Law Enforcement Officers Union v. United Federation LEOS-PBA - Stay Pending Appeal Denied

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April 17, 2026 Get Citation Alerts Download PDF Add Note

In re: Law Enforcement Officers, Security Union v. United Federation LEOS-PBA, et al.

United States Bankruptcy Court, W.D. Pennsylvania

• Citations: None known
• Docket Number: 24-70277

• Precedential Status: Unknown Status

• Opinion

• Authorities (25)

• Cited By (0)

• Summaries (0)

• Similar Cases (91.1K)

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Trial Court Document

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE: ) Bankruptcy No. 24-70277-JAD
)
LAW ENFORCEMENT OFFICERS, ) Chapter 7
SECURITY UNION, )
) Related to ECF No. 160
Debtor. )
___________________________________ X
)
UNITED FEDERATION LEOS-PBA, )
et al. )
)
Movants, )
)
-v- )
)
LAW ENFORCEMENT OFFICERS, )
SECURITY UNION AND )
INTERNATIONAL UNION, )
SECURITY, POLICE AND FIRE )
PROFESSIONALS OF AMERICA, )
)
Respondent. )
___________________________________ X

MEMORANDUM OPINION

The matter before the Court consists of the Motion for Stay Pending Appeal
Pursuant to Bankruptcy Rule 8007 (the “Motion,” ECF No. 160), filed by United
Federation LEOS-PBA; LEOS-PBA; PROA; NUSPO; UFSPSO; United Federation
K9 Handlers; LEOSU-DC; LEOSU-VA; FPSOA; NUNSO; EOSU-CA; SPSOA;
PSONU; LEOSPU; United Federation LEOS-PBA Hawaii, Guam, Saipan, and
American Samoa; and Jean-Giles Brikener d/b/a Brik Unlimited LLC
(collectively, the “Movants”). The Motion seeks a stay pending appeal of this
Court’s Order of Court (ECF No. 141) approving the Trustee’s1 sale of certain
estate causes of action to the International Union, Security, Police and Fire
Professionals of America (“SPFPA”) and the Court’s related Order (ECF No. 139)
denying the Trustee’s previously proposed settlement.

The Motion is met with opposition by the Trustee and SPFPA. See Trustee’s
Response to Motion to Stay Pending Appeal Pursuant to Bankruptcy Rule 8007
(“Trustee’s Response”), ECF No. 174; Response of the International Union,
Security, Police and Fire Professionals of America (SPFPA) to Movants' Motion For
Stay Pending Appeal Pursuant to Bankruptcy Rule 8007 (“SPFPA Response”), ECF
No. 176. The Trustee and SPFPA each contend that the Movants have failed to
satisfy the standards governing a stay pending appeal, that the Movants lack
standing to challenge the sale in the first instance, and that this Court’s prior

rulings are firmly grounded in the record, the Bankruptcy Code, and controlling
precedent.
For the reasons set forth below, the Court finds that the Motion is without
merit and shall be denied.
I.
JURISDICTION

This Court has subject-matter jurisdiction over this matter pursuant to 28
U.S.C. § 1334, which vests district courts with original and exclusive jurisdiction
over all cases under title 11 and original, but not exclusive, jurisdiction over all
civil proceedings arising under title 11, or arising in or related to cases under

1 Eric E. Bononi, Esq., in his capacity as Chapter 7 Trustee (the “Trustee”).
title 11. By standing order of reference entered in this District, such jurisdiction
has been referred to the bankruptcy judges of this Court pursuant to 28 U.S.C.
§ 157 (a).2
The matter presently before the Court constitutes a core proceeding under 28 U.S.C. § 157 (b)(2). More specifically, the Motion concerns the administration
of the bankruptcy estate, the approval and implementation of a sale of estate
property under 11 U.S.C. § 363, and the enforcement of this Court’s prior orders,
all of which fall within the scope of 28 U.S.C. § 157 (b)(2)(A), (N), and (O). As such,
this Court has the statutory authority to hear and determine the Motion on a
final basis.
II.
BACKGROUND

This bankruptcy case was commenced on July 8, 2024, when the Debtor,
Law Enforcement Officers Security Union, filed a voluntary petition for relief
under chapter 7 of the Bankruptcy Code. Upon the filing of the petition, Eric E.
Bononi, Esq. was duly appointed as the Chapter 7 Trustee and charged with
administering the estate in accordance with his statutory duties under 11 U.S.C.
§ 704.
Among the assets identified by the Trustee (and by one of the estate’s
principal creditors, SPFPA) are certain claims and causes of action, including
potential avoidance claims and related theories. These claims constitute property

2See Order of Reference of Bankruptcy Cases and Proceedings Nunc Pro Tunc (W.D. Pa. Oct. 16, 1984),
available at https://www.pawd.uscourts.gov/sites/pawd/files/general-
orders/bankruptcystandingorder.pdf .
of the estate and represent a potentially significant source of recovery for
creditors.
Among those creditors is SPFPA, which has filed a proof of claim in the
amount of $2,296,688.20. See Amended Claim No. 3-2.3 Other creditors include

Mr. David L. Hickey, who has filed a claim in the amount of “[a]t least
$2,658,337.67” (Claim No. 2-1), and Mr. Joseph McCray, who has filed a claim
in an amount of “[a]t least $1,000,000.00” (Claim No. 1-1).
Mr. Hickey and Mr. McCray are affiliates of SPFPA. Each of the claims
asserted by SPFPA, Hickey, and McCray arise out of alleged tortious conduct by
the Debtor and its president, Mr. Steven Angelo Maritas. A summary of the
underlying litigation and resulting judgments is of record and is attached to the
Court Ordered Third Status Report docketed at ECF No. 145. The pecuniary stake

that these creditors hold in the disposition of the estate’s causes of action is
therefore direct and substantial.
Unlike the Trustee, who necessarily operates within the slim financial
constraints typical of a chapter 7 estate, SPFPA has represented that it possesses
the necessary resources to investigate and prosecute the estate’s claims
vigorously. The record further reflects that SPFPA contends that there are at
least $1.8 million in potentially avoidable transfers. See The SPFPA's Objection to

the Motion to Approve Settlement ¶¶ 8-15, 22 & Ex. 14, ECF No. 99.

