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In re Gander Partners LLC; In re Copper Peak Development Corporation; In re Prairie View Development Corporation jointly administered under case number 10 B 00887;Gander Partners LLC, et al v. Harris Bank, NA

10 B 08877, 10 B 08882, 10 B 08879, 10 A 00981

The court granted Debtors' motion for a preliminary injunction staying various lawsuits pending against Debtors' guarantors. Harris Bank, N.A. objected to the entry of a preliminary injunction and argued, among other things, that the court lacked "related to" jurisdiction based upon the Seventh Circuit's ruling in In re Teknek LLC, 563 F.3d 639 (7th Cir. 2009). The court overruled Harris' objection and determined that the Teknek ruling did not address the propriety of a bankruptcy court temporarily enjoining lawsuits against a debtor's guarantors. In the instant case each of the Debtors' guarantors, principals of the Debtors, testified at the hearing that they contribute significant amounts of time and money to the Debtors' reorganization effort, and that if the pending lawsuits were to continue their time, money and energy would no longer be available for the Debtors' reorganization efforts. Based upon this and rulings in Walsh v. Abrams, 45 B.R. 668 (Bankr. E.D.N.Y. 1985), Baptist Medical Center v. Singh, 80 B.R. 637 (Bankr. E.D.N.Y. 1987) and In re Philadelphia Newspapers, LLC, 407 B.R. 606 (E.D. Pa. 2009), the court found that the lawsuits pending against the Debtors' guarantors were sufficiently "related to" the bankruptcy cases because their resolution could hinder this court's ability to help the reorganization process by diverting funds necessary for a successful reorganization. The court enjoined Harris Bank from commencing or continuing any legal actions against the guarantors, including the pending lawsuits, for a period of 120 days through November 12, 2010.

Friday, July 16, 2010