Grady et al v. Federal Deposit Insurance Corporation et al

Filing 84

ORDER denying without prejudice the 82 Motion to Exonerate Bond; the parties shall file a status report by 11/1/12, advising whether the Trustee will be substituting in as the Plaintiff and whether the parties anticipate the claims in this case ultimately being resolved within the bankruptcy proceeding. Signed by Judge James A Teilborg on 8/24/12.(REW)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 ) ) ) Plaintiffs, ) ) vs. ) ) Bank of Elmwood; Elmwood Financial) Corporation; Jonathan Levin; Sarah Levin,) ) ) Defendants. _________________________________ ) ) Tri City National Bank, ) ) Counterclaimant, ) ) vs. ) ) Michael Grady and Jennifer Grady, ) ) Counterdefendant. _________________________________ ) The Federal Deposit Insurance) Corporation as Receiver for Bank of) ) Elmwood, ) ) Intervenor. ) Michael Grady; Jennifer Grady, No. CV 11-2060-PHX-JAT ORDER 23 24 On August 18, 2012, Plaintiffs filed a notice of filing bankruptcy. (Doc. 83). 25 Generally, the automatic stay provisions of the bankruptcy code do not apply to proceedings 26 initiated by the debtor, as is the case here. See Martin-Trigona v. Champion Federal Savings 27 & Loan, 1988 WL 46596, *2 (N.D. Ill. 1988); In re Hill, 39 B.R. 894, 897 (Bkrtcy. Or., 28 1 1984).1 Thus, the Court confirms all outstanding deadlines in this case. However, the 2 pending motion to exonerate bond and to distribute proceeds may involve property of the 3 bankruptcy estate; accordingly, the Court will treat that motion as subject to the stay and 4 deny it, without prejudice. 5 Based on the foregoing, 6 IT IS ORDERED denying the motion to exonerate bond (Doc. 82), without 7 prejudice. 8 IT IS FURTHER ORDERED that the parties shall file a status report by November 9 1, 2012, advising whether the Trustee will be substituting in as the Plaintiff and whether the 10 parties anticipate the claims in this case ultimately being resolved within the bankruptcy 11 proceeding. 12 DATED this 24th day of August, 2012. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 But the cause of action is the property of the estate. Turner v. Cooke, 362 F.3d 1219, 1225-26 (9th Cir. 2004); Cusano v. Klien, 264 F.3d 936, 945 (9th Cir. 2001). -2-

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