National Medical Imaging, LLC v. Lyon Financial Services, Inc.
After the debtor-appellants filed Chapter 11 petitions mid-appeal, the appellee moved to stay the appeal under 11 U.S.C. § 362(a)(1), fearing that filing an answer brief would violate the automatic stay. The Third DCA denied the stay because it was bound by its 1982 decision in Shop in the Grove, which holds the automatic stay inapplicable where the debtor-defendant is the appellant, but the panel wrote separately to urge the court to recede from that precedent en banc.
Key facts
- National Medical Imaging, LLC and another debtor-appellant filed Chapter 11 bankruptcy petitions while their appeal was pending in the Third District Court of Appeal.
- The appellee, Lyon Financial Services, Inc., moved to stay the appeal, arguing that proceeding would violate the automatic stay under 11 U.S.C. § 362(a)(1).
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Why it matters
This opinion flags a live intra-Florida conflict on whether a bankruptcy automatic stay halts an appeal brought by the debtor, and warns counsel that federal bankruptcy courts are not bound by the Third DCA's reading of… — full analysis with a trial
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