U.S. District Court <\/p>\n
Where a debtor has filed a notice of appeal regarding the dismissal of its Chapter 11 bankruptcy case, the debtor\u2019s emergency motion to stay the dismissal order pending resolution of the appeal should be denied because the debtor has failed to establish a likelihood of success on the merits of its appeal.\n<\/p>\n
\u201cThe bankruptcy court offered two compelling reasons for dismissing the case. The first reason is that the debtor had \u2018ample time \u2026 to prove to the U.S. Trustee that there was builder\u2019s risk [insurance]\u2019 as required by 11 U.S.C. \u00a71112(b)(4)(c) but failed to do so. \u2026 After the U.S. Trustee established cause for dismissal, the burden shifted to the debtor to demonstrate unusual circumstances that would justify denying the motion to dismiss the case. \u2026 The debtor failed to meet this burden. The only evidence of adequate insurance that the debtor offered was weak. All that was offered was Mr. Correia\u2019s word and a copy of an insurance policy which itself does not contain an affirmative mention of \u2018builder\u2019s risk\u2019 coverage. \u2026 The fact that an insurance broker asserted in an email to Mr. Correia that \u2018builder\u2019s risk\u2019 coverage was in the policy without specific reference to the policy language was unconvincing in the circumstance. \u2026 The bankruptcy judge properly regarded such flimsy evidence insufficient to satisfy the debtor\u2019s burden.\n<\/p>\n
\u201cAdditionally, there are important procedural requirements that the debtor failed to satisfy, the omission of which constitutes another sufficient basis for denying the stay. First, the debtor did not follow Federal Rule of Bankruptcy Procedure 8007 and Local Rule 203.8007, which ordinarily require motions to stay to be filed first in the bankruptcy court except when doing so would be \u2018impracticable.\u2019 \u2026 Instead, the debtor filed its emergency motion for stay pending appeal directly in this Court, claiming the bankruptcy court\u2019s denial of its prior motions twice suggested that a third motion would probably be futile. Courts routinely reject similar arguments. \u2026\u201d<\/p>\n
In re Correia Contracting, LLC (Lawyers Weekly No. 02-038-25) (3 pages) (O\u2019Toole, J.) (Civil Action No. 24-cv-13097-GAO) (Jan. 29, 2025).<\/i>\n<\/p>\n
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