United States District Court, W.D. Washington, Tacoma
ORDER DENYING APPELLANT'S MOTION FOR A
BENJAMIN H. SETTLE United States District Judge.
matter comes before the Court on Appellant Gail Brehm
Geiger's, Acting United States Trustee for Region 18,
(“Trustee”) motion for stay pending appeal (Dkt.
5). The Court has considered the pleadings filed in support
of and in opposition to the motion and the remainder of the
file and hereby denies the motion for the reasons stated
PROCEDURAL AND FACTUAL BACKGROUND
November 11, 2016, Cook Investments NW, SPNWY, LLC.
(“Debtor”) filed a Chapter 11 voluntary petition
in the Western District of Washington United States
Bankruptcy Court. In re Cook Investments NW, SPNWY,
LLC, Case No. 16-44782-BDL (Bankr. W.D. Wash.), Dkt. 1.
January 18, 2017, the Trustee moved to dismiss the petition
for cause. Id., Dkt. 32. The Trustee asserted that
the Debtor entered into a lease with a commercial grower of
marijuana, N.T. Pawloski LLC d/b/a Green Haven (“Green
Haven”). Id. The Trustee argued that the
petition should be dismissed for gross mismanagement of the
estate because leasing a premises to an entity that grows
marijuana violates the Controlled Substances Act, 21 U.S.C.
§ 801 et seq. Id.
March 9, 2017, the court denied the motion with leave to
renew because the Debtor asserted that it could propose a
plan that specifically rejected the Green Haven lease.
Id., Dkt. 67.
March 28, 2017, the Debtor filed a second amended plan of
reorganization (“Plan”). Id., Dkt. 93.
April 3, 2017, the Debtor filed a motion for order
authorizing rejection of unexpired lease. Id., Dkt.
April 27, 2017, the Trustee filed an objection to the Plan
arguing that “any confirmation order and related plan
injunctions entered in this case would tacitly promote
ongoing criminal conduct” regardless of whether the
Plan accepted or rejected the Green Haven lease.
Id., Dkt. 125. The Trustee sought rejection of the
Plan because it did “not meet the confirmation
requirements of 11 U.S.C. § 1129(a)(3).”
Id. at 2.
22, 2017, the court granted the motion to reject the Green
Haven lease and deemed the lease “rejected pursuant to
Bankruptcy Code § 365(a), effective immediately.”
Id., Dkt. 138. The court also approved the Plan.
Id., Dkt. 139.
21, 2017, the court confirmed the Plan. Id., Dkt.
153. This appeal followed.
28, 2017, the Trustee moved for a stay pending appeal.
Id., Dkt. 160. On July 24, 2017, the court denied
the motion. Id., Dkt. 186.
27, 2017, the Trustee filed a motion for a stay pending
resolution of the appeal. Dkt. 5. On August 7, 2017, the
Debtor responded. Dkt. 7. On August 11, 2017, the Trustee
replied. Dkt. 9.
question of whether a stay pending appeal is warranted
requires consideration of four factors: “(1) whether
the stay applicant has made a strong showing that he is
likely to succeed on the merits; (2) whether the applicant
will be irreparably injured absent a stay; (3) whether
issuance of the stay will substantially injure the other
parties interested in the proceeding; and (4) where the
public interest lies.” Nken v. Holder, 556
U.S. 418, 426 (2009) (quoting Hilton v. Braunskill,
481 U.S. 770, 776 (1987)). “The party requesting a stay
bears the burden of showing that the circumstances justify an
exercise of [this Court's] discretion.”
Id. at 433-34