Opinion
Bankruptcy Case No. 01-10864 PJW, Civil Action No. 02-1353 JJF
February 9, 2004
Stephen J. Morgan, Pro Se Appellant
Gregg M. Galardi, Esquire, Mark L. Desgrosseilliers, Esquire of SKADDEN, ARPS, SLATE, MEAGHER FLOM LLP, Wilmington, Delaware, Eric W. Kaup, Esquire of SKADDEN, ARPS, SLATE, MEAGHER FLOM LLP, Chicago, Illinois, for Debtors and Debtors-in-Possession, Appellees
Joseph Malfitano, Esquire of YOUNG CONAWAY STARGATT TAYLOR LLP, Wilmington, Delaware, Nava Hazan, Esquire of AKIN GUMP STRAUSS HAUER FELD, LLP, New York, New York, Co-Counsel to the Plan Administrator
MEMORANDUM OPINION
Presently before the Court is the "Emergency" Motion For Stay Pending Appeal filed by Appellant Stephen J. Morgan. (D.I. 31.) For the reasons discussed below, the Court will deny Appellant's request for a stay pending appeal.
BACKGROUND
The instant action is a bankruptcy appeal arising from the voluntary bankruptcy filing by Polaroid Corporation and certain of its subsidiaries and affiliates (collectively the "Debtors") in October of 2001. By his Motion, the Appellant requests the Court to stay the implementation of the Debtors' plan for reorganization. The Bankruptcy Court denied an identical request for a stay by Appellant on December 16, 2003.
I. Parties' Contentions
The Appellant contends that the Court should stay the implementation of the reorganization plan because it is not in the best interest of Polaroid shareholders. The Appellant alleges that the auction of Polaroid's assets was fraudulent and that the value of Polaroid's assets far exceeded their sale price. Further, the Appellant contends that his appeal is likely to be successful because there remain unanswered questions about value and damaged shareholder and bondholder interests. The Appellant contends that if the Court denies his request for stay, he and other shareholders will be deprived of their right to appeal and their financial stakes in Polaroid. The Appellant also contends that a stay is in the public interest, because in light of recent corporate scandals, a resolution of the instant appeal is required.
In response, the Appellee contends that the Court should deny Appellant's request for an emergency stay because he has not satisfied the standards for entitlement to a stay pending appeal. Further, the Appellee contends that the Appellant's request is equitably moot. The Appellee also contends that Appellant failed to properly serve it and its counsel as required by the Federal Rules of Civil Procedure.
DISCUSSION
Federal Bankruptcy Rule 8005 enables a reviewing court to issue a stay pending appeal from a judgment, order, or decree of a bankruptcy judge. Courts interpreting Federal Bankruptcy Rule 8005 have established a four prong test for an appellant to obtain a stay: 1) a strong likelihood of success on the merits of the appeal; 2) the movant will suffer irreparable harm if the stay is denied; 3) substantial harm will not be suffered to non-moving parties if the stay is granted; and 4) issuance of the stay will not harm the public interest. In re 421 Willow Corp., 2003 WL 22318022 at *3 (E.D. Pa. Oct. 9, 2003). If a party fails to establish one of the four prongs, a court may deny the requested stay. In re ANC Rental Corp., 2002 WL 1058196 at *2 (D. Del. May 22, 2002) (citing In re Blackwell, 162 B.R. 117, 120 (E.D. Pa. 1993)). Because the Court concludes that Appellant has not established a likelihood of success on the merits, the Court will deny the request for stay pending appeal.
Likelihood of success on the merits means that a movant has a "`substantial case,' or a strong case on appeal." In re The Columbia Gas Svs., Inc., 1992 U.S. Dist. LEXIS 3253 at *4 (D. Del. March 10, 1992) (quoting In re Public Serv. Co. of N.H., 116 B.R. 347, 349 (Bankr. D. N.H. 1990). Appellant contends that "unanswered questions about value . . . once answered will favor the appeal." (D.I. 31 at 3.) However, in the instant motion the Appellant does not identify for the Court any order, decree, or judgment by the Bankruptcy Court that was erroneous, and thus, potentially reversible on appeal. Moreover, Appellant has not identified any potentially incorrect factual finding or legal conclusion reached by the Bankruptcy Court.
Absent specific challenges to actions taken by the Bankruptcy Court, the Court must conclude that Appellant has not demonstrated a strong likelihood of success on the merits. The Court will not speculate as to what errors, if any, were committed by the Bankruptcy Court. Therefore, because the Court concludes that Appellant has failed to establish the first prong of the test for entitlement to a stay, the Court will deny Appellant's Motion.
Based on this conclusion, the Court will not address Appellee's remaining bases for denial.
An appropriate Order will be entered.
ORDER
At Wilmington, this 9th day of February, 2004, for the reasons discussed in the Memorandum Opinion issued this date;
NOW THEREFORE, IT IS HEREBY ORDERED that the "Emergency" Motion For Stay Pending Appeal filed by Appellant Stephen J. Morgan (D.I. 31) is DENIED .