Warren Real Estate Holdings, Inc. v. Sinclair Construction Group, Inc. and Megaslab, Inc.

Summary

The United States District Court for the Western District of Oklahoma denies a request to extend the automatic bankruptcy stay applicable to Megaslab, Inc. to co-defendant Sinclair Construction Group, Inc. The Court holds that it has concurrent jurisdiction with the bankruptcy court to decide whether the stay should extend to a nondebtor co-defendant, but finds no unusual circumstances warranting an extension. The action will therefore proceed against Sinclair.

Holdings

1. The district court and the bankruptcy court possessed concurrent jurisdiction to determine whether the automatic stay could extend to a nondebtor codefendant.
2. The automatic stay was not warranted as to Sinclair because Sinclair and Megaslab were not so intertwined that a judgment against Sinclair would effectively be a judgment against Megaslab or affect Megaslab's reorganization.

Questions Presented

1. Whether the district court had jurisdiction to determine whether the automatic stay under 11 U.S.C. § 362 should be extended to a nondebtor codefendant.
2. Whether unusual circumstances warranted extending Megaslab's automatic bankruptcy stay to Sinclair.

Disposition

other