23 BK 16874, 24 AP 00020
After filing for bankruptcy, the subchapter V Debtor filed an adversary proceeding, seeking an injunction to stay a creditor from enforcing a state court judgment it obtained against the Debtor’s principal on a debt she guaranteed.  The court denied the Debtor’s Motion for Preliminary Injunction since the Debtor could not show the third-party litigation would defeat or impair this court’s jurisdiction and that the injunction sought would serve the public interest.

The court reasoned the state court judgment did not and could not impair this court’s jurisdiction, since the state court had denied the Creditor’s request to enter a finding pursuant to Illinois Supreme Court Rule 304(a).  The judgment against the principal could not be enforced or appealed until the resolution of all claims.  The action was stayed as to the Debtor (the borrower under the loan) upon it filing for bankruptcy relief.  The court reasoned the Debtor could show a likelihood of success on the merits, since, although it was early in the case, there were no apparent barriers to confirmation.  However, it could not show an injunction would serve the public interest because the Debtor did not need a stay, since the judgment against its principal could not presently be enforced.