In re: Monica D. Harenberg, Debtor, Case No. 10-23223-RAG
In re: D&M Realty, LLC, Debtor, Case No. 10-23222-RAG
Jointly Administered Under Case No. 10-23223-RAG
Following the decision to convert jointly administered Chapter 11 cases to Chapter 7 in lieu of the approval of the proffered disclosure statement, and the corollary denial of confirmation of the plan, the Debtors, an individual and a shell entity, appealed the decision and filed a motion for stay pending appeal. The Court found that its decision to withhold approval of the disclosure statement and deny confirmation of the plan, and therefore convert, was appropriate in light of the plan’s failure to conform to applicable law, the individual Debtor’s repeated acts of bad faith, the plan’s violation of the liquidation test and its proposed unfair discrimination in favor of the individual Debtor’s mother, all in violation of the confirmation requirements of Section 1129(a). Conversion was deemed appropriate as the individual Debtor’s schedules and disclosure statement reflected substantial equity in both her real and personal property. In light of these factors, the individual Debtor could not establish that (1) there was a likelihood of success on the merits on appeal, (2) she would suffer irreparable injury if the stay is denied, (3) other parties will not be substantially harmed by the stay, and (4) the public interest will be served by granting the stay. The requested stay pending appeal was denied.