Opinion
Case No. 01-61299-DOT Chapter 11
June 6, 2002
David R. Ruby, Esquire, Va. State Bar #22703, David E. Smith, Esquire, Va. State Bar #42407, McSweeney Crump, P.C., Co-Counsel for Stephen Gould Paper Company, Richmond, Virginia.
David Barron, Esquire, Nevada Bar #0142, Janelle LaVigne, Esquire, Nevada Bar #7059, Barron, Vivone, Holland Pruitt, Chtd., Counsel for Stephen Gould Paper Company, Las Vegas, Nevada.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Pursuant to the Court's request that the parties submit proposed orders, findings of fact and conclusions of law regarding the evidence, testimony and arguments presented at the final hearing on Stephen Gould Paper Company's ("Stephen Gould') Motion for Relief from Stay held on April 30, 2002, movant Stephen Gould respectfully submits the following:
I. FINDINGS OF FACT
A. Factual Background of the Nevada Personal Injury Lawsuit
1. Melanie Howard, the Plaintiff in the underlying personal injury suit in Nevada, was injured on November 14, 1998, at a bowling tournament held at Sam's Town Casino in Las Vegas, Nevada. (Tr., p. 7, l. 3-6).
2. Ms. Howard was injured when Jack Lawford, a patron who had received a free AMF bowling ball at the bowling tournament, carried the bowling ball up an escalator. The ball allegedly fell out of the box, bounced down the handrail of the escalator, and struck Ms. Howard in the head. (Tr., p. 7, l. 7-11).
3. Counsel for Ms. Howard wrote to Boyd Gaming Corporation, the owner of Sam's Town Casino, to inquire about who manufactured and distributed the bowling balls that were given away at the bowling tournament. Boyd Gaming Corporation indicated that AMF Bowling Products, Inc. and/or AMF Bowling Worldwide, Inc distributed the bowling ball in the box. (Tr., p. 8, l. 7-9).
4. Counsel for Ms. Howard sent a letter to AMF Bowling Worldwide, Inc. notifying them of the injury and inquiring about the status of their insurance. (Tr., p. 8, l. 15-19). AMF Bowling Worldwide, Inc. did not respond to counsel's inquiry. Instead, the Risk Manager for AMF Bowling, Inc. responded by letter dated January 19, 1999, wherein she denied liability and refused to provide any information about AMF's insurance. (Tr., p. 8, l. 22-25). The responsive letter from the AMF Risk Manager, introduced into evidence as Exhibit A, was sent on letterhead containing AMF Bowling, Inc.'s corporate name and address. (Tr., p. 9, l. 21-24).
5. Counsel for Ms. Howard filed a "First Amended Complaint" in Nevada state court naming AMF Bowling, Inc. as a co-defendant. (Tr., p. 11, l. 17-25). The Court admitted the First Amended Complaint into evidence as Exhibit B. (Tr., p. 12, l. 3).
B. AMF Bowling, Inc. Actively Participated in the Lawsuit.
6. AMF Bowling, Inc. was represented by counsel at all times during Ms. Howard's prosecution of her personal injury claim in the Nevada state and federal courts. (Tr., p. 35, l. 6).
7. Counsel for AMF Bowling, Inc. filed "Defendant AMF Bowling, Inc.'s Answer to First Amended Complaint and Cross-Claims" in the Nevada state court action on October 30, 2000. Counsel signed this particular pleading on behalf of AMF Bowling, Inc. (Tr., p. 14, l. 16-18). The Court admitted this pleading into evidence as Exhibit E. (Tr., p. 14, l. 21).
8. Counsel for AMF Bowling, Inc. filed "Defendant AMF Bowling, Inc.'s Joinder in Columbia Industries' Statement of Removal Pursuant To 28 U.S.C. § 1441" with the United States District Court in Nevada on December 4, 2000. Counsel signed this particular pleading on behalf of AMF Bowling, Inc. (Tr., p. 13, l. 22). The Court admitted this pleading into evidence as Exhibit D. (Tr., p. 13, l. 25).
