United States District Court, D. Nevada
In re R & S ST. ROSE LENDERS, LLC, Debtor.
R & S ST. ROSE LENDERS, LLC, R&S ST. ROSE, LLC, R & S INVESTMENT GROUP, COMMONWEALTH LAND TITLE INSURANCE COMPANY, THE CREDITOR GROUP, AND U.S. TRUSTEE, Appellees. BRANCH BANKING AND TRUST COMPANY, Appellant,
ORDER (APPELLANT'S EMERGENCY MOTION TO STAY - ECF
MIRANDA M. DU UNITED STATES DISTRICT JUDGE
case concerns an appeal of a decision of the Bankruptcy Court
for the District of Nevada in which the court confirmed
debtor R & S St. Rose Lenders, LLC's
(“Lenders”) Third Amended Plan of Liquidation.
Before the Court is Branch Banking and Trust Company's
(“BB&T”) Emergency Motion to Stay Pending
Appeal Pursuant to Federal Rule of Bankruptcy Procedure 8007
(“Motion”) (ECF No. 2). Appellee/debtor Lenders
filed a response (ECF No. 5) and BB&T filed a reply (ECF
reasons discussed below, the Motion is denied.
this appeal concerns the bankruptcy of Lenders, the
bankruptcy of a related entity, R&S St. Rose, LLC
(“Rose”), is relevant in understanding the
procedural posture of this case. The following facts are
taken from BB&T's Motion.
was created to purchase 38 acres of raw land located in
Henderson, Nevada (“the Property”), while Lenders
was formed for the sole purpose of real estate
investment.(ECF No. 2 at 3.) Rose obtained a $29,
305.250 (“Acquisition Loan”) from Colonial Bank,
N.A. (“Colonial”) in August of 2005, which was
secured by a first position deed of trust recorded against
the Property. (Id. at 4.) In addition, Rose obtained
additional funds from a group of investors whose loans were
secured by a deed of trust (“Lenders DOT”) that
was recorded in second position against the Property. Rose
obtained title to the property around August 25, 2005.
issued a second loan to Rose in 2007 for $43, 980, 000
(“Construction Loan”) to develop the Property,
which was secured through a Deed of Trust and Security
Agreement and Fixture Filing with Assignment of Rents
(“Colonial DOT”). Some of the Construction Loan
was used to pay off the Acquisition Loan. (Id. at
5.) Colonial required (and believed it received) a first
position deed of trust against the Property for the
Construction Loan. Colonial conditioned disbursements of the
Construction Loan on receiving this first positon deed of
trust, which would have required that the Lenders DOT be
released or subordinated. However, sometime between July and
September of 2008, it became apparent that the Lenders DOT
and not the Colonial DOT had been placed in first position
against the Property.
August of 2009, BB&T became the successor-in-interest to
Colonial after the Federal Deposit Insurance Corporation was
appointed as received for Colonial.
April 4, 2011, Rose and Lenders filed separate voluntary
Chapter 11 bankruptcy petitions (“Rose Case”). On
August 2, 2013, Rose filed a proposed Chapter 11 liquidating
plan (“the Rose Plan”) in its bankruptcy case,
which was then confirmed by order of the bankruptcy court on
November 8. The Court ordered that the Property be sold.
Pursuant to the Rose Plan, the net proceeds from this sale
were then paid to Lenders. According to BB&T, Lenders
reported a cash balance of $11, 685, 324 in March of 2017.
April 18, 2016, Lenders filed a proposed Chapter 11
liquidating plan (“the Lenders Plan”) in Lenders
Case, and a revised version of this Plan was filed on
November 1. (Id. at 9.) On November 7, the
bankruptcy court held an evidentiary hearing, which resulted
in the bankruptcy court's confirmation of the
Lender's Plan. The bankruptcy court's order
confirming the Lenders' Plan was entered on April 28,
2017. (See Lenders Case, ECF No. 1039.) That same
day, BB&T filed a notice of appeal of the bankruptcy
court's confirmation order as well as a motion to stay
pending appeal (see Lenders Case, ECF No. 1043).
(ECF No. 2 at 10.) On May 10, 2017, the motion to stay was
heard by the bankruptcy court and continued to May 12, 2017,
for further proceedings. However, on May 12, 2017, the
bankruptcy court denied BB&T's motion to stay.
filed its election to appeal the bankruptcy court's
confirmation order to the District Court on May 3, 2017.
argues that its emergency motion should be granted because,
“[s]hould the Lenders Plan be implemented,
approximately $5, 000, 000.00 will be distributed to the
holders of claims in Class 1 beyond any meaningful recovery
should BB&T succeed on various appeals.” (ECF No. 2
at 10.) In its Motion, BB&T makes reference to three
other distinct appeals,  claiming that success on any of these
appeals “will eliminate Lenders' ability to
distribute funds under the Lenders Plan.” (Id.
at 3.) Although these appeals, if successful, may change the
nature and amount of disbursement under the Lenders Plan, the
Court may not consider the existence or potential success of
these appeals in its analysis. This Court's jurisdiction
and consideration of the Motion is limited to the appeal of
the bankruptcy court's confirmation of the Lenders Plan
in Lenders Case (and not the Rose Case). Because BB&T
fails to focus ...