All Year Holdings Limited v. Silberstein

Background

The defendant sought a stay of an adversary proceeding pending in the United States Bankruptcy Court for the Southern District of New York. He also had a separate motion pending in the district court seeking to withdraw the bankruptcy court’s reference of the adversary proceeding and to compel arbitration under a November 2015 agreement.

The defendant filed the stay motion under Federal Rule of Bankruptcy Procedure 5011(c), arguing that the bankruptcy proceeding should pause while the district court decided the motion to withdraw the reference and compel arbitration. While the stay motion was pending, discovery was completed, and the plaintiff amended its complaint to add claims based on the same operative facts. The bankruptcy court then allowed the plaintiff to seek partial summary judgment on certain claims.

On February 19, 2025, the bankruptcy court denied the plaintiff’s motion for partial summary judgment in its entirety. The defendant then reported that this decision had made the stay request moot, although the separate motion to withdraw the reference and compel arbitration remained pending.

Ruling

The district court denied the defendant’s application to stay the adversary proceeding as moot. The court directed the Clerk of Court to terminate ECF No. 12. It also scheduled a status conference for April 7, 2025, at 11:45 a.m.

The order did not rule on the defendant’s motion to withdraw the bankruptcy court’s reference or compel arbitration. It likewise did not decide the merits of the underlying claims. The order noted that those issues remained pending and that the arbitration question should be addressed before the parties and court spent substantial resources preparing for a possible jury trial.