9. Counsel for AMF Bowling, Inc. filed its "Statement in Support of Removal of Action Pursuant To 28 U.S.C. § 1441" on December 15, 2000, with the United States District Court in Nevada. Counsel signed this particular pleading on behalf of AMF Bowling, Inc. (Tr., p. 15, l. 10-12). The Court admitted this pleading into evidence as Exhibit F. (Tr., p. 15, l. 15).
10. Counsel for AMF Bowling, Inc. filed "Defendant AMF Bowling, Inc.'s Answer to Stephen Gould Paper Company, Inc.'s Cross-Claim" in the Nevada state court action on or about December 20, 2000. (Tr., p. 12, l. 23-24). Counsel signed this particular pleading on behalf of AMF Bowling, Inc. This Court admitted this pleading into evidence as Exhibit C. (Tr., p. 13, l. 2).
C. AMF Bowling, Inc. Perpetuated Any Misnomer Problem.
11. AMF employees and counsel fostered and perpetuated the belief that AMF Bowling, Inc. was the proper co-defendant in Ms. Howard's personal injury lawsuit.
12. Under Rule 135-5 of the Local Rules of the U.S. District Court for Nevada, the parties have an affirmative obligation to raise the issue with the court and the parties if a defendant is named incorrectly in a lawsuit. (Tr., p. 16, l. 22-24). AMF Bowling, Inc. never notified plaintiff's counsel, the Nevada state court or the Nevada federal court that plaintiff incorrectly had named AMF Bowling, Inc. as a defendant to the personal injury lawsuit. (Tr., p. 16, l. 3-5, 14-17).
13. Counsel for AMF Bowling, Inc. filed its "Certificate as to Interested Parties in Accordance With Local Rule 135-5" on December 27, 2000, with the United States District Court in Nevada. The Court admitted this pleading into evidence as Exhibit G. (Tr., p. 17, l. 12). This pleading, filed pursuant to Local Rule 135-5, requires that every party in an action describe any other party who has an interest in the outcome of the litigation (i.e., affiliates, subsidiaries, insurance companies, other real parties in interest, etc.). (Tr., p. 17, l. 16-21). The interested parties listed by AMF Bowling, Inc. on its Certificate as to Interested Parties identified only: Melanie Howard, Mathew Yarborough, AMF Bowling, Inc., Columbia Industries and Stephen Gould Paper Company, Inc. (Tr., p. 18, l. 4-9). AMF Bowling, Inc. did not include any references to its subsidiaries or affiliates within the Certificate as to Interested Parties filed with the Nevada federal district court. (Tr., p. 18, l. 13).
D. Evidence of Hardship to Stephen Gould and Ms. Howard
14. Discovery in the personal injury suit was not complete at the time AMF Bowling, Inc. filed its Notice of Suggestion of Bankruptcy. (Tr., p. 31 l. 24). Nonetheless, counsel for Ms. Howard already had provided AMF Bowling, Inc. with evidence of her injuries in addition to facts and evidence indicating AMF Bowling, Inc.'s potential liability. This evidence included the actual bowling ball packaging/box that was disclosed to counsel for AMF Bowling, Inc. at an initial disclosure conference. (Tr., p. 32, l. 7-10). "AMF Bowling Products" was listed as the AMF entity on the actual box that contains AMF Night Hawk bowling balls. (Tr., p. 42, l. 16).
15. Since AMF Bowling, Inc. filed for bankruptcy, the parties have adhered to the automatic stay and have not continued to prosecute the case against AMF. The case has stalled since AMF Bowling, Inc. has not participated. (Tr., p. 34, l. 9-14).
16. Counsel for Ms. Howard was not notified of any misnomer concerning AMF Bowling, Inc.'s status in the personal injury suit until he received a copy of "Debtor's Motion to Dismiss and Objection to Motion for Relief From Stay." (Tr., p. 19, l. 20-21). Counsel for Ms. Howard sent local counsel for AMF Bowling, Inc. a letter dated February 25, 2002, indicating that AMF Bowling, Inc. had never raised the misnomer issue and had never served a Certificate as to Interested Parties indicating that a subsidiary of AMF was the real party in interest. (Tr., p. 19, l. 23-25). The Court admitted this letter into evidence as Exhibit H. (Tr., p. 20, l. 15).
