National Physicians Holding Company et al v. Middlebury Equity Partners LLC et al

Filing 78

ORDER granting 77 Motion to Stay. Stay will remain in effect until 9/6/2010. Ordered by Judge Hugh Lawson on 8/3/2010. (nbp)

National Physicians Holding Company et al v. Middlebury Equity Partners LLC et al

Doc. 78

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF GEORGIA V AL D O S TA DIVISION N ATIO N AL PHYSICIANS HOLDING C O M P AN Y , et al., : : : P la in t if f s , : : v. : : M ID D L E B U R Y EQUITY PARTNERS, : L L C , et al., : : : D e fe n d a n ts . _______________________________ : ORDER B e fo re the Court is the parties' Consented-To Motion for Stay (Doc. 77). The p a rti e s have agreed that the proceedings in this case should be stayed for thirty d a y s and that all discovery deadlines are to be tolled. They also agree to schedule d e p o s i ti o ns for September, in anticipation that the case will resume then. I. B AC K G R O U N D T hi s is a securities case. The Court has been informed that Defendant, Todd M i c ha e l Enright ("Mr. Enright"), recently filed a petition for bankruptcy. However, Mr. E nri g ht has not filed in this Court notice of his bankruptcy filing. The complaint states tha t Mr. Enright is the managing member and agent for Defendant Middlebury Equity P a rtne rs , LLC, ("Middlebury") (Compl. ¶ 8). On July 29, 2010, the attorneys for Mr. Enright and Middlebury sought leave to withdraw (Doc. 74). The attorneys asserted in their motion to withdraw that Mr.

C ivil Action No. 7 :0 9 -C V -2 1 (HL)

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Enright will file an adversary proceeding complaint in the bankruptcy court re q ue s ti ng an injunction to stay all claims against Middlebury. On July 30, 2010, the Court had a status conference with the attorneys for Mr. E nri g ht and Middlebury. The status of the bankruptcy case was discussed as were the reasons for the attorneys' request to withdraw. The attorneys agreed to speak w i th the Plaintiffs to determine whether they would agree to a temporary stay of the case. II. D IS C U S S IO N A district court has broad discretion to stay proceedings as an incident to its p o w e r to control the cases on its own docket. Landis v. North American Co., 299 U .S . 248, 254, 57 S. Ct. 163 (1936). Although no bankruptcy notice has been filed in this case, the Court has been i nfo rm e d that Mr. Enright has filed for bankruptcy and that he wishes to have the b a nk rup tc y court stay this case against Middlebury. Title 11 U.S.C. § 362(a)(1) p ro v i d e s that all judicial proceedings against the debtor are automatically stayed. The statute, however, does not automatically stay judicial proceedings against no nb a nk rup t third parties or codefendants. See e.g., In re S.I. Acquisition, Inc., 817 F .2 d 1142, 1147 (5th Cir. 1987). In unusual circumstances courts may extend the a uto m a ti c stay to nondebtor codefendants. McCarney v. Integra Nat. Bank North, 1 0 6 F.3d 506, 510 (3d Cir. 1997). Bankruptcy courts also have the authority to

i s s ue injunctions against judicial proceedings involving nondebtors if unusual 2

circumstances are met. 11 U.S.C. § 105(a) (a bankruptcy court has authority to "i s s ue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title); see also Matter of Zale Corp., 62 F.3d 746, 761 (5th Cir. 1 9 9 5 ). The Court believes that a temporary stay of thirty days will provide Mr. Enright e no ug h time to make pleadings in the bankruptcy court asking for a stay of all j ud i c i a l proceedings involving Middlebury. Thirty days will also provide Mr. Enright ti m e to explore the possibility of hiring new counsel. A s Plaintiffs have consented to the stay, the Court is not concerned about p re j ud i c e to Plaintiffs because of the stay. The Defendants are ordered, however, t o schedule depositions for September. The stay will remain in effect until

S e p te m b e r 6, 2010 absent the Court granting a motion to continue the stay. Once the stay is lifted, the Court will amend the Scheduling and Discovery Order to reflect the changed discovery and motions deadlines. S O ORDERED, this the 3 rd day of August, 2010. s / Hugh Lawson HUGH LAWSON, SENIOR JUDGE lm c

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