Opinion

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/bankruptcy_standing_order.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 (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 (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, 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