17. Ms. Howard's personal injury lawsuit has reached an advanced stage and all parties will be prejudiced if AMF Bowling, Inc., does not continue to participate. A trial date has been established for the personal injury suit in Nevada for either September or October, 2002. (Tr., p. 34, l. 18-19).
E. Excusable Neglect for Failure to File a Proof of Claim.
18. Neither Ms. Howard nor her counsel have filed a proof of claim in the AMF Bowling, Inc. bankruptcy. (Tr., p. 20, l. 22). Ms. Howard never received notice of the bar date for filing a proof of claim because AMF Bowling, Inc. incorrectly listed her address as 6301 Lawton, Las Vegas, Nevada, 89107. (Tr., p. 21, l. 19-23). AMF Bowling, Inc.'s Schedule F, admitted into evidence as Exhibit I, lists the incorrect address for Ms. Howard as she moved approximately three months following the accident that occurred on November 14, 1998. (Tr., p. 22, l. 20-21).
19. Counsel for AMF Bowling, Inc., filed its "Notice of Suggestion of Pendency of Bankruptcy and Automatic Stay of Proceedings" within the Nevada federal district court on August 13, 2001, indicating that AMF Bowling, Inc. had filed for bankruptcy protection and that the automatic stay prohibited continuation of the personal injury lawsuit. (Tr., p. 23, l. 19-22). The Court admitted this pleading into evidence as Exhibit J. (Tr., p. 24, l. 4).
20. Attached as Exhibit "A" to the Notice of Suggestion of Pending Bankruptcy filed by AMF Bowling, Inc. was a "Notice of Chapter 11 Bankruptcy Case, Meeting of Creditors Deadlines" for AMF Bowling Worldwide, Inc. (Case No. 01-61119-DOT). (Tr., p. 24, l. 19-23). AMF Bowling, Inc. further confused the parties and perpetuated the "misnomer" problem by providing notice of a bankruptcy filing by an entity that was not a party to the Nevada personal injury litigation.
21. Neither Ms. Howard nor her lawyers filed a proof of claim in the AMF Bowling Worldwide, Inc. bankruptcy. (Tr., p. 28 l. 18). To date, AMF Bowling Worldwide, Inc. is not named or joined as a party to the Nevada personal injury lawsuit.
F. Nevada Law Governs the Personal Injury Lawsuit.
22. Nevada law controls the personal injury lawsuit as it is where the injury occurred, where the Plaintiff resides and where the lawsuit was filed (and remains).
23. Nevada is a comparative negligence state. (Tr., p. 25, l. 22-23).
24. Nevada Revised Statute § 41.141 outlines the comparative negligence procedures in the state of Nevada. (Tr., p. 25, l. 15.) In Nevada, if there is no finding of negligence against the plaintiff, the plaintiff may recover jointly and severally against all defendants. However, if a plaintiff is determined to have contributed to the negligence, this creates several liabilities amongst the defendants and the plaintiff. (Tr., p. 26, l. 2-5). Once a plaintiff's comparative negligence becomes an issue in the lawsuit, NRS § 41.141 provides for several liability to be apportioned amongst the plaintiff and the various co-defendants. (Tr., p. 26, l. 16-21). Within the personal injury suit in Nevada, the co-defendants have raised contributory negligence as an affirmative defense which invokes the provisions of NRS § 41.141. (Tr., p. 27, l. 1-5).
G. AMF Bowling, Inc. is a Proper Party to the Lawsuit and the Plaintiff and Cross-Claimants Have a Probability of Success on the Merits of Their Claims.
25. Sales representatives of Stephen Gould, Larry Wolfe and Daniel McGee, met with Vince DeMarino and Patrick Connors of AMF Bowling, Inc.'s marketing department to discuss packaging designs for AMF's bowling balls. (Tr., p. 37, l. 1-5). Mr. Wolfe and Mr. McGee at all times thought they were dealing with representatives of AMF Bowling, Inc. (Tr., p. 37, l. 22; Tr., p. 45, l. 13-15.)
