Garcia v. 3662 Broadway Restaurant Corp.

Background

Defendants 3662 Broadway Restaurant Corp., doing business as Taqueria San Pedro, and Albertico Chavez asked the court to issue an automatic stay. Their attorney stated that Chavez had filed a voluntary Chapter 13 bankruptcy petition on November 20, 2019, in the U.S. Bankruptcy Court for the Southern District of New York. The attorney also stated that Chavez wholly owned 3662 Broadway Restaurant Corp.

The corporate defendant argued that the bankruptcy stay should apply to it as well. It relied on a Second Circuit decision holding that a bankruptcy stay had protected a non-bankrupt corporation wholly owned by an individual debtor when deciding a claim against the corporation would immediately harm the debtor economically. The letter also discussed conflicting district and bankruptcy court views about whether that principle applies when the individual files under Chapter 13.

Ruling

Judge Edgardo Ramos endorsed the motion with the following disposition: “This motion is STAYED pending resolution of the same motion in the related case Lopez v. 3662 Broadway Restaurant Corp., 19 Civ. 975, Doc. 24.” The opinion therefore stayed the motion; it did not state that the court decided whether the bankruptcy stay extends to the corporate defendant or otherwise resolve the underlying dispute.