Delaware Court Denies Motion to Stay Order, Pending Appeal

September 25, 2012

Publication| Bankruptcy & Corporate Restructuring

In In re W.R. Grace & Co., the Delaware District Court denied the motion of Garlock Sealing Technologies, LLC, to stay the court’s amended order confirming the debtors’ joint plan of reorganization, pending Garlock’s appeal to the Third Circuit. Garlock had objected to confirmation of the joint plan, but the court found that Garlock lacked standing, and concluded that the substantive objections were unfounded in any event. Garlock appealed and filed an emergency motion seeking to stay the confirmation order to prevent alleged irreparable harm to its set-off and contribution claims should the joint plan become effective before its appeal could be adjudicated.

An appellant bears the burden of justifying the need for the “extraordinary remedy” of staying a court’s decision, pending an appeal by presenting satisfactory evidence, on all four of the following criteria: (1) the likelihood of the appellant’s success on the merits; (2) irreparable harm to appellant absent a stay; (3) lack of harm to other parties should the stay be granted; and (4) that the public interest supports granting a stay. The court found that Garlock failed to meet its burden with respect to each of the four factors.

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