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- ilnd;;1:09-cv-06010_de385 RegisterActionDate "2011-10-12" @default.
- ilnd;;1:09-cv-06010_de385 RegisterActionDescriptionText "MINUTE entry before Honorable Jeffrey Cole: Status hearing held regarding the issue of bond. At the commencement of the hearing, the court was informed that N'Genuity had the day before filed a Chapter 11 bankruptcy proceeding in Arizona. All of the lawyers for all of the parties in this case, including N'Genuity, claimed to have had no knowledge of that filing until it occurred. There was a long discussion on the record regarding the effect of the bankruptcy proceeding on this case. What the outcome of the Arizona proceeding will be remains to be seen. What is clear, however, is that the filing in the bankruptcy court does not stay the instant case as it pertains to the remaining defendants, "The clear language of Section 362(a)(1) thus extends the automatic stay provision only to the debtor filing bankruptcy proceedings and not to non-bankrupt co-defendants." Pitts v. Unarco Industries, Inc., 698 F.2d 313, 314 (7th Cir. 1983) (collecting cases). See also Queenie, Ltd. v. Nygard Int'l, 321 F.3d 282, 287 (2d Cir.2003) ("[A] suit against a codefendant is not automatically stayed by the debtor's bankruptcy filing."); A.H. Robins Co. v. Piccinin, 788 F.2d 994, 999 (4th Cir.1986); Levesque v. Kelly Communication, Inc., 164 B.R. 29, 30 (S.D.N.Y. 1994); In Re: Related Asbestos Cases, 23 B.R. 523 (N.D.Cal.1982). It is only when a claim against the non-debtor will have an immediate adverse economic consequence for the debtor's estate that the case cannot proceed against the non-debtor. Queenie, 321 F.3d at 287. During the course of the discussion, Mr. Glover stated that the bond should be in the hundreds of thousands of dollars because Ms. 7BC44BD compensation was between $200,000 and $300,000. That, of course, was inconsistent with the representations made in the briefing on the motion for preliminary injunction and appointment of a temporary receiver in which it was alleged that her salary was only in the $30,000 to $40,000 range. Mr. Glover responded by saying in essence her "compensation" as an officer of N'Genuity, reached that level and did so as a consequence of the payments by N'Genuity to 7BC44BD Specialties, the IC-DISC. After hearing extensive argument from the parties, other than N'Genuity, it is determined that the $5,000 bond initially set by Judge Lefkow shall stand as the bond on the preliminary injunction as to the non-bankrupt parties. Counsel for the parties could articulate no principled basis to conclude that the injunction against the non-bankrupt defendants, which essentially prohibits them from engaging in future fiduciary breaches and illicit diversions of N'Genuity funds, could, even if improvidently granted, result in any harm, let alone any meaningful financial consequences to the enjoined parties. It should be noted that N'Genuity's recent application for bond # 358 and its representations and arguments in its responses to the motion for preliminary injunction and motion for receiver represented that N'Genuity was a singularly successful company with revenues of $30 to $40 million annually and millions of dollars in profits. At this juncture, the basis for the bankruptcy filing was not made known to this court or explained by bankruptcy counsel for N'Genuity who participated in the hearing by phone at my request and in a purely informational or advisory capacity. Discovery shall proceed as to the remaining defendants and the discovery schedule is set as follows: Fact Discovery is ordered closed on 4/9/2012. Plaintiff's Rule 26(a)(2) disclosures shall be served by 5/9/2012. Depositions of plaintiff's expert(s) shall be completed by 6/8/2012. Defendants' Rule 26(a)(2) disclosures shall be served by 7/9/2012. Depositions of defendants' expert(s) shall be completed by 8/10/2012. Status hearing set for 10/24/2011 at 9:00 a.m. I have, on numerous occasions, expressed my view that the conduct of the defendants in this case, from the beginning, has been deplorable as it pertains to their participation in discovery. Despite the rather overwhelming proof of the defendants' consistent and persistence misbehavior, their lawyers have sought to justify their clients' behavior with one excuse after another, none of which have proven valid or persuasive. I again want to make clear to counsel and their clients that the next discovery infraction or violation of court order will, if otherwise appropriate, result in a recommendation to Judge Lefkow to enter a default judgment against the offending party. This is not to say that that relief may not already be warranted. That is a matter for Judge Lefkow to resolve in ruling on the plaintiff's pending motion in this regard before her. Mailed notice (gmr, ) (Entered: 10/19/2011)" @default.
- ilnd;;1:09-cv-06010_de385 AdministrativeID "383" @default.
- ilnd;;1:09-cv-06010_de385 OntologyLabel minute_entry @default.
- ilnd;;1:09-cv-06010_de385 hasReferenceToOtherEntry ilnd;;1:09-cv-06010_de369 @default.