibiting actions against the officers, directors, employees, insurers, sureties and other agents of the debtor, because the lawsuits exposed the debtor to claims for contribution and indemnification and had a potential collateral effect. While some courts still tend to extend the stay in order to assist the reorganization process and to avoid inconsistent judgments against nondebtor parties which may collaterally estop or otherwise bind the debtor in a later proceeding, courts generally will follow the A.H. Robins standard and require truly exceptional circumstances to allow a nondebtor to enjoy the benefits of the Bankruptcy Code without filing.