3 The proofs of claim filed in this case are located on the Claims Register accessible via the Court’s CM/ECF
system.
Following his appointment, the Trustee undertook an investigation into
the Debtor’s financial affairs, including an examination of prepetition transfers
and transactions involving the Debtor and affiliated entities and individuals.
That investigation included the retention of a forensic expert and culminated in

mediation with the Movants. Notably, however, as acknowledged by the Movants
on the record at the January 20, 2026 hearing, SPFPA was not invited to
participate in that mediation, notwithstanding SPFPA’s status as the estate’s
largest creditor at that time4 and its ability to pursue the causes of action in a
manner the estate itself could not. See Transcript of Jan. 20, 2026 Hr’g (“Jan.
20 Tr.”) 9:17-24, ECF No. 177. The Court observes that, had the objective been
a comprehensive economic resolution, the estate’s principal creditor (and its
affiliates) should have been included in the negotiations. Instead, the record

suggests an effort to secure a broad release from a resource-constrained Trustee
without the participation of the creditors whose recovery interests were (and are)
most directly affected.
The mediation without the participation of SPFPA ultimately resulted in a
proposed “settlement” pursuant to which the Movants agreed to pay $140,000
to the estate in exchange for a broad release of claims held by the estate against
them (the “Proposed Settlement”). See Motion to Approve Settlement (“9019

Motion”) ¶ 9, ECF No. 92. On October 7, 2025, the Trustee filed a motion under

4 SPFPA originally filed a proof of claim on December 31, 2024 in the amount of “[a]t least $3,658,337.67.”
Claim 3-1 ¶ 7. SPFPA recently amended its claim on March 13, 2026 to $2,296,688.20. Amended Claim 3-
2.
Federal Rule of Bankruptcy Procedure 9019 seeking approval of the Proposed
Settlement (i.e. the 9019 Motion).
SPFPA timely objected to the 9019 Motion, arguing, among other things,
that the Proposed Settlement was economically inadequate and would extinguish

potentially valuable causes of action for a sum that failed to reflect their possible
value. Stated in other words, the economic disparity between the competing
positions became the central issue in the case. SPFPA maintained that
investigation had identified approximately (or at least) $1.8 million in potentially
avoidable transfers, while the Proposed Settlement would have extinguished all
such claims for $140,000. The Court does not determine at this juncture whether
SPFPA’s valuation will ultimately prove correct. However, the record made clear
that the estate’s causes of action against the Movants could not responsibly be

treated as trivial or conclusively resolved by a settlement negotiated in the
absence of the estate’s principal creditor.
The Court conducted a hearing on the 9019 Motion on January 20, 2026.
During that hearing, the Trustee indicated that SPFPA had presented a
competing proposal, offering to purchase the estate’s causes of action for
$145,000, which exceeded the Proposed Settlement by $5,000. Jan. 20 Tr. 3-4.
The emergence of this higher and better offer materially altered the posture

of the case. The Trustee advised the Court that he would proceed by way of a
sale motion rather than continue to pursue approval of the Proposed Settlement.
The Court emphasized that a chapter 7 trustee’s duty is to maximize value for
creditors and that a pathway yielding greater recovery warranted pursuit. The
Court further noted that, if the matter proceeded as a sale, the process could be
structured to allow for an auction with competitive bidding.
Thereafter, on January 23, 2026, the Trustee filed a motion to sell the
causes of action to SPFPA pursuant to 11 U.S.C. § 363 (b) & (f) (the “Sale Motion,”

ECF No. 127). The Sale Motion proposed a transaction valued at $145,000 plus
remittance to the estate of any net recoveries obtained through prosecution of
the causes of action, thereby undisputably guaranteeing a minimum recovery
greater than that offered under the Proposed Settlement while at the same time
preserving the potential for substantially greater recoveries for the estate. See
Sale Motion ¶ 7 & Ex. 1 ¶5.
Notice of the proposed sale and any related auction procedures was served
upon all parties on the mailing matrix, and the Trustee duly advertised the sale

in accordance with this Court’s Local Bankruptcy Rules, including publication
on the Court’s EASI website and in the Indiana Gazette and Indiana Law Journal.
Despite having participated in the earlier mediation process and being fully
aware of the competing sale, the Movants did not submit a competing higher bid
or otherwise seek to improve upon SPFPA’s proposal.
Instead, the Movants filed an objection to the Sale Motion, briefly and
generically asserting that SPFPA was not a good faith purchaser and that the

proposed sale was otherwise improper. See Objection and Reservation of Rights
to Motion to Sell Property Free and Divested of Liens and Encumbrances (the
“Objection to Sale”), ECF No. 134. The Objection to Sale, however, did not
articulate any facts suggesting that the sale process itself was tainted. It
contained no allegations of fraud, collusion, duress, improper influence, or any
other misconduct on the part of the Trustee or the purchaser that tainted the
sale itself. Nor did it assert that the procedures employed by the Trustee chilled
bidding or otherwise impaired the fairness of the process.

Rather, the Objection to Sale rested solely on generalized and understated
assertions not relevant to the sale process. In this regard, the Movants suggested
that SPFPA is a rival labor organization to the Debtor (and certain of the Movants)
and raised vague concerns regarding the potential confidentiality of records, and
in this regard referenced unspecified obligations under labor law. These
assertions were neither supported by citation to any legal authority nor tied to
any provision of the Sale Motion or the proposed transaction. As such, the face
of the objection failed to provide a cognizable challenge to the integrity of the sale

process or to the Trustee’s exercise of his business judgment.
These deficiencies in the objection are further informed by the Movants’
posture in the case. The Movants are insiders of the Debtor and are among the
primary targets of the very causes of action being sold. Their interests are
therefore not aligned with maximizing value for the estate, but instead with
minimizing or avoiding their own potential exposure. That context appropriately
frames the Court’s consideration of their objection.

The Court conducted a hearing on the Sale Motion and the 9019 Motion
on February 24, 2026. At that hearing, the Trustee confirmed that SPFPA’s
proposal constituted the highest and best offer available to the estate and that,
in his business judgment, the sale transaction was superior to the Proposed
Settlement. Transcript of Feb. 24, 2026 Hr’g (“Feb. 24 Tr.”) 4:6-24, ECF No. 147.
At the hearing, the Court also inquired into the Movants’ status and
interests. The Movants acknowledged that they are not creditors of the estate

and, therefore, do not possess a pecuniary interest in the outcome of the sale.
See Feb. 24 Tr. at 5-6. When asked whether they intended to submit a higher
competing bid for the causes of action, they declined to do so. Id. Based on this
record, the Court ruled on the record that the Movants lacked standing to object
to the Sale Motion and approved the sale. The Court also denied approval of the
Proposed Settlement, as the Trustee appropriately declined to pursue it further
in light of the higher and better offer presented by SPFPA.

Following the hearing, the Court entered the Order of Court approving the
sale (the “Sale Order,” ECF No. 141) and issued a comprehensive Memorandum
Opinion (the “Opinion,” ECF No. 140). In that Opinion, the Court found, among
other things, that the sale was authorized under the Bankruptcy Code, that the
Trustee had exercised sound business judgment, that SPFPA qualified as a good
faith purchaser; that the consideration was fair, reasonable, and in the best
interests of creditors; and that the Movants lacked standing because they were
not creditors and held no pecuniary interest in the estate.

In addition, although the Court found that the Movants lacked standing,
the Court nevertheless considered the substance of their written objection and
determined that it lacked merit. Thus, the Court’s ruling did not rest solely on
standing.
Thereafter, on March 13, 2026, the Movants filed notices of appeal from
the Sale Order and the denial of the 9019 Motion. On March 17, 2026, they filed
the instant Motion seeking stay pending appeal. By that time, however, the sale
had already closed. As reflected in the Trustee’s Report of Sale filed at ECF No.

