Opinion ID: 3006049
Heading Depth: 3
Heading Rank: 1

Heading: Whom does the balance of harms and public

Text: interest favor? To establish irreparable harm, a stay movant “must demonstrate an injury that is neither remote nor speculative, but actual and imminent.” Tucker Anthony Realty Corp. v. Schlesinger, 888 F.2d 969, 975 (2d Cir. 1989) (internal quotation marks omitted). “The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily 24 against a claim of irreparable harm.” Sampson v. Murray, 415 U.S. 61, 90 (1974) (internal quotation marks omitted); see also Gotanda, supra, at 814 (defining “irreparable injury” as “the harm [] the movant will suffer during the pendency of the litigation that cannot be prevented or fully rectified by the tribunal’s final decision”). IDEA asserts that, absent a stay, its appeal will be batted out of court by § 363(m), rendering the continued operation of its business at the Casino impossible. As to potential money damages, IDEA continues, the most it will receive is pennies on the dollar, which grossly undervalues its lease (and the millions it invested in reliance of it). See IDEA Br. 41 (arguing that “a money judgment will not compensate [it] for [the] loss of its possessory rights under §[]365(h) because [Revel] [is] insolvent and, as a result, [has] no ability to provide payment on any claim [IDEA] may have”). For its part, Revel responds that IDEA’s argument rests on a flawed assumption: that continued possession is substantially more valuable than the rejection damages it would receive. According to Revel (and the District Court), because Polo North would likely walk away from the sale if it were stayed, IDEA would be left with nothing but a possessory interest in a vacant building. See In re Revel, 525 B.R. at 32 (“[I]t is entirely logical that the absence of any occupant in the [] [C]asino would leave [IDEA] with, in essence, a possessory right in an empty and commercially-unproductive building.”). We do not accept that assertion. First, there is nothing in the record to refute IDEA’s contention that it can operate independently of the Casino. Indeed, a principal purpose of its lawsuit against Revel was to confirm IDEA’s right of access to a power source so that it can begin running its business again. See Oral Arg. Tr. 85:4–7 (noting that IDEA needed a utility easement “to continue to operate and work with the utility company”). We thus deem unsupportable the 25 suggestion of the District Court that, if Polo North walked away, IDEA would be left with “a possessory right in an empty and commercially-unproductive building.” In re Revel, 525 B.R. at 32. That still leaves us with the lingering question of whether rejection damages would sufficiently compensate IDEA for the loss of possession (and its business). On that question, we have previously observed that, though “a purely economic injury, compensable in money, cannot satisfy the irreparable injury requirement … an exception exists where the potential economic loss is so great as to threaten the existence of the movant’s business.” Minard Run Oil Co. v. U.S. Forest Serv., 670 F.3d 236, 255 (3d Cir. 2011) (citation and internal quotation marks omitted). That exception applies here. If we deny the stay, IDEA will lose not only its multimillion dollar investment but also the opportunity to operate what was, until the Casino closed, a profitable business. See Oral Arg. Tr. 100:12–18. In this context, IDEA shows sufficient irreparable injury to it absent a stay. Thus we turn to the harm to Revel (the only party who opposed IDEA’s request for a stay) 10 and the public interest (the latter, in essence, balances the benefits and harms to the public if a stay is imposed and if it is not). In assessing this side of the balance, the District Court credited Revel’s “position that the issuance of [a] stay would present ‘a real and substantial risk that Polo North would elect not to proceed with closing.’” In re Revel, 525 B.R. at 10 Polo North, though obviously having an interest in the outcome, took no significant role in advocating for or against a stay, and neither the Bankruptcy Court nor the District Court suggested that denying a stay would harm it, let alone cause irreparable harm. 26 32. As it does on appeal, Revel’s counsel had argued that even a limited stay would trigger bad things: Polo North walking away and Revel having to liquidate its assets under Chapter 7, which “not only would cause the permanent loss of approximately 4,000 jobs the [Casino] once provided, but also could cause substantial detriment to the City of Atlantic City and the surrounding areas, and possibly further hamper reorganization efforts at other casino resorts located in the city.” Revel Br. 50. In our view, the adequacy of the proof provided plays an important role “[i]n evaluating the harm that will occur depending upon whether or not [a] stay is granted.” Mich. Coal. of Radioactive Material Users, 945 F.2d at 154. Absent some sort of declaration or other evidence in the record that a stay would cause substantial harm, the harm to Revel was at best speculative. Note the context: Revel’s counsel told the District Court that granting IDEA a stay only to prevent its lease from being extinguished would nonetheless spoil the entire sale. 11 On the other hand, if IDEA lost its lease—a result a stay denial virtually guaranteed—its business at Revel’s site would be permanently shuttered. As a result, at the time of our ruling in February, the balance-of-harms tilted (at least moderately) in favor of IDEA. 11 As it turns out, a limited stay didn’t set off the consequences Revel and Polo North said it would. Notwithstanding the limited stay we put into place on February 6, 2015, Revel and Polo North closed two months later on April 7. See Notice of Sale Closing, In re Revel AC, Inc., No. 14-22654 (Bankr. D.N.J. Apr. 7, 2015), ECF No. 1553. 27 Does the public interest move the needle? We have doubts that it moves much. While the public certainly has an interest in saving jobs and helping Atlantic City’s often sullied reputation, nothing before us indicates how many jobs will be brought back of the 4,000 lost, as we were not told what use Polo North intended for the sold assets. On the other side, the public has a stake in protecting the rights of tenants in commercial properties. Furthermore, public policy strongly favors the correct application of the Bankruptcy Code, especially where property rights are at stake. Overall, though the public has an interest in preventing both outcomes, we ultimately believe the short-term gain of some jobs in a facility that is operational in some way tilts slightly in Revel’s favor. In any event, our ultimate conclusion need not rest primarily on a rough estimation of whom the balance of harms and public interest favor. For, along with IDEA’s sufficient showing of irreparable harm to it should a stay not be granted, success to it on the merits was assured. We explain why below.