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In re Mid-City Parking, Inc.

In re Mid-City Parking, Inc.

United States Bankruptcy Court for the Northern District of Illinois, Eastern Division

October 31, 2005, Decided ; October 31, 2005, Filed

Chapter 11, 04 B 45177

Opinion

 [*801] AMENDED MEMORANDUM OPINION

This matter presents the question of whether a trustee or debtor-in-possession may unilaterally waive the protections of the automatic stay to proceed with acts of estate administration that would otherwise violate 11 U.S.C. § 362(a) if performed by anyone else. Clark Polk Land, LLC ("Clark Polk") has requested an award of costs and attorneys' fees incurred as the result of an appeal that the debtor-in-possession, Mid-City Parking, Inc. ("Mid-City"), allegedly filed in willful violation of the automatic stay imposed by § 362(a). The Court holds that a trustee or debtor-in-possession has such authority and furthermore denies Clark Polk's motion.

 [*802] Background

Mid-City became a debtor-in-possession upon filing a petition for Chapter 11 bankruptcy relief on December 8, 2004, thereby triggering the automatic stay of 11 U.S.C. § 362(a).  [**2]  Prior to this filing, Clark Polk obtained a state court judgment against the debtor in the amount of $ 337,198.27 on August 4, 2004; the debtor's counterclaims against Clark Polk and Richard G'Sell were defeated the same day. On November 29, 2004, Clark Polk received an additional award of $ 90,582.08 for attorneys' fees, costs, and prejudgment interest. Subsequent to the Chapter 11 filing, on January 24, 2005, the debtor-in-possession appealed the entire $ 427,780.35 judgment to the Appellate Court of Illinois but did so without obtaining stay modification under § 362(d). Clark Polk brought a motion to dismiss the appeal before the Appellate Court of Illinois, arguing that the automatic stay in the Chapter 11 case prevented the debtor-in-possession from filing a notice of appeal from the state court judgment. On March 4, 2005, the Appellate Court of Illinois agreed with Clark Polk's position and dismissed Mid-City's appeal from the judgment.

In this bankruptcy case, Clark Polk has brought the instant motion for the costs and attorneys' fees incurred both to obtain dismissal of the state court appeal and to recover the costs and fees incurred in pursuing this motion. Clark Polk [**3]  contends that the award is warranted under 11 U.S.C. § 105(a) because Mid-City's violation of § 362(a) was willful - that is, because Mid-City was aware the stay existed when it engaged in an intentional act in violation thereof.

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332 B.R. 798 *; 2005 Bankr. LEXIS 2080 **; 45 Bankr. Ct. Dec. 173

In re: Mid-City Parking, Inc., Debtor.

CORE TERMS

debtor-in-possession, automatic stay, state court, cases, bankrupt estate, bankruptcy court, federal court, waive, entity, nonbankruptcy, protections, modification, bankruptcy trustee, bankruptcy case, unilaterally, exclusive jurisdiction, collateral attack, estate's representative, attorney's fees, debtors-in-possession, creditor-appellee, administering, so-called, powers, federal question, injunction, appealing, prosecute, modifies, restrain

Bankruptcy Law, Procedural Matters, Jurisdiction, General Overview, Civil Procedure, Subject Matter Jurisdiction, Jurisdiction Over Actions, Governments, Courts, Authority to Adjudicate, Examiners, Officers & Trustees, Duties & Functions, Automatic Stay, Relief From Stay, Procedural Matters, Reorganizations, Debtors in Possession, Powers & Rights, Preclusion of Judgments, Full Faith & Credit, Judgments, Preclusion of Judgments, Jurisdiction on Certiorari, Considerations Governing Review, State Court Decisions, Federal District Courts, Jurisdiction Over Actions, Exclusive Jurisdiction, Concurrent Jurisdiction, Administrative Powers, Preliminary Considerations, Jurisdictional Sources, Constitutional Law, Supremacy Clause, Scope of Stay, Claims Against Debtors, Claims Against Debtors, Judgments & Rulings, Enforcements, Claims Against Estate Property, Duties, Reorganizations, Estate Property, Avoidance, Limitations on Trustee Powers, Capacities & Roles, Case Administration, Legislation, Interpretation, Rule Application & Interpretation, Bankruptcy, Claims, Allowance of Claims, Estoppel, Collateral Estoppel, Objections to Claims, Violations of Stay, Void & Voidable Actions, Judicial Precedent, Judicial Review