26. Representatives from Stephen Gould submitted several different designs for the bowling ball packaging to AMF Bowling, Inc. for their review and approval. AMF representatives rejected Stephen Gould's box designs that had "locking-tab" safety mechanisms because it would add cost and time to the manufacturing/packaging process. Vince DeMarino and Patrick Connors approved the final packaging design that was used for AMF's Night Hawk bowling ball. (Tr., p. 38, l. 19-24).
27. Stephen Gould designed the box to be used for the Night Hawk bowling ball to allow for automatic taping equipment to secure the top of the box. (Tr., p. 40-41, l. 24-25.) Stephen Gould shipped the boxes to Columbia Products, Inc. in Texas who actually manufactures the bowling balls and places them in the boxes provided by Stephen Gould. (Tr., p. 41 l. 6-12.) Stephen Gould does not package the bowling balls or oversee their packaging by Columbia Industries.
28. AMF Bowling, Inc. shares in any potential liability for Ms. Howard's injuries as the AMF Marketing Department approved the final product and box design for the Night Hawk bowling ball. (Tr., p. 39, l. 12).
H. AMF Bowling, Inc. Continues to Perpetuate the Misnomer Problem.
29. The AMF purchase order for 20,000 Night Hawk bowling ball boxes, admitted as Exhibit L, contains preprinted names bearing the "AMF Consumer Products" and "AMF Group, Inc." brand names. (Tr., p. 42, l. 1-3; Tr., p. 45, l. 24-25). The same purchase order contained written instructions to ship the packages to AMF Bowling, Inc. (Tr., p. 42, l. 11).
30. "AMF Bowling Products" was listed as the AMF entity on the actual box that contains AMF Night Hawk bowling balls. (Tr., p. 42, l. 16). The name AMF Bowling Products did not appear anywhere on the purchase order submitted to Stephen Gould for the 20,000 Night Hawk bowling ball boxes. (Tr., p. 42, l. 22).
31. The Stephen Gould shipping ticket, admitted into evidence as Exhibit M, indicates that AMF Bowling, Inc. received confirmation of a shipment of Night Hawk bowling ball boxes to Columbia, Inc. (Tr., p. 43, l. 25). No other AMF corporate names appear on this shipping ticket. (Tr., p. 44, l. 3).
32. AMF Bowling, Inc. and its numerous subsidiaries and affiliates have struggled with "misnomers" by the general public regarding AMF corporate names being interchanged on documents, contracts and insurance policies. (Tr., p. 64, l. 8-13). To the extent that a misnomer issue really exists, AMF employees contribute to the "misnomer" problem because they also use the improper AMF names/entities on documents, contracts, and insurance policies. (Tr., p. 64, l. 21-23).
I. Status of AMF Bowling, Inc. and its Subsidiaries
33. AMF Bowling, Inc. is a parent company that has numerous subsidiaries. (Tr., p. 55, l. 14-16). The two major subsidiaries under AMF Bowling, Inc. are AMF Holdings, Inc. and AMF Bowling Worldwide, Inc. (Tr., p. 55, l. 16-19). These entities also have filed for bankruptcy protection. AMF Bowling Products, Inc. (a subsidiary of AMF Bowling Worldwide, Inc.), the entity that AMF Bowling, Inc. belatedly claims is the proper co-defendant in Ms. Howard's personal injury lawsuit, also filed for bankruptcy protection. (Tr., p. 56, l. 2-7).
34. AMF Bowling, Inc. has no employees and does not have any operations. (Tr., p. 56, l. 19-21). Nevertheless, it hired local counsel in Las Vegas, Nevada to defend Ms. Howard's personal injury lawsuit.
35. AMF Bowling, Inc. has officers and directors insurance coverage. (Tr., p. 58, l. 1-2).
J. The Debtor Will Suffer No Hardship if Automatic Stay is Lifted.
36. AMF Bowling, Inc. presented no evidence that continuation of the Nevada personal injury lawsuit would (i) prejudice the estate, (ii) cause hardship, or (iii) delay the ongoing bankruptcy proceedings.
