IN RE: K-V Pharmaceutical Company Securities Litigation

Filing 84

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Lead Plaintiffs motion to lift the stay entered on Defendants as it applies to the non-bankrupt individual Defendants is GRANTED. IT IS FURTHER ORDERED that on or before February 22, 2013, the shall sub mit a Joint Scheduling Plan setting forth a pleading and briefing schedule that accords with the requirements of the Private Securities Litigation Reform Act of 1995 (PSLRA). The parties shall include in the Joint Scheduling Plan a timetable for hold ing a Scheduling Conference pursuant to Federal Rule of Civil Procedure 16. re: 71 MOTION to Lift Stay filed by Plaintiff Lori Anderson ( Joint Scheduling Plan due by 2/22/2013.) Signed by District Judge Audrey G. Fleissig on 2/12/13. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

IN RE K-V PHARMACEUTICAL
)
COMPANY SECURITIES LITIGATION )

No. 4:11CV01816 AGF

MEMORANDUM AND ORDER
This matter is before the court on Lead Plaintiff Lori Anderson’s motion (Doc.
No. 83) to lift a bankruptcy stay as it applies to non-bankrupt individual Defendants
Gregory Divis, Thomas McHugh, and Scott Goedeke. For the reasons set forth below,
the motion shall be granted.
DISCUSSION
Upon the filing of a notice of bankruptcy of Defendant K-V Pharmaceutical
Company, the Court entered a stay in this matter. As Lead Plaintiff now argues, a
bankruptcy stay cannot be extended against non-debtors “unless a case involves unusual
circumstances.” See Ritchie Capital Mgmt., L.L.C. v. Jeffries, 653 F.3d 755, 762 (8th
Cir. 2011). “The unusual circumstances in which the bankruptcy court can stay cases
against non-debtors are rare.” Id. Such circumstances “typically arise where there is
such identity between the debtor and the third-party defendant that the debtor may be said
to be the real party defendant and that a judgment against the third-party defendant will in
effect be a judgment or finding against the debtor.” Id. (citation omitted). Here,
Defendants have presented no unusual circumstances to extend the stay against the nonbankrupt individual Defendants.

Accordingly,
IT IS HEREBY ORDERED that Lead Plaintiff’s motion to lift the stay entered
on Defendants as it applies to the non-bankrupt individual Defendants is GRANTED.
IT IS FURTHER ORDERED that on or before February 22, 2013, the parties
shall submit a Joint Scheduling Plan setting forth a pleading and briefing schedule that
accords with the requirements of the Private Securities Litigation Reform Act of 1995
(“PSLRA”). The parties shall include in the Joint Scheduling Plan a timetable for
holding a Scheduling Conference pursuant to Federal Rule of Civil Procedure 16.

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 12th day of February, 2013.