169, the transaction approved by the Court on February 27, 2026 was
consummated and the purchase price was received by the estate on March 12,
2026 (which was one day prior to the filing of the appeals).
The Trustee and SPFPA each filed responses opposing the Motion, arguing
that the Motion lacks meaningful legal analysis, fails to engage this Court’s prior
reasoning, and reflects an effort by insider targets of the estate’s claims to impede
the prosecution of the same. The Court held a hearing on the Motion on April 7,
2026 and the Motion is now ripe for disposition.

III.
STANDARD FOR STAY PENDING APPEAL

A stay pending appeal is an extraordinary remedy that is not granted as a
matter of right. Rather, it is an exercise of judicial discretion that requires a
careful balancing of competing interests. The party seeking a stay bears the
burden of establishing that the circumstances justify the disruption of an
otherwise operative court order. As the Supreme Court has explained, a stay is
an “intrusion into the ordinary processes of administration and judicial review”
and is therefore reserved for those cases in which the movant makes a compelling
showing. Nken v. Holder, 556 U.S. 418, 427 (2009)(quoting Virginia Petroleum
Jobbers Ass’n v. Fed. Power Comm’n, 259 F.2d 921, 925 (D.C. Cir. 1958)).
In determining whether a stay pending appeal is warranted, courts apply
a four-factor test. The movant must demonstrate: (1) a likelihood of success on
the merits of the appeal; (2) that the movant will suffer irreparable injury absent
a stay; (3) that issuance of the stay will not substantially injure other interested

parties; and (4) that the public interest favors the granting of a stay. Hilton v.
Braunskill, 481 U.S. 770, 776 (1987). These factors are not rigid prerequisites
but interrelated considerations that must be balanced together in light of the
specific facts and circumstances of the case.
In the bankruptcy context, the United States Court of Appeals for the Third
Circuit explained the application of this test in In re Revel AC, Inc., 802 F.3d 558 (3d Cir. 2015). There, the Third Circuit emphasized that the first two factors (i.e.,
likelihood of success on the merits and irreparable harm) are the “most critical.” Id. at 568. The Court further explained that these two factors function as
threshold requirements. If the movant fails to satisfy either one, the inquiry
ordinarily ends, and a stay should be denied without further analysis. Id. at 571.
With respect to the likelihood of success factor, the movant is not required
to demonstrate that success on appeal is more likely than not. However, the
movant must show that the appeal presents a substantial case on the merits,
such that the likelihood of success is “significantly better than negligible but not

greater than 50%[.]” Id. at 568-69 & 571. A mere possibility of success or the
existence of a non-frivolous argument is insufficient. Rather, the movant must
identify legal or factual errors in the underlying decision that are sufficiently
serious to warrant appellate intervention.
The irreparable harm factor likewise imposes a demanding standard. The
movant must demonstrate that, absent a stay, it will suffer harm that is both
likely and irreparable (meaning harm that cannot be adequately remedied by a
later award of damages or by reversal on appeal). Id. at 569 & 571. Speculative

or contingent harms do not suffice, nor does the ordinary burden of litigation.
The harm must be immediate, concrete, and of such a nature that it cannot be
undone.
If, and only if, the movant satisfies these two threshold factors, the Court
proceeds to consider the remaining factors: the potential harm to other parties
and the public interest.5 These factors require the Court to assess the broader
consequences of granting or denying a stay, including the impact on the
administration of the bankruptcy estate and the interests of creditors. Id. at 569.

In the bankruptcy context, courts are particularly mindful of the need for prompt
and efficient administration of estates and the importance of finality in court-
approved transactions.
IV.
APPLICATION

A.
Likelihood of Success on the Merits

The Movants have failed to demonstrate a likelihood of success on the
merits of their appeal. Their Motion contains only a threadbare analysis of this

5 The Court concludes in this Memorandum Opinion that the Movants failed to meet their burden as to the
first two factors (e.g., likelihood of success and irreparable injury). However, for purposes of completeness
the Court examined the remaining two factors (e.g., the balance of harms and public interest) and concludes
that these factors also militate against granting the Motion.
critical factor and falls well short of the showing required under controlling Third
Circuit precedent.
In support of this factor, the Movants devote only a limited portion of their
Motion to articulating the grounds upon which they contend the Sale Order

should be reversed. Paragraph 51 of the Motion states, in conclusory fashion,
that “multiple grounds exist to overturn the Sale Order, including, but not limited
to, the good faith status of SPFPA as a purchaser of the Debtor’s assets.” Motion
¶ 51 (italics in the original).6 Beyond this generalized assertion, however, the
Motion identifies only one purported basis for reversal (namely, a challenge to
SPFPA’s good faith) and does not address any other aspect of the Movants’ prior
Objection to Sale or this Court’s Opinion.
This omission is significant. The Court issued a comprehensive Opinion

addressing the Movants’ objection and setting forth its reasoning in detail. Yet
the Motion does not engage that analysis in any meaningful way. It does not
identify specific findings that are clearly erroneous, does not challenge the
Court’s application of controlling law, and does not articulate how or why the
Court’s reasoning is incorrect. Instead, it offers only generalized disagreement

6 The Court notes that in paragraph 51 of the Motion, the Movants cite to paragraphs 51 through 68 of their
Objection to Sale. The gist of those allegations is that SPFPA and the litigation targets are rival unions (or
affiliates of rival unions), that there are concerns regarding confidentiality, and that there is acrimony and
competition for membership between the parties that forms the basis of SPFPA’s alleged “motivation” to
enter into the sale transaction with the Trustee. While such allegations are an interesting read, none of the
allegations concern any conduct of SPFPA during the course of the sale proceeding that could disqualify a
good faith finding under the Third Circuit’s decision in In re Abbotts Dairies of Pennsylvania, Inc., 788
F.2d 143, 147 (3d Cir. 1986)(identifying the type of conduct during the course of sale proceedings that
would preclude a finding of good faith for purposes of 11 U.S.C. § 363 (m)). Of course, what the Movants
conveniently omit from their litany of alleged “motivations” is the fact that the SPFPA is a creditor of this
estate, having filed a proof of claim in an amount of nearly $2.3 million dollars, and would like to be paid.
and invites the Court to infer, without guidance, what arguments might exist.
The Court declines that invitation. It is not the role of the Court to construct
arguments on a party’s behalf or to search the record for theories that have not
been meaningfully presented. To the extent the Movants intended to rely on

arguments not developed in their Motion, those arguments are deemed
abandoned for purposes of this analysis.
Even taking the Movants’ limited assertions at face value, they do not
establish a likelihood of success under the governing standard. The Movants rely
on formulations suggesting that a “substantial possibility” of success or the
presence of a “serious legal question” is sufficient. Motion ¶¶ 49-50. That is not
the law in this Circuit. Under In re Revel AC, Inc., the movant must demonstrate
that its likelihood of success is “significantly better than negligible but not

greater than 50%[.]” 802 F.3d at 568 -69 & 571. This standard requires more
than the mere existence of a disputable issue; it requires a meaningful showing
that the appeal has materially significant merit. The Movants have not come
close to meeting that burden.
The Movants’ likelihood of success is independently undermined by their
lack of standing. Appellate standing in bankruptcy is limited to “persons
aggrieved[,]” which are those whose pecuniary interests are directly and

adversely affected by the order at issue. In re Combustion Eng’g, Inc., 391 F.3d
190, 214 (3d Cir. 2004). The Movants do not satisfy this standard. They are not
creditors of the estate, do not hold claims against the estate, and are not entitled
to any distribution. Their asserted interest arises solely from their status as
targets of the causes of action being sold and their desire to avoid or limit
potential liability. That interest is adversarial, not pecuniary, and does not confer
standing.
This conclusion is reinforced by binding Third Circuit precedent. In