37. AMF Bowling, Inc. has filed a plan of liquidation and disclosure statement with the Court that currently is being amended. (Tr., p. 58, l. 15-20).
II. CONCLUSIONS OF LAW
A. The Movants Have Standing to Ask the Court to Lift the Automatic Stay Even Though Proofs of Claim Were Not Filed.
38. Stephen Gould and Ms. Howard, as creditors, have standing to petition the Court for relief from the automatic stay such that the Nevada personal injury lawsuit may continue against AMF Bowling, Inc. (the "Debtor").
39. The Code allows, but does not require, creditors of a debtor to file a proof of claim against the bankruptcy estate. See 11 U.S.C. § 501(a); In re Fernstrom Storage Van Co., 938 F.2d 731, 733 (7th Cir. 1991).
40. Failure by a creditor to file a proof of claim does not bar the creditor from recovering against the debtor's insurers or from maintaining an action against the debtor to establish liability that will be satisfied by a third party. In re Fernstrom, 938 F.2d at 733. See also In re Jet Florida Systems, 883 F.2d 970 (11th Cir. 1989); In re Turner, 55 B.R. 498 (Bankr.N.D.Ohio 1985).
41. A creditor's failure to file a proof of claim does not bar a subsequent action against the debtor in which the creditor only seeks a declaration of the debtor's liability. In re Fernstrom, 938 F.2d at 734.
42. In any event, any failure to file a proof of claim against the Debtor by the movants constituted excusable neglect and does not bar this request to lift the automatic stay.
B. Findings of "Cause" to Grant Relief Pursuant to § 362(d)(1)
(1) Determination of Cause Under the Code
43. Section 362(d) provides in pertinent part:
(d) On request of a party in interest and after notice and a hearing, the Court shall grant relief from the stay provided under sub-section (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay —
(1) for cause, including the lack of adequate protection of an interest in property of such property and interest.
44. "Cause" for granting relief from the automatic stay under § 362(d) is not defined within the Code and is determined on a case-by-case basis. In re Fernstrom, 938 F.2d at 735; In re Robbins, 964 F.2d 342, 345 (4th Cir. 1992); In re Robinson, 169 B.R. 356, 359 (E.D.Va. 1994).
45. A three-factor test has evolved to determine whether cause exists under § 362(d):
a. Will continuation of the civil suit cause great prejudice to the bankruptcy estate or the Debtor?
b. Does the hardship to the non-bankrupt party by maintaining the automatic stay considerably outweigh the hardship of the Debtor? and
c. Does the creditor have a probability of prevailing on the merits?
In re Fernstrom, 938 F.2d at 735 (citing In re Pro Football Weekly, 60 B.R. 824, 826 (N.D.Ill. 1986)).
46. In addition to balancing the hardship incurred by the party seeking relief from automatic stay and the potential prejudice to the Debtor, the bankruptcy courts also should weigh these factors:
a. Do the issues in litigation involve only state law?
b. Will modifying the stay promote judicial economy?
c. Will the bankruptcy case be disrupted? and
d. Can the estate be protected if the stay is lifted?
In re Granati, 271 B.R. 89, 93 (Bankr.E.D.Va. 2001); In re Robinson, 169 B.R. at 359.
(2) Burden of Proof to Establish Cause
47. The Debtor, as the party opposing the relief from stay, bears the burden of proof on all issues other than the Debtor's equity in property. See 11 U.S.C. § 362(g)(2). The burden of proving prejudice to the estate is thus on the Debtor and in the absence of such a showing the Debtor is not entitled to enjoin the relief sought. See Foust v. Munson Steamship Lines, 299 U.S. 77 (1936).
48. If the Debtor produces no showing that continuation of the civil suit would result in prejudice to the bankruptcy estate or to an effective reorganization, § 362(d) of the Code requires that the Court grant relief from the stay. In re Elliott, 25 B.R. 305, 308 (E.D.Va. 1982).
(3) No Prejudice to the Debtor if Stay is Modified
49. The Debtor will not be prejudiced if the stay is lifted to allow the Nevada personal injury lawsuit to proceed in federal district court.
