23 B 6782
Debtor IYS Ventures, LLC filed an adversary proceeding seeking to determine the validity, extent and priority of certain secured claims, including a claim filed by Eby-Brown Company, LLC.  Eby-Brown took the position that its claim was secured even though it had not filed a financing statement.  After trial, the court held that Eby-Brown did not hold a perfected lien securing its debt and that its interest was unsecured.  Debtor then filed a motion requesting imposition of sanctions under Fed. R. Bankr. P. 9011 and 11 U.S.C. § 105, and costs, expenses and attorneys’ fees under 28 U.S.C. § 1927.  HELD: Motion denied.  First, Debtor did not comply with the safe harbor requirements of Rule 9011.  Even if it had done so, Debtor waited too long to file the motion for sanctions.  Although Eby-Brown had not produced documents in response to Debtor’s requests for production, Debtor made the tactical decision not to pursue compliance with its discovery requests.  Finally, even if the motion had been timely, sanctions were not warranted under either Rule 9011 or 28 U.S.C. § 1927.  Although it did not prevail at trial, Eby-Brown advanced credible arguments in support of its position.