Calpine Corp. v. O’Brien Environmental Energy, Inc. (In re O’Brien
Environmental Energy, Inc.), the Court of Appeals made clear that “creditors
have standing to appeal, but disappointed prospective purchasers do not.” 181
F.3d 527, 531 (3d Cir. 1999).
This Court surmises that the Movants take issue with the Court’s
characterization of them as “disappointed bidders.” But the undisputed record
reflects that the Movants affirmatively pursued a settlement with the Trustee
that would have resulted in the extinguishment of the estate’s claims against

them in exchange for payment. As the Third Circuit has recognized, the
disposition of estate claims through settlement is, in substance, a sale of estate
property subject to the Court’s oversight. See Myers v. Martin (In re Martin), 91
F.3d 389, 394–95 (3d Cir. 1996)(settlements “involve the disposition of assets of
the estate”); Northview Motors, Inc. v. Chrysler Motors Corp., 186 F.3d 346, 350 (3d Cir. 1999)(trustee’s act of agreeing to settle claims constituted a sale of that
claim)(citing In re Telesphere Commc’ns, Inc., 179 B.R. 544, 552 n. 7 (Bankr.

N.D. Ill. 1994)(“There is no difference in the effect on the estate between the sale
of a claim (by way of assignment) to a third party and a settlement of the claim
with the adverse party.”)); see also Gluckstadt Holdings, L.L.C. v. VCR I, L.L.C.
(In re VCR I, L.L.C.), 922 F.3d 323, 327 (5th Cir. 2019)(settlement is in reality a
purchase).
What appears to animate from the Movants’ position is not any cognizable
defect in the sale process, but rather dissatisfaction with the Trustee’s decision

to pursue a higher and better transaction with SPFPA instead of the Proposed
Settlement that would have released the Movants from liability for less value.
They appear to suggest, albeit obliquely, that the Trustee’s refusal to press
forward with that settlement (and his support for the competing sale) somehow
constitutes bad faith.
That suggestion is squarely foreclosed by controlling Third Circuit
authority. In In re Martin, the Third Circuit Court of Appeals made clear that a
chapter 7 trustee is not obligated to champion a settlement that is no longer in

the best interest of the estate and, indeed, would risk breaching her fiduciary
duties if she did so. The Third Circuit emphasized that a trustee “has a fiduciary
relationship with all creditors of the estate” and is charged with the duty to
“collect and reduce to money the property of the estate” and to “maximize the
value of the estate.” 91 F.3d at 394 (citations omitted). The trustee is therefore
“bound to be vigilant and attentive in advancing the estate’s interests” and must
act to “realize from the estate all that is possible for distribution among the

creditors.” Id. (citations and brackets omitted).
Consistent with those duties, the Third Circuit expressly held that a
trustee may decline to advocate in favor of a previously negotiated settlement if
changed circumstances demonstrate that the settlement is no longer in the best
interests of the estate. As the Court explained, “we reject the proposition that a
trustee is required to champion a motion to approve a stipulation that is no
longer in the best interest of the estate.” Id. at 394. Far from constituting bad
faith, such conduct reflects the trustee’s faithful discharge of her statutory

obligations. Indeed, the Third Circuit cautioned that to require a trustee to
proceed with a value-diminishing settlement would create “a serious question of
breach of a fiduciary responsibility to all creditors.” Id. at 395.
That is precisely the situation presented here. Faced with a higher and
better offer (i.e., one that provided more immediate value and preserved the
potential for substantially greater recoveries), the Trustee appropriately informed
the Court of the changed circumstances and supported a transaction that
maximized value for the estate. That conduct was not only permissible; it was

required. The Movants’ suggestion that such conduct evidences bad faith turns
Martin on its head.
To be sure, the Third Circuit’s opinion in O’Brien arguably suggests a
narrow pathway under which standing may exist where a disappointed bidder
challenges the “intrinsic fairness” of the sale. 181 F.3d at 531. But that pathway
is exceedingly limited and, as courts have emphasized, is implicated only where
the objector alleges concrete facts suggesting that the sale itself was tainted by

fraud, collusion, mistake, or other inequitable conduct that undermined
competitive bidding and the estate’s ability to realize fair value. See, e.g., Kabro
Assocs. of West Islip, LLC v. Colony Hill Assocs. (In re Colony Hill Assocs.), 111
F.3d 269, 273–74 (2d Cir. 1997). That limited exception is of no avail here, and
the record makes clear why.
At the hearing on the Sale Motion, counsel for the Movants did not assert
standing based on any alleged defect in the integrity of the sale process. When

directly pressed by the Court on the issue of standing, counsel articulated a
wholly different theory—namely, that the Movants were parties to a proposed
settlement and were targets of the causes of action being sold:
THE COURT: So if [the Movants are] not Creditors, what’s their
standing to object to the Sale?
MR. BURKLEY: Well, one, they are the parties that entered into
the 9019 that is held in abeyance.
THE COURT: They are welcome to bid.
MR. BURKLEY: And they are also the targets of these [claims.]
…
THE COURT: They’re welcome to bid. So what’s their standing?
MR. BURKLEY: I believe that’s what their standing is, Judge.
They have a pecuniary interest in this Hearing
because they are the targets of this litigation.
There’s actions that are sought to be assigned
against them. And that they are also the parties
to another Pleading that is on for today that
certainly is impacted by this Sale.
Feb. 24 Tr. at 5-6.
Notably absent from this exchange, and from the Movants’ written
Objection to Sale, is any complaint implicating the integrity of the sale process.7

7 The Court notes that the Movants’ objection suggested that the sale to SPFPA does not benefit the
bankruptcy estate because SPFPA, as purchaser, stands to recover if it is successful in prosecuting the
assigned causes of action. That contention is misplaced. A fundamental purpose of the Bankruptcy Code is
to maximize value for the benefit of creditors. See, e.g., 11 U.S.C. § 704 (a)(1). SPFPA is itself a creditor of
this estate, as are Messrs. Hickey and McCray, and thus any recovery obtained through the prosecution of
these claims redounds to the benefit of the entire creditor body (and to cover administrative expenses such
as the Trustee’s fees). The Movants’ argument improperly assumes that value is diminished simply because
a creditor participates in the recovery process, when in fact the transaction ensures both an immediate cash
At no time did the Movants allege lack of notice, lack of opportunity to bid, fraud,
collusion, bid chilling, or any inequitable overreaching adversely affecting the
sale. Nor did the Movants allege any conduct that could plausibly suggest that
the auction process was manipulated or that the estate was deprived of the

benefits of a fair and competitive market. Instead, the arguments of counsel and
the written objection were silent as to the very categories of misconduct that
cases like O’Brien and Colony Hill recognize as potentially sufficient to confer
standing to a disappointed bidder.
That silence is not merely a pleading deficiency; it is dispositive. It is well-
settled in the Third Circuit that “when a party fails to raise an issue in the
bankruptcy court, the issue is waived and may not be considered . . . on appeal.”
Int’l Fin. Corp. v. Kaiser Grp. Int’l Inc (In re Kaiser Grp. Int’l Inc.), [399 F.3d 558,

