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 stayed Defendants’ counterclaims after JLM filed bankruptcy but left JLM’s claims proceeding.
JLM Couture, Inc.’s claims against Hayley Paige Gutman and Conrad Louis Clevlen were allowed to continue, while the Defendants’ counterclaims against JLM were stayed. JLM also must provide periodic bankruptcy-status updates to the court.
What happened
In JLM Couture, Inc. v. Gutman, JLM told the Southern District of New York that it had filed for Chapter 11 bankruptcy on October 2, 2023. The court considered whether the bankruptcy stay should apply to the claims and counterclaims in this case.
The court ordered that Defendants’ counterclaims against JLM were stayed under the bankruptcy law. It also ordered JLM to provide regular updates about its bankruptcy case, beginning by January 8, 2024, and every 90 days afterward until that proceeding ends or the court orders otherwise. JLM’s claims against Defendants were not stayed.
Sarah L. Cave, the United States magistrate judge who signed the order, did not decide the underlying claims. The order addressed only the effect of JLM’s bankruptcy filing on this case.
The detailed version
- JLM Couture, Inc. v. Gutman · No. 1:20-cv-10575
- Laura Swain
- Oct. 10, 2023
Background
On October 2, 2023, JLM Couture, Inc. filed a voluntary Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Delaware. On October 3, JLM filed a notice of the bankruptcy filing in this case.
The court explained that the Bankruptcy Code’s automatic stay generally stops actions against a debtor. Because JLM was the plaintiff, its own claims against Defendants were not automatically stayed. Defendants’ counterclaims against JLM, however, were automatically stayed because they were claims against the debtor.
The court had asked the parties to state their positions on whether it should also use its discretion to stay JLM’s claims. The parties submitted their positions on October 6, 2023.
Order
The court ordered that:
- Defendants’ counterclaims against JLM are stayed under 11 U.S.C. § 362. - JLM must file a status update about its bankruptcy proceeding by January 8, 2024, and every 90 days afterward until the bankruptcy proceeding ends, unless the court orders otherwise. - JLM’s claims against Defendants are not stayed.
Effect
This was an ancillary procedural order concerning the bankruptcy stay. It did not decide the merits of JLM’s claims or Defendants’ counterclaims.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.