SEC v. Black, et al
Filing
243
OPINION and Order signed by the Honorable William T. Hart on 11/6/2012. (np, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
CONRAD M. BLACK and
HOLLINGER, INC.,
Defendants.
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No. 04 C 7377
OPINION AND ORDER
On October 10, 2012, a judgment for injunctive relief and monetary relief
in a total amount of $6,131,909.50 was entered against defendant Conrad Black.
The judgment is based on the estoppel effect of certain civil and criminal
judgments against Black. See SEC v. Black, 2012 WL 4856196 *1 (N.D. Ill.
Oct. 9, 2012). As to the related federal criminal case, Black currently has pending
a fully briefed § 2255 motion collaterally attacking his remaining convictions.
See Black v. United States, 12 C 4306 (N.D. Ill.). If the § 2255 motion is
successful, Black would likely be able to vacate or modify the monetary judgment
in the present case. See Fed. R. Civ. P. 60(b)(5). Black has moved for a stay of
execution of the monetary judgment pending resolution of his § 2255 motion in the
related criminal case.
Federal Rule of Civil Procedure 62(b) applies to stays of execution when
certain postjudgment motions are pending in the case, including Rule 60(b)
motions. That Rule does not apply to the present case because there is no pending
Rule 60(b) motion in the present case. See Katz v. Feinberg, 2001 WL 1132018
*2 (S.D.N.Y. Sept. 24, 2001). The parties agree that this court nevertheless has
inherent authority to consider a stay of execution of the judgment in this case. Id.;
Revolution Eyewear, Inc. v. Aspex Eyewear, Inc., 2009 WL 2047635 *2
(C.D. Cal. July 8, 2009). The burden is on Black to establish that he is entitled to
the stay. While the Rule 62(b) standard does not directly apply, it is instructive
and will be followed. See Katz, 2001 WL 1132018 at *2-3; Revolution Eyewear,
supra.
Factors to consider include: "(1) whether the stay applicant has made a
strong showing that he is likely to succeed on the merits; (2) whether the applicant
will be irreparably injured absent a stay; (3) whether issuance of the stay will
substantially injure the other parties interested in the proceeding; and (4) where the
public interest lies." FTC v. QT, Inc., 472 F. Supp. 2d 990, 997 (N.D. Ill. 2007),
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aff'd, 512 F.3d 858 (7th Cir. 2008) (quoting Hilton v. Braunskill, 481 U.S. 770,
776 (1987)). See also Katz, supra; Revolution Eyewear, supra. Additionally, the
weight of authority and the policy behind Rule 62(b) go against granting unsecured
stays of execution; the burden is on the proponent of the stay to establish that it
would be appropriate to grant a stay without requiring security. See Slip N' Slide
Records, Inc. v. Teevee Toons, Inc., 2007 WL 1489810 *2 (S.D. Fla. May 18,
2007); In re Calisoff, 92 B.R. 357, 359 (Bankr. N.D. Ill. 1988); Real View, LLC v.
20-20 Techs., Inc., 2011 WL 3568022 *2-4 (D. Mass. Aug. 12, 2011); Pruett v.
Skouteris, 2011 WL 282435 *7-8 (W.D. Tenn. Jan 6, 2011), mag. j. report
adopted, 2011 WL 282425 (W.D. Tenn. Jan 25, 2011); Lewis v. United Joint
Venture, 2009 WL 1654600 *1-2 (W.D. Mich. June 10, 2009); Am. Family Mut.
Ins. Co. v. Miell, 2008 WL 746604 *1-2 (N.D. Iowa March 19, 2008). Compare
also Horina v. City of Granite City, Ill., 2007 WL 4068123 *1 (S.D. Ill. Nov. 15,
2007), modified on other grounds, 538 F.3d 624, amended, 548 F.3d 1107 (7th Cir.
2008) (Rule 62(f)).
It is unnecessary to expressly address all possible factors since two
factors weigh heavily against granting Black's motion. First, Black has made no
attempt to show that his § 2255 motion is likely to succeed on its merits.
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The other problem is that Black contends he should not be required to
post a supersedeas bond during the pendency of a stay. Black points to the fact
that the September 2006 order of the Ontario Superior Court places limits on his
use of assets in order to prevent dissipation of his assets prior to the entry of
judgments in two cases pending in that Canadian court. Apparently the two
Canadian cases are still pending, though Black does not expressly state that they
are. Also, the precise contours of that order have not been disclosed since the
order that is provided incorporates the terms of an undisclosed confidential
agreement between the parties in those cases. Black represents that it is unknown
whether he could obtain a supersedeas bond since he would have to seek
permission to do so from the Ontario court. The corollary implication of that
representation, though, is that Black also does not know whether he would be able
to obtain funds to satisfy the monetary judgment that has been entered in this case.
Possible inability to satisfy a judgment is good reason to deny a stay or require a
bond. Cf. Lewis, 2009 WL 1654600 at *1 ("UJV's purported inability to post a
bond does not in any conceivable way show that Plaintiff's interest in the full value
of the judgment is secure. In fact, it shows just the opposite. UJV's alleged
illiquidity strengthens, not weakens, the need for an appropriate bond."). In this
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circumstance, the SEC should not be precluded from attempting to collect the
judgment that has been entered.
IT IS THEREFORE ORDERED that defendant Conrad Black's motion
for stay of execution of monetary judgment [238] is denied.
ENTER:
UNITED STATES DISTRICT JUDGE
DATED: NOVEMBER 6, 2012
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