565](https://www.courtlistener.com/opinion/789381/in-re-kaiser-group-international-inc-debtor-international-finance/#565) (3d Cir. 2005). The Movants cannot now attempt to recast their position
through generalized invocations of “intrinsic unfairness” untethered to any
factual predicate preserved before this Court.
Moreover, even setting waiver or forfeiture aside, the Movants’ objection
suffers from a more fundamental defect: it is wholly conclusory. As the Supreme
Court has made clear, a pleading must contain more than “labels and
conclusions” or a “formulaic recitation” of a claim; it must allege sufficient factual

payment to the estate and the potential for additional recoveries that would not otherwise be realized given
the Trustee’s resource constraints. Nor is SPFPA “usurping” estate causes of action for its own unilateral
benefit. To the contrary, the Sale Order expressly provides that any such actions shall be brought in this
Court, with any proceeds subject to the oversight of the Trustee and the Court in accordance with the
Bankruptcy Code. Sale Order at 2. In these circumstances, the transaction is entirely consistent with both
the Trustee’s duty to maximize value and the core purposes of the bankruptcy process.
matter to state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–57 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Bare
assertions devoid of factual enhancement (what the Supreme Court in Twombly
described as “naked assertion[s]”) do not suffice. Twombly at 557. Here, the

Movants’ passing references to “bad faith” or “unfairness” are precisely the sort
of unadorned, conclusory allegations that fail to cross the line from conceivable
to plausible. They identify no facts, no actors, no conduct, and no mechanism
by which the sale process was allegedly compromised.8
To permit such skeletal assertions to suffice would effectively collapse the
narrow “intrinsic fairness” exception into the rule itself, allowing any
disappointed party to manufacture standing through the incantation of
talismanic phrases. The law requires more. Because the Movants neither pleaded

nor preserved any plausible challenge to the integrity of the sale process, their
attempt to invoke the “intrinsic fairness” exception fails as a matter of law.
Of course, equally telling is the nature of the Movants’ grievance in this
case. The Court finds it notable that the Movants attempt to characterize as
“intrinsically unfair” a process that yielded more value for the bankruptcy estate
than the very transaction they themselves negotiated and advanced. The

8 The Trustee expressly represented in the Sale Motion and at the sale hearing that the proposed purchaser,
SPFPA, was a good faith purchaser within the meaning of 11 U.S.C. § 363 (m). Sale Motion ¶ 9; Feb. 24 Tr.
at 4:16-19. No party with standing challenged that representation. The record also reflects that no person or
entity (including the Movants who lacked standing) asserted fraud, collusion, or any other impropriety in
the sale process. See, e.g., Miomni Sports, Ltd. v. SBC Nev., LLC (In re Miomni Gaming, Ltd.), BAP No.
NV-23-1126-BNF, 2024 WL 1911092, at *6–7 (B.A.P. 9th Cir. May 1, 2024) (affirming good faith finding
where trustee’s representations were unopposed and no evidence of fraud, collusion, or misconduct was
presented).
Proposed Settlement would have resolved the estate’s claims for $140,000. The
sale approved by this Court generated a higher and better offer ($145,000 plus
net recoveries), thereby increasing immediate value and preserving substantial
upside for creditors. That result is the hallmark of a fair and properly functioning

bankruptcy sale process, not evidence of any infirmity. As the Seventh Circuit
Court of Appeals has observed, objections by non-bidders or unsuccessful
participants premised on alleged defects in an auction process ring hollow where
the challenged conduct increases the price realized for the estate and thus
benefits creditors rather than harms them. See In re New Energy Corp., 739 F.3d
1077, 1079 (7th Cir. 2014)(a transaction which increases the price realized by
the estate would help creditor recovery and “would [be] a reason to confirm the
sale rather than set it aside”); see also Stark v. Moran (In re Moran), [566 F.3d

676, 682](https://www.courtlistener.com/opinion/2977963/w-stark-v-robert-moran/#682) (6th Cir. 2009)(frustrated bidder standing not accorded when “none of
the relief [the frustrated bidder] requests on appeal could possibly increase any
creditor’s recovery”).
Here, the Movants’ position suffers from that same defect described by the
court in New Energy. What the Movants label as “unfairness” is, in substance,
dissatisfaction that the Trustee and the Court refused to accept a lower-value
resolution that would have extinguished claims against the Movants at a

discount. The Bankruptcy Code does not countenance such a result sought by
the Movants. The absence of any allegations of sale process-related misconduct,
coupled with the undisputed fact that the approved transaction represents a
higher and better outcome for the estate, renders the Movants’ invocation of
“intrinsic fairness” entirely unfounded.
Not to be lost in this discussion is the fact that the Court’s prior ruling did
not rest solely on the Movants’ lack of standing. In its Opinion approving the

sale, the Court expressly considered the substance of the Movants’ written
Objection to Sale and addressed their arguments on the merits. After doing so,
the Court concluded that those arguments were without merit, independent of
the Movants’ standing deficiency. Thus, even if the Movants could overcome the
threshold issue of standing, which they cannot, their underlying arguments
would not warrant reversal.
The Movants’ sole allegation in its Motion, that SPFPA does not qualify as
a good faith purchaser, fails both as a matter of law and on the record developed

in this case. The governing standard is set forth in binding Third Circuit
precedent. In In re Abbotts Dairies of Pennsylvania, Inc., the Court of Appeals
held that the requirement of good faith under section 363(m) is directed to the
integrity of the sale process, not the subjective motivations of the purchaser. 788
F.2d 143, 147 (3d Cir. 1986).
As the Third Circuit explained: “The requirement that a purchaser act in
good faith… speaks to the integrity of his conduct in the course of the sale

proceedings.” Id. (citations omitted). “Typically, the misconduct that would
destroy a purchaser’s good faith status… involves fraud, collusion between the
purchaser and other bidders or the trustee, or an attempt to take grossly unfair
advantage of other bidders.” Id. (citations omitted); see also Schepis v. Burtch (In
re Pursuit Capital Mgmt., LLC), 874 F.3d 124, 135-37 (3d Cir. 2017)(discussing
standards for challenging good faith).
These principles are controlling and define the relevant inquiry. The focus
is on whether the sale process itself was tainted by misconduct; not on whether

