Source: https://law.justia.com/cases/federal/appellate-courts/F2/711/60/302374/
Timestamp: 2019-12-15 21:12:45
Document Index: 192191874

Matched Legal Cases: ['§ 362', '§ 362', '§ 362', '§ 362', '§ 362', '§ 362', '§ 362', '§ 362', '§ 362']

Elmer Lee Cathey, et al., Plaintiffs-appellants (82-5393),plaintiffs-appellees (82-5425), Robert H. Bunch, et al.,plaintiffs-appellees (82-5433), James O. Cavett, (82-5580),plaintiff-appellee (82-5580), v. Johns-manville Sales Corporation, et al.,defendant-appellant (82-5425/5433/5580),defendant-appellee (82-5393), 711 F.2d 60 (6th Cir. 1983) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Sixth Circuit › 1983 › Elmer Lee Cathey, et al., Plaintiffs-appellants (82-5393),plaintiffs-appellees (82-5425), Robert H....
Elmer Lee Cathey, et al., Plaintiffs-appellants (82-5393),plaintiffs-appellees (82-5425), Robert H. Bunch, et al.,plaintiffs-appellees (82-5433), James O. Cavett, (82-5580),plaintiff-appellee (82-5580), v. Johns-manville Sales Corporation, et al.,defendant-appellant (82-5425/5433/5580),defendant-appellee (82-5393), 711 F.2d 60 (6th Cir. 1983)
US Court of Appeals for the Sixth Circuit - 711 F.2d 60 (6th Cir. 1983) Argued May 24, 1983. Decided July 1, 1983
11 U.S.C. § 362(a). Accordingly, the filing of J-M's petition for reorganization served to automatically stay the "continuation" of all "judicial" "proceeding [s]" "against the debtor". It is beyond peradventure that the instant appeals are continuations of judicial proceedings. Indeed, the bankruptcy court presiding over J-M's petition has acknowledged that the automatic stay of proceeding is applicable at both the trial and appellate levels. See: In re Johns-Manville Corporation, et al., 26 B.R. 405, adversary proceeding No. 82-6221A, Decision No. 1, and adversary proceeding 26 B.R. 420 (Bkrtcy.S.D.N.Y. 1983). Similarly, the bankruptcy court presiding over a petition for reorganization filed by Unarco Industries, Inc. (Unarco), a defendant in thousands of asbestos actions pending nationwide, has proclaimed that the stay of proceedings against Unarco operates at the appellate level. See: In re UNR Industries, Inc., 23 B.R. 144 (Bkrtcy.N.D. Ill. 1982).
Association of St. Croix Condominium Owners v. St. Croix Hotel, 682 F.2d 446, 449 (3d Cir. 1982). It would be anomalous for this Court to adjudge that the instant appeal is not "against the debtor" and therefore not subject to the automatic stay when it is undisputed that, should the merits of the appeal be reached and the action remanded for a new trial, the stay of proceeding would then attach since J-M would have been returned to its initial status of defendant. It is inconceivable that Congress intended or envisioned construction of the phrase "against the debtor" to oscillate in any given judicial proceeding depending upon which stage of trial the action had progressed on the date of the filing of the bankruptcy petition. In the actions at bar J-M's initial status as defendant satisfies the "against the debtor" criteria of § 362(a).
All criteria of § 362(a) (1) have been satisfied. The automatic stay of proceedings imposed by § 362(a) is inapplicable only when one of the eight criteria enumerated in § 362(b) is demonstrated. It has not been contended in these appeals, nor does it appear, that any category of § 362(b) applies. Therefore the automatic and mandatory stay of § 362(a) attaches to the instant appellate proceedings. Accord: Austin v. Unarco Industries, Inc., No. 82-116B (1st Cir. Aug. 5, 1982) (order). Contra: Hendrix v. Raybestos-Manhattan, Inc., No. 82-8538 (11th Cir. Dec. 22, 1982) (order), reh. denied, Jan. 28, 1982; Jackson v. Johns-Manville Sales Corporation, No. 82-4288 (5th Cir. Feb. 7, 1983) (order); Shop in the Grove, Ltd. v. Union Fed. Savings & Loan Association, 425 So. 2d 1138 (Fla.App.1982).
Section 362(d) of the House amendment represents a compromise between comparable provisions in the House bill and Senate amendment. Under section 362(d) (1) of the House amendment, the court may terminate, annul, modify, or condition the automatic stay for cause, including lack of adequate protection of an interest in property of a secured party. It is anticipated that the Rules of Bankruptcy Procedure will provide that those hearings will receive priority on the calendar. Under section 362(d) (2) the court may alternatively terminate, annul, modify, or condition the automatic stay for the cause including inadequate protection for the creditor. The court shall grant relief from the stay if there is no equity and it is not necessary to an effective reorganization of the debtor.
House Report No. 95-595, U.S.Code Cong. & Admin.News 1978, p. 5787, Notes of Committee on the Judiciary. Accord: In re Holtkamp, 669 F.2d 505, 507 (7th Cir. 1982) (§ 362(d) "commits the decision of whether to lift the stay to the discretion of the bankruptcy judge"); In re Related Asbestos Cases, 23 B.R. 523, 526 (N.D. Cal. 1982) ("the original bankruptcy courts alone should have exclusive power to lift an actual stay under section § 362"); Elliott v. Hardison, 25 B.R. 305, 308 (E.D. Va. 1982); In re Frigitemp Corp., 8 B.R. 284 (S.D.N.Y. 1981); 1A Collier on Bankruptcy, p 11.06 at 1164 (4th ed.). Because this Court possesses no authority to grant relief from the automatic stay of proceedings, the equitable considerations advanced on appeal by J-M's adversaries, while compelling, are directed to the improper forum.2 Relief from the stay may only be achieved in accordance with the statutory mechanism established by Congress. Other asbestos plaintiffs have recognized the exclusive authority of the bankruptcy court presiding over J-M's petition to annul the stay of proceedings and have successfully petitioned for that precise relief. See: Beatrice Hansen v. Johns-Manville Sales Corp., No. 82-6450A (Bkrtcy.S.D.N.Y. 1982); Johns-Manville Sales Corp. v. Edward Janssens, et al., (Bkrtcy.S.D.N.Y. 1982). This Court must comport to the congressional mandate and honor the automatic stay until such time as the instant proceedings may proceed in a manner consistent with the statutory framework.3