JLM Couture, Inc. v. Gutman
- Laura Swain
- 1:20-cv-10575
- U.S. District Court · Southern District of New York
- 2
In JLM Couture v. Gutman, Judge Cave ruled that JLM’s bankruptcy automatically paused defendants’ counterclaims and ordered briefing on staying JLM’s claims.
JLM Couture, Inc.’s claims were not automatically stayed, while Hayley Paige Gutman and Conrad Louis Clevlen’s counterclaims against JLM were automatically stayed; the parties were also directed to address whether JLM’s claims should be stayed.
What happened
In JLM Couture, Inc. v. Gutman, JLM filed for Chapter 11 bankruptcy on October 2, 2023, and then notified the court of the bankruptcy in this case.
The court explained that bankruptcy law automatically pauses lawsuits against a debtor. Because JLM brought this lawsuit, its own claims against the defendants were not automatically paused, but the defendants’ counterclaims against JLM were.
Judge Sarah L. Cave ordered the parties to meet and file a joint letter addressing whether the court should also pause JLM’s claims.
The detailed version
- JLM Couture, Inc. v. Gutman · No. 1:20-cv-10575
- Laura Swain
- Oct. 5, 2023
Background
JLM Couture, Inc. filed a voluntary Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Delaware on October 2, 2023. The next day, JLM notified the district court of the bankruptcy in this case.
Court’s Analysis
The Bankruptcy Code generally creates an automatic stay, meaning that certain lawsuits against a bankruptcy debtor must pause. The court explained that this protection applies to actions against JLM, but not automatically to claims that JLM itself brought against the defendants. Therefore, JLM’s claims against Hayley Paige Gutman and Conrad Louis Clevlen were not automatically stayed.
The defendants’ counterclaims against JLM were different because they were claims against the bankruptcy debtor. The court concluded that those counterclaims were automatically stayed.
Order
The court directed the parties to meet and confer and file a joint letter by October 6, 2023, addressing whether the court should also stay, or pause, JLM’s claims. The order did not state that JLM’s claims were automatically stayed.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.