the purchaser has strategic or adversarial motivations in acquiring the asset.
Measured against this standard, the Movants’ argument is not merely
unpersuasive, it is non-existent. Neither their objection to the sale nor their
Motion identifies any facts that would support a finding under Abbotts that good
faith is lacking. The record, moreover, affirmatively demonstrates that the sale
process was conducted with integrity, transparency, and in furtherance of the
Trustee’s fiduciary duties. Notice was properly given, the sale is arms-length, the
sale was advertised, and all parties (including the Movants) were afforded an

opportunity to participate in bidding. The Movants, however, declined to make a
further bid beyond the Proposed Settlement. A party cannot elect not to
participate in a competitive process and then seek to invalidate its outcome.
In sum, this Court did not abuse its discretion in deferring to the Trustee’s
legitimate business judgment by approving the sale and rejecting the settlement.
In re Martin, 91 F.3d at 395 (“under normal circumstances the court would defer
to the trustee’s judgment so long as there is a legitimate business

justification”)(citing Fulton State Bank v. Schipper (In re Schipper), 933 F.2d
513, 516 (7th Cir. 1991)).
The Court makes an additional observation. A bankruptcy court may
approve a section 363 sale even in the absence of a finding of good faith because
the good faith inquiry is relevant to the applicability of section 363(m)’s
protections on appeal, not to the underlying authority to approve the sale in the
first instance. See In re Primel, 629 B.R. 790, 798-800 & 803 (Bankr. W.D. Pa.
2021) (explaining that any perceived requirement of a good faith finding as a

prerequisite to sale approval reflects a misreading of Abbotts Dairies).
The fact remains that the Sale Order is independently supported by the
Trustee’s sound business judgment. The Trustee elected to pursue a transaction
that yielded greater value to the estate than the alternative proposed by the
Movants, thereby fulfilling his statutory duty to maximize recoveries for
creditors. There is no genuine dispute that SPFPA is unaffiliated with the Trustee
(and neither is it affiliated with the Debtor) and acted as an arm’s-length
purchaser. The sale was conducted following proper notice and with a full and

fair opportunity for competitive bidding. Nor is there any dispute that the
consideration offered by SPFPA is fair and reasonable. Indeed, it exceeds the
amount initially offered by the Movants themselves in the Proposed Settlement.
Finally, neither the Movants nor any party with standing has alleged, much less
pointed to the existence of any evidence suggesting, the existence of fraud,
collusion, or any attempt by SPFPA to obtain a grossly unfair advantage in the
sale process. Under these circumstances, even apart from section 363(m), the

sale readily satisfies the requirements for approval under section 363(b), and the
Movants’ focus on good faith is misplaced.
Accordingly, this Court concludes that the Movants’ showing on likelihood
of success consists merely of conclusory assertions and a fundamental
misapprehension of the Trustee’s duties under controlling law. Their arguments
do not have a “significantly better than negligible” chance at success; they are
devoid of merit.
Under Revel AC, the failure of the Movants to demonstrate a likelihood of

success on appeal is dispositive. This first, and most critical, factor weighs
decisively against the issuance of a stay.
B.
Irreparable Harm

The Movants likewise fail to demonstrate that they will suffer irreparable
harm absent the issuance of a stay. Their argument on this factor centers
primarily on the contention that, without a stay, their appeal may be rendered
moot under 11 U.S.C. § 363 (m), which they characterize as “quintessential”
irreparable harm. Motion ¶ 39. While the Court acknowledges the importance of
preserving appellate rights, the Movants’ argument does not withstand scrutiny
when considered in light of the record and governing law.
At the outset, section 363(m) reflects Congress’s policy judgment that
bankruptcy sales to good faith purchasers should be afforded finality. That policy
promotes participation in asset sales and maximizes value for creditors. But the
existence of section 363(m) does not automatically entitle a party to a stay. If it
did, stays would issue in virtually every case involving a sale of estate property,
thereby undermining the finality the statute is designed to protect.
The procedural posture of this case is worth noting. As reflected in the
Trustee’s Report of Sale, the transaction approved by this Court on February 27,
2026, was consummated and the purchase price was received by the estate
before the Movants filed the instant Motion. Thus, at the time the Movants
sought relief, the transaction they seek to stay had already closed.
A stay pending appeal is inherently prospective in nature; it is designed to
preserve the status quo pending appellate review. The Movants did not seek such

relief until after the status quo had changed. Courts sitting in equity do not
reward such delay. Where a movant fails to act with diligence to prevent the very
circumstance it later invokes as harm, the resulting prejudice does not constitute
irreparable injury warranting extraordinary relief.
To the extent section 363(m) may now bear on the scope of appellate relief,
that circumstance does not alter this conclusion. The Movants had notice of the
Sale Order but did not immediately seek a stay before the time period set forth
in Bankruptcy Rule 6004(h) expired.9 Any limitation on appellate remedies

resulting from the consummation of the transaction is therefore a consequence
of their own inaction, not a basis for relief. Moreover, section 363(m) is not

9 Federal Rule of Bankruptcy Procedure 6004(h) provides that “[u]nless the court orders otherwise, an order
authorizing the . . . sale . . . of property . . . is stayed for 14 days after the order is entered.” The Sale Order
was entered on February 27, 2026; accordingly, the Bankruptcy Rule 6004(h) stay expired on March 13,
2026. The Movants did not file their Motion for Stay Pending Appeal until March 17, 2026 (after the
expiration of the automatic Rule 6004(h) stay). The Court further notes that the Sale Motion contemplated
a closing within ten (10) days of entry of the Sale Order, but the Sale Order itself provided that closing
“shall occur within thirty (30) days” of its entry. See Sale Motion ¶ 17; Sale Order at 3. The record reflects
that the purchaser, SPFPA, remitted the remaining purchase price on March 12, 2026, one day prior to the
expiration of the Rule 6004(h) stay. The Court expresses no view as to the legal significance of that timing
other than to observe that the purchaser tendered payment before the Bankruptcy Rule 6004(h) stay expired.
In any event, the timing of the closing does not alter the Court’s analysis. Because the Motion for Stay
Pending Appeal was filed after the expiration of the Rule 6004(h) stay, and because the Court concludes
(for the reasons explained in this Memorandum Opinion) that the Movants have not satisfied the applicable
standard for a stay pending appeal, the Motion must be denied regardless of the timing of SPFPA’s actual
payment of the sales proceeds.
jurisdictional and does not categorically foreclose the availability of appellate
relief. MOAC Mall Holdings LLC v. Transform Holdco LLC, 598 U.S. 288 (2023).
Even assuming that the protections of 11 U.S.C. § 363 (m) apply to the
consummated sale, the Movants’ premise that denial of a stay results in

“irreparable” injury is misplaced. Courts have long recognized that the
relationship between mootness doctrines and the irreparable injury prong has
generated substantial discussion. The decision by retired United States
Bankruptcy Judge Thomas P. Agresti in In re Countrywide Home Loans, Inc.
expressly acknowledges this divide, noting that while a “majority view” holds that
the mere “risk of mootness,” standing alone, does not constitute irreparable
harm, a “significant, minority view” permits consideration of mootness as a
potential injury, albeit only after a careful examination of the nature of the

underlying rights at stake and the surrounding facts. 387 B.R. 467, 476–77
(Bankr. W.D. Pa. 2008) (discussing Williams v. Republic (In re Cujas), 376 B.R.
480, 487 (Bankr. E.D. Pa. 2007), and ACC Bondholders Grp. v. Adelphia
Commc’ns Corp. (In re Adelphia Commc’ns Corp.), 361 B.R. 337 (S.D.N.Y. 2007)).
What Countrywide makes clear, consistent with Third Circuit guidance, is
that stay determinations must reflect individualized considerations relevant to
the case at hand. See Republic of the Phil. v. Westinghouse Elec. Corp., [949 F.2d