50. The Debtor has failed to carry its burden under § 362(g)(2) for opposing the movants' request for relief from the automatic stay.
a. The Debtor presented no evidence that demonstrated potential prejudice or delay to the bankruptcy case if the stay was modified to allow the Nevada personal injury lawsuit to proceed.
b. The Debtor presented no evidence explaining its active participation in the lawsuit as AMF Bowling, Inc. or justifying how it would be prejudiced if the suit proceeds to trial. The Debtor failed to present evidence regarding (i) the anticipated costs of defending the lawsuit, (ii) whether any insurance policies of the Debtor would pay for defense costs, or (iii) whether participation in discovery and trial in Nevada would place a burden on its reorganization efforts.
51. In any event, "[w]hile the cost of defending in a civil action has been given serious consideration by bankruptcy courts, no case has found the costs of defending, by itself, to be `great prejudice' as to bar modification of the [§ 362] stay". In re Walker, 927 F.2d 1138, 1143 (10th Cir. 1991).
(4) Hardship to Movants if Stay is not Modified
52. When a stayed non-bankruptcy litigation has reached an advanced stage, courts have demonstrated a willingness to lift the stay to allow the litigation to proceed. In re Fernstrom, 938 F.2d at 737.
53. The Debtor has actively participated in the Nevada personal injury lawsuit and failed to alert any parties or the Court that it was an incorrectly named party. AMF Bowling, Inc. is a proper co-defendant in the Nevada personal injury lawsuit. The Debtor presented no evidence that AMF Bowling Products, Inc. (or another subsidiary or affiliate) was the party that distributed AMF Night Hawk bowling balls. Accordingly, the Debtor is estopped from asserting that it is the wrong party to the Nevada personal injury lawsuit.
54. The Debtor has actively participated in the lawsuit. The lawsuit has reached an advanced stage and trial is scheduled for September or October of 2002. The plaintiff and the other co-defendants will be prejudiced if the Debtor does not continue to participate in the personal injury lawsuit because the Debtor's failure to participate may cause the other parties to have to bear a disproportionate share of comparative negligence and several liability — if any.
(5) The Movants Have Demonstrated a Probability of Success on the Merits of the Personal Injury Suit.
55. Testimony provided my Mr. Wolfe, a sales representative from Stephen Gould, demonstrated that AMF marketing representatives actively participated in the design of the bowling ball box and that AMF made the ultimate decision on the box design and safety features.
56. AMF's instructions to Columbia Industries, Inc. regarding the manufacture and packaging of the Night Hawk bowling ball may establish a basis for potential shared or sole culpability for Ms. Howard's injuries.
57. Movants Stephen Gould and Ms. Howard have demonstrated that their claims against the Debtor have merit and that Nevada law allows for several liability to be apportioned amongst co-defendants in a comparative negligence case.
(6) Nevada Law and NRS § 41.141 Governs the Lawsuit.
58. The personal injury lawsuit initiated by Ms. Howard arises under Nevada law. Nevada Revised Statute § 41.141 provides for comparative negligence (if any) to be apportioned amongst the plaintiff and the co-defendants. Nevada tribunals are uniquely capable of trying this case and applying the provisions of NRS § 41.141.
59. Since Nevada law governs the underlying lawsuit, the U.S. District Court for Nevada is best suited to hear the case.
(7) Judicial Economy is Served by Modifying the Automatic Stay.
60. Since (i) Nevada law governs the personal injury lawsuit, (ii) the case has progressed well beyond the initial pleadings, and (iii) a trial date is set for September or October of 2002, the interests of judicial economy will be best served by allowing the lawsuit to proceed against AMF Bowling, Inc. in Nevada federal district court.
61. The Senate Report that accompanied the Bankruptcy Reform Act of 1978 stated that "[i]t will often be more appropriate to permit proceedings to continue in their place of origin, when no great prejudice to the bankruptcy estate would result, in order to leave the parties to their chosen forum and to relieve the bankruptcy court from many duties that may be handled elsewhere." In re Robbins, 964 F.2d at 345 (quoting S. Rep. No. 989, 95th Cong., 2d Sess. 50 (1978)).
