Basuljevic v. Thornton Lauper
- Andrew Carter
- 1:24-cv-02023
- U.S. District Court · Southern District of New York
- 1
In Basuljevic v. Thornton Lauper, Judge Tarnofsky ruled that bankruptcy’s automatic stay covers claims against Lauper but not his third-party claims.
The automatic stay applies to claims against Defendant and Third-Party Plaintiff Declyn Wallace Thornton Lauper, but not automatically to the third-party claims he brings. The parties must state their positions on a possible discretionary stay of those third-party claims.
What happened
In Basuljevic v. Thornton Lauper, Defendant and Third-Party Plaintiff Declyn Wallace Thornton Lauper told the court that he had filed for Chapter 7 bankruptcy and that the bankruptcy stay applied to the case. The opinion does not describe the underlying claims.
The court explained that the bankruptcy stay generally pauses proceedings against the person who filed for bankruptcy. It does not automatically pause claims that the bankruptcy filer brings as a third-party plaintiff, because those claims may benefit the bankruptcy estate.
Judge Robyn F. Tarnofsky ordered the parties to file a joint letter by February 21, 2025, stating their positions on whether the court should separately use its discretion to stay Lauper’s third-party claims. The order did not itself impose that additional stay.
The detailed version
- Basuljevic v. Thornton Lauper · No. 1:24-cv-02023
- Andrew Carter
- Feb. 11, 2025
Background
On February 1, 2025, Defendant and Third-Party Plaintiff Declyn Wallace Thornton Lauper filed a letter stating that he had filed for Chapter 7 bankruptcy and that the automatic stay applied to the case.
Automatic stay
The court explained that Section 362 of the Bankruptcy Code automatically pauses the commencement or continuation of proceedings against a bankruptcy debtor. The court held that this automatic stay applies to the claims against Lauper in his role as Defendant. It does not apply to the claims Lauper brings as a Third-Party Plaintiff. The court relied on decisions explaining that Section 362 generally does not stay actions brought by the debtor that may benefit the bankruptcy estate.
Order
The court ordered the parties to file a joint letter on the docket by February 21, 2025, informing the court of their positions on whether it should exercise its discretion to stay Lauper’s third-party claims. The order did not decide whether those third-party claims should receive a discretionary stay and did not address the merits of the underlying claims.
Read the full 1-page opinion on CourtListener, the free public archive maintained by the Free Law Project.