653](https://www.courtlistener.com/c/F.2d/949/653/), 658 (3d Cir. 1991). Consistent with this approach, there is no per se rule
equating the potential for mootness with irreparable injury. Rather, the inquiry
remains an equitable, fact-intensive one, requiring courts to assess not only
whether appellate rights might be affected, but whether the alleged harm is truly
incapable of remediation. See Countrywide, 387 B.R. at 476–77 (emphasizing
that even where mootness is considered, courts must “go one step further” and
evaluate the nature of the harm and balance it against competing interests
(quoting Cujas, 376 B.R. at 487)).

Viewed through that lens, the “harm” or “injury” identified by the Movants
here is not the loss of any substantive right, but the prospect that they will be
required to defend against claims pursued by SPFPA. That is not an injury that
is “irreparable.” As the Supreme Court has made clear, “[m]ere litigation expense,
even substantial and unrecoupable cost, does not constitute irreparable injury.”
Renegotiation Bd. v. Bannercraft Clothing Co., 415 U.S. 1, 24 (1974); accord
Countrywide, 387 B.R. at 474–75 (relying on Bannercraft to reject litigation cost
as a basis for irreparable harm). Nor does the possibility that appellate review

may proceed after the challenged conduct has occurred render the appeal
meaningless, where courts remain capable of fashioning relief. See, e.g., In re
Grand Jury Investigation, 445 F.3d 266, 270–73 (3d Cir. 2006) (holding that
compliance with a discovery order does not moot an appeal because effective
relief, such as return or suppression, remains available); Countrywide, 387 B.R.
at 476 (relying on Grand Jury Investigation to reject mootness-based irreparable
harm).

Here, the Movants retain all of their substantive defenses to any claims
that may be asserted against them and will receive a full and fair opportunity to
litigate those defenses in the appropriate forum. Under these circumstances, any
asserted injury tied to section 363(m) mootness is not irreparable because it does
not extinguish rights, foreclose defenses, or prevent meaningful appellate or
merits review. Instead, it reflects only the ordinary burdens attendant to
litigation, which are burdens that courts have consistently held are insufficient
to justify the extraordinary remedy of a stay. Ports Am. Gulfport, Inc. v. Johnson,

Civil Action No. 22-455, 2022 WL 742440, at *4 (E.D. La. Mar. 11,
2022)(explaining that the expense and inherent risks of litigation, standing
alone, fall short of establishing irreparable harm warranting injunctive relief).
Accordingly, section 363(m), even if applicable, does not transform routine
litigation exposure into irreparable harm.
The Movants also assert that a stay is necessary to prevent SPFPA from
obtaining confidential or proprietary information and to ensure compliance with
federal labor law. Motion ¶ 56. These arguments are conclusory and

unsupported. Neither the Movants’ Objection to Sale nor the present Motion
articulates a legal basis demonstrating that the Sale Order authorizes unlawful
conduct or alters the parties’ substantive rights. To the extent future disputes
arise regarding confidentiality or discovery, established procedural mechanisms
(such as motions for protective orders) are available to address those concerns.
Similarly, to the extent the Movants raise concerns regarding privilege,
those concerns are also misplaced. While a trustee may control and, where

appropriate, waive the debtor’s privileges, Commodity Futures Trading Comm’n
v. Weintraub, 471 U.S. 343 (1985), nothing in the Sale Order purports to waive
any privileges belonging to third parties. Such privileges, if they exist, remain
with their holders and are unaffected by the transaction. The Sale Order
addresses only privileges belonging to the estate and does so in a manner
consistent with the Trustee’s authority.
In sum, the Movants have not demonstrated that they will suffer
irreparable harm absent a stay. Their reliance on section 363(m) is unavailing in

light of the timing of their Motion, the nature of the alleged injury, and the
continued availability of meaningful relief. Under Revel AC, this failure is
independently dispositive.
C.
Balance of the Harms

The balance of harms weighs decisively against the issuance of a stay. In
assessing this factor, the Court must examine the nature and magnitude of the
injury that the Movants will suffer absent a stay and compare it against the harm
that would be imposed on the estate and other parties if a stay were granted.
Where, as here, the Movants’ asserted harms are speculative and remediable,
and the countervailing harms are concrete and immediate, this factor strongly
favors denial of the requested relief.
As discussed above, the Movants’ asserted injury consists primarily of the
possibility that their appeal may be adversely affected by the operation of section
363(m), and the prospect that they will be required to defend against claims
pursued by SPFPA. Neither of these asserted harms is irreparable. The potential
application of section 363(m) reflects a statutory policy favoring finality, not a
cognizable injury in and of itself. Likewise, exposure to litigation is a routine
consequence of the judicial process and does not constitute a harm that
warrants the extraordinary remedy of a stay.
By contrast, the harm to the estate from the imposition of a stay is both
real and substantial. The Trustee has a statutory duty to administer the estate
expeditiously and to maximize value for creditors. Delaying the consummation
and implementation of the sale frustrates that duty. It postpones the estate’s

receipt and use of the $145,000 purchase price (an amount already greater than
the Proposed Settlement) and delays the potential realization of additional
recoveries that may be obtained through prosecution of the claims.
Delay also carries inherent risks that are particularly acute in the context
of litigation in that it erodes the estate’s ability to timely assert claims. Congress
has imposed a firm limitations period on avoidance actions, providing that such
actions must be commenced “(A) 2 years after the entry of the order for relief; or
(B) 1 year after the appointment or election of the first trustee . . . if such

appointment or such election occurs before the expiration of the period specified
in subparagraph (A)[,]” whichever is later. 11 U.S.C. § 546 (a)(1). Here, the
bankruptcy case was commenced on July 8, 2024, and the statutory clock is
already running. As that deadline approaches, delay materially constrains the
SPFPA’s ability to continue to investigate, prepare, and timely file avoidance
actions to protect the bankruptcy estate. A stay pending appeal would not simply
pause the administration of the estate, it would risk compressing the already

limited window Congress has provided for commencing such lawsuits.
In this light, the Court cannot ignore the practical effect of the Movants’
requested relief. The opposition to the Sale Motion and the Motion for Stay
Pending Appeal, if granted, would operate to delay the prosecution of claims that
are subject to a finite statutory limitations period. Whether intended or not, such
delay would have the effect of “boxing in” the commencement of the avoidance
actions into an increasingly narrow timeframe, thereby diminishing the value of
the estate’s claims and undermining the Trustee’s ability to maximize recoveries

