Celotex Corp. v. Edwards, 514 U.S. 300, 16 (1995)

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Cite as: 514 U. S. 300 (1995)

Stevens, J., dissenting

Northbrook. For that reason, neither the automatic stay of proceedings against the debtor pursuant to § 362(a) of the Bankruptcy Code nor the Bankruptcy Judge's October 17, § 105(a) stay restrained the Edwards from proceeding against Northbrook to enforce Northbrook's obligations under the bond. As the Court of Appeals correctly held, the October 17 order enjoined the prosecution of proceedings involving "the Debtors," but did not expressly enjoin the Edwards from proceeding against Northbrook. See Edwards v. Armstrong World Industries, Inc., 6 F. 3d 312, 315 (CA5 1993).

On May 3, 1991, the Edwards commenced their proceeding against Northbrook by filing a motion pursuant to Rule 65.1 of the Federal Rules of Civil Procedure 2 to enforce the supersedeas bond. Several weeks later—on June 13, 1991— the Bankruptcy Court entered a new three-paragraph order enjoining all of Celotex's judgment creditors from collecting on their supersedeas bonds. Paragraph 1 of the order addressed creditors whose appellate process had not yet concluded. Paragraph 2 addressed creditors whose appellate process concluded only after Celotex had filed for bankruptcy. Paragraph 3 applied to judgment creditors, such as the Edwards, whose appeals had concluded before the filing of the bankruptcy petition. Paragraph 3 expressly precluded those creditors from proceeding against any bond "without first seeking to vacate the Section 105 stay entered by this Court." In re Celotex Corp., 128 B. R. 478, 485 (Bkrtcy. Ct. MD Fla. 1991).

2 Rule 65.1 states: "Whenever these rules . . . require or permit the giving of security by a party, and security is given in the form of a bond or stipulation or other undertaking with one or more sureties, each surety submits to the jurisdiction of the court and irrevocably appoints the clerk of the court as the surety's agent upon whom any papers affecting the surety's liability on the bond or undertaking may be served. The surety's liability may be enforced on motion without the necessity of an independent action."

315

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