(8) Equitable Considerations Favor the Movants.
62. A suspension or modification of the automatic stay is appropriate when equitable considerations weigh heavily in favor of the creditor "and the Debtor bears some responsibility for creating the problems." In re Fernstrom, 938 F.2d at 735.
63. Counsel for AMF Bowling, Inc. should have been aware of any misnomer problems with the lawsuit (if one exists) because counsel for Ms. Howard provided counsel for AMF Bowling, Inc. with a copy of the bowling ball box that clearly stated "AMF Bowling Products" on its side. AMF Bowling, Inc. is precluded from arguing that it is the incorrect defendant because (i) it failed to alert the court or other parties of any misnomer issues; (ii) it actively participated in the personal injury lawsuit by filing six separate pleadings — all in the name of AMF Bowling, Inc.; and (iii) it neglected to disclose other interested parties on its "Certificate as to Interested Parties" filed in accordance with Local Rule 135-5.
64. The Debtor is responsible for creating the misnomer problems because it (i) sent a letter to plaintiff's counsel on AMF Bowling, Inc. letterhead denying responsibility for Ms. Howard's injuries; (ii) filed six separate pleadings in the Nevada personal injury lawsuit on behalf of AMF Bowling, Inc.; (iii) failed to conduct due diligence as to the correct AMF entity even when presented with the actual box bearing the name "AMF Bowling Products"; (iv) submitted erroneous information about its bankruptcy status within its Notice of Suggestion of Bankruptcy; (v) issued pre-printed purchase orders containing two (2) separate AMF brand names — none of which are AMF Bowling Products; (vi) submitted a purchase order to Stephen Gould containing shipping instructions to "AMF Bowling, Inc."; and (vii) received shipping confirmations from Stephen Gould that the Night Hawk boxes were delivered to Columbia Industries in Texas. These actions by AMF Bowling, Inc. (i) constitute corporate operations that go far beyond those normally undertaken by a holding company with no employees or operations, and (ii) confused the public as to the identity and functions of the various AMF entities.
65. The equities of this case favor granting movants relief from the automatic stay as the Debtor clearly perpetuated the misnomer confusion and neglected to apprise the public, the movants or the courts of the true nature of AMF Bowling, Inc.'s corporate structure and functions.
III. RELIEF PURSUANT TO § 362(d)(1) GRANTED
66. Movants Stephen Gould and Ms. Howard have demonstrated sufficient "cause" under § 362(d)(1) of the Code. Accordingly, relief from the automatic stay is granted to allow the continued prosecution of the personal injury suit to proceed against AMF Bowling, Inc. in the U.S. District Court for Nevada.
ORDER GRANTING RELIEF FROM AUTOMATIC STAY
Upon the Motion for Relief From Automatic Stay (the "Motion") filed with the Court pursuant to Section 362(d) of the United States Bankruptcy Code (the "Code"), Fed.R.Bankr.P. 4001 and 9014 and Local Rules 4001(a)-1 and 5005(D)(3) by Stephen Gould Paper Company and joined by Melody Howard, Matthew Yarbrough and Columbia Industries (collectively, the "Movants");
Upon compliance with notice and other requirements of Fed.R.Bankr.P. 4001(a)(1) and Local Rule 4001(a)-1(E)(1) and (2);
Upon the final hearing before the Court on April 30, 2002, wherein the parties presented evidence and legal arguments pertaining to the relief requested in the Motion; It appearing that the Movants have demonstrated that they will suffer great prejudice and hardship if the Debtor does not continue to participate in the Nevada personal injury lawsuit that is before the U.S. District Court of Nevada and that the Debtor failed to demonstrate any hardship to the estate, its effective reorganization or the administration of this bankruptcy case should the automatic stay be modified; and
UPON GOOD CAUSE SHOWN,
IT IS ORDERED that relief from the automatic stay is hereby granted against the Debtor and that the Movants are authorized to proceed with the Nevada personal injury lawsuit before the U.S. District Court of Nevada (Case No. CV-S-00-1359-RLH (LRL)).