Court Stops Lawsuit against Debtor

The Middle District of Florida recently ruled that the automatic stay is a blanket protection that applies to multiple creditor claims, even if there is not a perfect symmetry of parties.

Facts

In Peterson et al v. Avantair et al, Avaintair informed its employees that it could not make payroll almost simultaneously with its bankruptcy filing. Mr. Peterson, along with some other employees, personally sued Avantair’s corporate officers and senior managers for breach of contract, failure to pay minimum wage and several other causes of action.

The defendants argued that the case should be stayed as to the individual defendants while it was stayed as to Avantair under Section 362 of the Bankruptcy code, , while the plaintiffs stated that their case should be allowed to proceed, as the defendants had not technically filed bankruptcy.

Holding

The district court agreed with the defendants and stayed the case. Citing a 1936 case, the court stated that it had broad powers to stay a case to avoid “duplicative discovery, multiple hearings and inconsistent results.”

The court was convinced that, although there may have been some minor differences, the essentials of the case against the defendants and Avantair’s bankruptcy were substantially similar. The evidence would have been the same and the legal arguments for each side would have been much the same as well. The district court issued an order staying the case.

Bringing a business through bankruptcy is complex, and requires an attorney who understands the interplay of the business’s liabilities and the liabilities of its officers, directors, and owners.  We have experience representing small businesses and their owners through the bankruptcy process.

Contact our office in Melbourne, Florida for a free consultation with attorneys who are there to protect you.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you are interested in learning more about how a bankruptcy filing will impact your debt, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

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