for creditors. The Bankruptcy Code does not favor such an outcome, and the
Court declines to endorse a course of action that would place the estate at risk
of losing valuable claims through the mere passage of time.
The passage of time may also impair the availability and reliability of
evidence, including documents and witness testimony. Memories fade, records
become more difficult to obtain, and the ability to reconstruct financial
transactions diminishes. These risks are not speculative; they are a well-
recognized consequence of delay and directly affect the value of the causes of

action for purposes of prosecution and collection. A stay would therefore
threaten to erode the very asset that the Trustee is obligated to preserve and
monetize.
These concerns regarding the loss of evidence are not merely theoretical in
this case. The record reflects that SPFPA has asserted (and supported with
attached materials) that certain of the Movants have previously been found by
the United States District Court for the Eastern District of Michigan to have

engaged in spoliation of evidence. See SPFPA Response 16–17 & Ex. 1. While this
Court does not rely on that determination as dispositive of any issue presently
before it, the allegation, grounded in a prior judicial finding, underscores the
concrete risk that further delay may impair the evidentiary record. In such
circumstances, the prospect of delay carries heightened concern, as it may
compound existing evidentiary deficiencies and further diminish the estate’s
ability to realize value from its claims. See Abbo-Bradley v. City of Niagara Falls, 293 F.R.D. 401, 409 (W.D.N.Y. 2013)(spoliation of evidence “is sufficient to

establish irreparable harm”).10
The prejudice to SPFPA, as purchaser and one of the estate’s principal
creditors, is similarly significant. SPFPA has agreed to acquire the causes of
action and to undertake the risk and expense of prosecuting them, with the
potential for substantial additional recoveries for the estate. A stay would delay
SPFPA’s ability to proceed, thereby increasing litigation costs and uncertainty
while postponing any potential recovery. Given SPFPA’s status as a primary
creditor, such delay directly impacts a party with a significant economic stake in

the outcome of this case.
Moreover, the structure of the approved transaction underscores the
asymmetry of harm. The sale guarantees a minimum recovery of $145,000—
$5,000 more than the Proposed Settlement—while preserving the possibility of
significantly greater recoveries, potentially in excess of $1.8 million. A stay would
not merely preserve the status quo; it would delay and potentially diminish this
enhanced recovery structure. The Movants, who have no entitlement to any

10 Abbo-Bradley was not a case addressing stay pending appeal under the Federal Rules relevant sub judice.
Rather, the case discussed the four-part test for obtaining injunctive relief. This distinction is of no moment.
Nken v. Holder, 556 U.S. 418, 434 (2009)(same factors apply when analyzing a stay pending appeal and
preliminary injunction “not because the two are one and the same, but because similar concerns arise
whenever a court order may allow or disallow anticipated action before the legality of that action has been
conclusively determined”).
distribution from the estate, would benefit from that delay, while the estate and
its creditors would bear the cost.
The Movants’ own conduct further weighs against a finding that the
balance of harms favors a stay. They were afforded a full and fair opportunity to

participate in the sale process and to submit a competing bid. They declined to
do so. Having elected not to participate in the process designed to maximize
value, the Movants cannot now claim that they will be unfairly harmed by its
outcome. Any prejudice they face is, in substantial part, the result of their own
strategic choices.
In sum, the Movants have not identified any concrete harm that would
result from denial of a stay, while the estate and its creditors face real and
immediate prejudice from delay. The balance of harms therefore weighs strongly

against the issuance of a stay pending appeal.
D.
Public Interest
The public interest weighs against the issuance of a stay. In the
bankruptcy context, the public interest is closely tied to the efficient
administration of bankruptcy estates, the maximization of value for creditors,
and the finality of court-approved transactions. Congress has made clear,
particularly through section 363(m), that finality in bankruptcy sales is a critical
component of the system as it promotes confidence in the process and
encourages participation by good faith purchasers.
Granting a stay in these circumstances would undermine those objectives.
The Sale Order reflects a process that was open, noticed, and advertised in
accordance with this Court’s Local Bankruptcy Rules, and that resulted in a
higher and better offer for the benefit of the estate. To stay the Sale Order based
on speculative concerns and undeveloped arguments would introduce
uncertainty into the sale process and disincentivize participation by parties

willing to invest resources to acquire and pursue estate assets. That outcome
would run counter to the core purposes of the Bankruptcy Code.
The Movants contend that the public interest favors a stay to ensure
compliance with federal labor law and to prevent the alleged misuse of
confidential information. Motion ¶ 56. As discussed above, these concerns are
not supported by any articulated legal basis and do not arise from the terms of
the Sale Order itself. The purchaser, like all litigants, remains bound by
applicable law, and any disputes regarding discovery or the use of information

may be addressed through established procedural mechanisms. The speculative
possibility of future legal disputes does not implicate a public interest sufficient
to warrant the extraordinary remedy of a stay.
To the contrary, the public interest is affirmatively served by allowing the
Sale Order to proceed. The transaction ensures an immediate and enhanced
recovery for the estate (in an amount of at least $145,000, which exceeds the
Proposed Settlement) and preserves the potential for substantially greater

recoveries through prosecution of the claims. It reflects the Trustee’s faithful
execution of his statutory duties and this Court’s oversight of a fair and
competitive process. Permitting that process to move forward promotes
confidence in the integrity of the bankruptcy system and reinforces the principle
that value-maximizing transactions, once properly approved, should not be
lightly disturbed.
Finally, the public interest disfavors permitting non-creditor litigation
targets to delay the administration of an estate through the assertion of

speculative harms and undeveloped legal theories. The Bankruptcy Code is
designed to benefit creditors and to facilitate the orderly resolution of claims; not
to provide a tactical mechanism by which defendants may impede the
prosecution of estate causes of action. Denying the requested stay in these
circumstances is therefore consistent with both the Code’s statutory framework
and the broader public interest.
V.
CONCLUSION

The Movants have failed to carry their burden on any of the factors
required to obtain a stay pending appeal. They have not demonstrated a
likelihood of success on the merits—having offered only undeveloped and
conclusory arguments that do not engage controlling law or this Court’s prior
analysis. They have not established irreparable harm, as their asserted injury
reduces to the ordinary burden of defending litigation and, in any event, arises
from their own failure to seek timely relief before the sale closed. The balance of
harms weighs decisively against a stay, as delay would prejudice the estate and
a primary creditor. And the public interest favors finality, the integrity of the sale
process, and the efficient administration of bankruptcy estates.
In these circumstances, the extraordinary relief requested is not
warranted. The Motion for Stay Pending Appeal Pursuant to Bankruptcy Rule 8007
shall therefore be DENIED.
An appropriate Order shall be issued.

Dated: April 17, 2026 “ee 2
The Honorable Jeffery A. Deller
United States Bankruptcy Judge

Case Administrator to Mail to:
Debtor
Eric E. Bononi, Chapter 7 Trustee
Kirk B. Burkley, Esq., Counsel to the Debtor and the Movants
J. David Garcia, Esq., Counsel to the SPFPA
Office of the United States Trustee
FILED
4/17/26 1:40 pm
CLERK
U.S. BANKRUPTCY
COURT - WDPA

37