Bankr. E.D.N.C.: In re Robert Youngblood Construction Co.- No Co-debtor Stay under 11 U.S.C. § 362

Summary: The Youngbloods are guarantors of several loans between Youngblood Construction and BB&T.  Following the filing of the Chapter 11, Youngblood Construction brought a Motion to Extend Stay for the Youngbloods individually.

The Bankruptcy Court recognized that in “unusual circumstances” the Debtor and a third party may share such common identity that judgment against one may “in effect be a judgment or finding against the debtor.” Kreisler v. Goldberg, 478 F.3d 209, 213 (4th Cir. 2007) (citing A.H. Robins Co., v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986)).

In this case, however, the stay should not be extended to the Youngbloods, who could file their own bankruptcy and obtain the requested relief.  Further, as the lawsuits brought by BB&T were based on the Youngbloods’ individual guaranty agreements, the Youngbloods were not subjected to any additional liability and could seek recompense from Youngblood Construction.

Commentary: Strictly speaking, Youngblood Construction was seeking injunctive relief and this should, pursuant to Rule 7001, have been brought as an Adversary Proceeding.

For a copy of the opinion, please see:

Robert Youngblood Construction Co.- No Co-debtor Stay under 11 U.S.C. § 362.PDF

About

1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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