In Re: Mosdos Chofetz Chaim Inc.

Background

The appeal concerned a May 25, 2021 order from the United States Bankruptcy Court for the Southern District of New York. That order barred Rabbi Mayer Zaks from entering or remaining on property owned by Congregation Radin Development, Inc., including a yeshiva building, and from disrupting, conducting, or interfering with religious services or study there.

Zaks sought a stay pending appeal, meaning a pause of the bankruptcy-court order while the appeal proceeded. At an earlier hearing, he limited his request to two issues: whether the bankruptcy court had subject-matter jurisdiction over the underlying adversary proceeding and whether the injunction applied to him because of alleged problems with service or notice.

Legal standard

The district court applied the four-factor test for a stay pending appeal: likelihood of success on the merits, irreparable harm without a stay, harm to other interested parties, and the public interest. The party seeking the stay bears the burden of showing that the circumstances justify one.

Analysis

The court found that Zaks was not likely to succeed on his jurisdictional arguments. The parties did not dispute that the bankruptcy court had “related to” jurisdiction over the adversary proceeding. The court held that the bankruptcy court also had sufficient post-confirmation jurisdiction because the dispute had a close connection to the confirmed bankruptcy plan and the plan retained jurisdiction over disputes involving the plan, its enforcement, and the property sale. The underlying adversary proceeding challenged the validity of the plan-authorized sale of the property from Mosdos Chofetz Chaim Inc. to Congregation Radin Development, Inc.; the court found that this challenge could affect the bankruptcy estate and the plan’s implementation.

The court also rejected Zaks’s personal-jurisdiction arguments. Under Federal Rule of Civil Procedure 65(d)(2), an injunction can bind parties, their officers, agents, employees, and attorneys, as well as people acting in active concert or participation with them, when they receive actual notice. The court found that Zaks was a party to the underlying proceeding or, at minimum, an agent of a party or someone acting with a party. The court relied on representations that he had prayed, studied, and led Mosdos for more than 20 years and that he was Mosdos’s “Grand Rabbi,” a board member, and an officer. The court also found that he and his attorneys had received multiple notices concerning the injunction and its supporting materials.

The court found no irreparable harm. Although Zaks invoked religious-freedom rights, the court concluded that the injunction did not prevent him from freely exercising his religion because he had no right to enter or use property he did not own. The court found that granting a stay could harm Congregation Radin Development, Inc. by allowing Zaks to trespass on the property, while maintaining the injunction would not cause the type of harm required for a stay. The court likewise found that the public interest did not favor allowing conduct that would violate the property rights identified in the order.

Disposition

Judge Philip M. Halpern denied Zaks’s motion for a stay of the injunction pending appeal. The court also denied his renewed request for a temporary restraining order staying the injunction pending a hearing, stating that he had not shown entitlement to that relief and that the request was moot. The opinion does not state that either request was denied with or without prejudice.