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Key highlight: ...motion fails to satisfy any of the four factors that determine whether a stay should be granted.3 Fed. R. Bankr. P. 8007(e) permits a bankruptcy court to stay proceedings during the pendency of an appeal. In determining whether to do so, courts consider the following factors: (1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will suffer irreparable injury unless the stay is granted; (3) whether granting the stay will result in substantial harm to the other parties to the appeal; and (4) the effect of granting the stay upon the public interest. Lang v. Lang (In re Lang), 305 B.R. 905, 911 (B.A.P. 10th Cir. 2004). The burden is on the party seeking the stay to show that one is justified. See In re Stewart, 604 B.R. 900, 905 (Bankr. W.D. Okla. 2019) (quoting Nken v. Holder, 556 U.S. 418, 427 (2009)).

 

Because Tarpenning fails to satisfy the second factor of the test and has made no showing as to the other three, he has not satisfied his burden of showing that a stay is justified here. His motion for a stay pending appeal is therefore denied.

Summary: Following the appointment of a Receiver under the North Carolina Commercial Receivership Act, N.C.G.S. §507.20 et seq., to conduct an orderly liquidation process of Mafic, the Receiver objected to several proofs of claims. The North Carolina Business Court turned to Bankruptcy Code for guidance regarding the burden of proof necessary to determine the reasonableness or validity of a claim accepted or rejected by a Receiver.

 

Commentary: It will be interesting to watch as the North Carolina state courts, particularly the business court, develop a set of practices and a corpus of law interpreting and applying the NCCRA to see whether this leads to more cases of business liquidation being handled in this manner than under the Bankruptcy Code. Whether those developments might lead to a relaxation of, as Chapter 11 attorneys often bemoan in their less guarded moments, how they feel bankruptcy in North Carolina can often be overly punctilious and draconian is an open question. Further, a growing comfort with state court receiverships might lead creditors on the consumer side to also turn there for an effective means of judgment collection.