IN RE: CALUMET FARM, INC. CASE NO. 91-51414
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF KENTUCKY
CALUMET FARM, INC. CASE NO. 91-51414
MIDLANTIC NATIONAL BANK PLAINTIFF
V. ADV. NO. 91-5204
CALUMET FARM, INC. et al. DEFENDANTS
This matter is before the court on the motion of Midlantic National Bank for a stay of enforcement of judgment in favor of Texas Commerce Bank and for an order approving payment of $898,988.85, plus accrued interest thereon, by defendant Equus Unlimited, Inc. to an escrow agent in satisfaction of the supersedeas bond requirement of rule 7062 of the Federal Rules of Bankruptcy Procedure.
Rule 7062 incorporates by reference rule 62 of the Federal Rules of Civil Procedure. Pursuant to rule 62(d) an appellant may obtain a stay upon the posting of a supersedeas bond. The court has the inherent discretion to determine the amount of the supersedeas bond or to permit an alternative form of security.
Midlantic, Equus, and CommerceNational Bank have each filed a notice of appeal from the court's summary judgment entered on May 5, 1993 in favor of Texas Commerce Bank. The court adjudged that the sum of $898,988.85 plus accrued interest, held by Equus is subject to the security interest of Texas Commerce Bank and is not subject to the security interest of Midlantic National Bank and is not subject to a right of set-off of Equus and ordered that these funds being held by Equus be paid to Texas Commerce Bank.
Midlantic proposes that in lieu of payment of these funds to Texas Commerce Bank that the funds be paid into an account and held in escrow pending the outcome of Midlantic's appeal, and the other appellants support this motion. This would be tantamount to requiring the appellee to post security for the appeals of the three appellants because the court has determined that they have no interest in the funds in question. An escrowing of these funds would not amount to a posting of security by the appellants such as would entitle them to a stay as a matter of right during appeal.
The court declines to grant a stay as a matter of discretion because it is of the view that there is little likelihood that the appellants will prevail on appeal, there is little likelihood of injury to them should they prevail because Texas Commerce can be ordered to disgorge the funds, and there is no element of public interest involved in this matter.
Accordingly, the motion of Midlantic for an order escrowing the funds in question is overruled.
By the court -
Laura Day DelCotto