Bankruptcy Stay May Apply to Claims

In an appeal from the general district court in an unlawful detainer action, the Richmond Circuit Court will stay defendant’s motion to consolidate defendant’s pending claims in another case with this case, pending determination of whether defendant’s claims are subject to the automatic stay in light of plaintiff’s bankruptcy filing.

The issue before the court is whether defendant’s pending claims against plaintiff in another case may be joined with this case. However, the court must first determine whether or not the defendant’s claims are subject to the automatic stay provision of 11 U.S.C. § 362.

Defendant asserts that its claims arose after plaintiff’s filing for bankruptcy protection and are therefore not subject to the § 362 automatic stay.

There is authority that stands for the proposition that a claim that arises post-petition may be treated as a pre-petition claim. Therefore, the court will stay defendant’s motion to consolidate cases, to continue hearing and to set trial date, until either the bankruptcy stay is no longer in effect or the defendant obtains relief from the § 362 automatic stay from the bankruptcy court.

Finally, plaintiff shall submit a brief detailing the authority under which it claims it may proceed with the underlying case in state court without permission of the bankruptcy court and the authority for the proposition that plaintiff’s prepetition claim, i.e., this case filed in the general district court prior to plaintiff’s bankruptcy filing, is not now property of the bankruptcy estate.

Hookup LLC v. Warehouse Stores Inc. (Hughes) No. CL 12-3048, Oct. 9, 2012; Richmond Cir.Ct.; John C. Ivins Jr., Steven S. Biss for the parties. VLW 012-8-202, 4 pp.