In Re: Douglas Joseph Heitmeier Debtor-In-Possession

Filing 18

ORDER & REASONS denying 14 Motion to Stay. Signed by Judge Martin L.C. Feldman on 2/26/2014. (caa, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN RE:

DOUGLAS JOSEPH HEITMEIER,

CIVIL ACTION

DEBTOR-IN-POSSESSION

NO. 13-6787
SECTION “F”
ORDER AND REASONS

Douglas Heitmeier filed in bankruptcy under Chapter 11 on May
13, 2013.
land

Whitney Bank is a creditor, secured by two parcels of

located

Mississippi.

at

201

and

202

County

Farm

Road,

Lumberton,

On July 10, 2013, Whitney Bank filed a motion for

relief from the automatic stay. On October 18, 2013, the bankruptcy
court granted the motion, finding that Heitmeier has no equity in
the properties and that they are not needed for an effective
reorganization.
On November 1, 2013, Heitmeier filed a Notice of Appeal.

He

also filed a motion to stay order pending appeal in the bankruptcy
court, which Whitney Bank opposed.

At a hearing on the motion on

November 22, 2013, the bankruptcy court denied relief, finding that
a stay was not warranted because Heitmeier would not suffer
irreparable harm, he would not be successful on appeal, it would
not serve the public interest, and it would cause Whitney Bank
prejudice.

Heitmeier now moves this Court to stay the bankruptcy

court's order granting Whitney Bank's motion for relief from the

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automatic stay pending the outcome of the appeal.
I.
A stay pending appeal is an “extraordinary remedy.”

Belcher

v. Birmingham Trust Nat’l Bank, 395 F.2d 685, 686 (5th Cir. 1968).
A party seeking a stay pending appeal generally must establish four
factors: (1) likelihood of success on the merits; (2) irreparable
injury if the stay is not granted; (3) absence of substantial harm
to the other parties from granting the stay; and (4) service to the
public interest from granting the stay. Hunt v. Bankers Trust Co.,
799 F.2d 1060, 1067 (5th Cir. 1986).

Each part of the four-part

test must be met; however if the appeal involves a “serious legal
question” and “the balance of the equities weighs heavily in favor
of granting the stay,” then the appellant, here Heitmeier, need
only present a substantial case on the merits rather than show a
probability of success on the merits.
426, 438-39

(5th Cir. 2001).

Arnold v. Garlock, 278 F.3d

Notably, “[l]ikelihood of success

remains a prerequisite in the usual case even if it is not an
invariable requirement.”

Ruiz v. Estelle, 666 F.2d 854, 857 (5th

Cir. 1982).
II.
Without expressing any view on the ultimate merits of the
appeal, this Court finds that Heitmeier fails to establish the
factors necessary to warrant a stay.

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A. Likelihood of Success/Substantial Case on the Merits
Heitmeier urges this Court to apply the “substantial case on
the merits” standard, arguing that this appeal involves serious
issues of law and that the balance of the equities weighs heavily
in favor of a stay.

Regardless of which test applies, the Court

finds that Heitmeier fails to meet either standard.

Heitmeier

merely lists the issues to be presented on appeal and summarily
contends that they are serious, without providing any evidence or
argument in support of that contention or showing any likelihood of
success on the merits.

The Court finds that Heitmeier fails to

satisfy his burden with respect to the first factor.
B. Irreparable Injury
Heitmeier also fails to establish irreparable injury if the
Court does not issue a stay.

Although Heitmeier correctly asserts

that, without a stay, Whitney Bank will be allowed to foreclose on
the properties, one of which is his residence, he fails to mention
that he would have to either sell or refinance the properties in
order to support the reorganization plan anyway.

Moreover, if

Heitmeier is successful on appeal, he will be able to recover any
funds

from

creditors.

the

foreclosure

from

Whitney

for

distribution

to

Heitmeier fails to persuade the Court that he will

suffer irreparable injury.
C. Harm to Other Parties
Heitmeier argues that Whitney Bank will not be harmed by a

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stay because the debt will still be owed and interest will continue
to accrue, and Whitney can always foreclose on the property after
the appeal.

The Court is not persuaded.

Granting a stay would

substantially harm Whitney by delaying its ability to reduce the
indebtedness.

Allowing Heitmeier to continue to use the property

without making payments works directly to Whitney Bank's detriment.
D. Public Interest
The Court also finds that granting the stay would not serve
the public interest.

Whitney correctly asserts that allowing

Heitmeier to live on and use 80 acres without paying his mortgage
does not serve the public interest.

Although Heitmeier contends

that

served

the

public

interest

will

be

because,

if

he

is

successful on appeal, his unsecured creditors will be paid the
value of 202 County Farm Road minus the homestead exemption,
Heitmeier neither explains nor offers any evidence to support this
contention, and, regardless, the record establishes that any value
would go toward payment of the secured creditors.
III.
Finally, the Court notes that Heitmeier has not complied with
Federal Bankruptcy Rule 8005, which provides that a party moving
the district court to stay the bankruptcy court's order pending
appeal "shall show why the relief . . . was not obtained from the
bankruptcy judge."

Heitmeier admits that the bankruptcy court

denied his motion to stay pending appeal, but entirely fails to

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show why.
Accordingly, the motion to stay is DENIED.
New Orleans, Louisiana, February 26, 2014
_______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

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