Metro Bulletins Corp. v. Soboleski
In Metro Bulletins Corp. v. Soboleski, 30 Conn. App. 493, 620 A.2d 1314 (Conn. App. Ct. 1993), Metro Bulletins Corp. ("Metro") brought a breach of contract action against Louis Soboleski, who was president of Bridgeside Pontiac, Inc. ("Bridgeside"), for billboard advertising provided by Metro to Bridgeside. Id. at 1315. One week after suit was filed, Bridgeside filed a Chapter 11 bankruptcy petition. Id. at 1316. Soboleski then filed a motion to stay the proceedings as to him due to Bridgeside's Chapter 11 bankruptcy. Id.
The trial court denied the motion and ultimately entered judgment against Soboleski. Id.
On appeal to the Connecticut intermediate appellate court, the court first considered the "threshold question of whether the automatic stay provision of the federal bankruptcy law, 11 U.S.C. 362, was available to Soboleski," who was a nondebtor. Id.
Soboleski claimed the benefit of the stay, because a judgment against him was, in effect, a judgment against the debtor Bridgeside. Id. at 1317.
Instead of addressing the merits of Soboleski's argument, the court stated that "we must determine the procedure by which the nondebtor may obtain a stay." Id.
The Court first cited to the "weight of the case law" that an extension of the stay must be obtained in the bankruptcy court. Id. at 1317.
The court observed that no action had been taken to extend the automatic stay to Soboleski in the bankruptcy court. Id.
The court then stated:
"We believe that the cases requiring filing of the motion for an extension of the stay in the bankruptcy court represent the better reasoning. This is because it is fundamental under federal bankruptcy law that the automatic stay operates for the benefit of the debtor and trustee only, and gives other parties interested in property affected by the automatic stay no substantive or procedural rights. Only the bankruptcy court has the entire picture before it. It would be difficult, if not impossible, for a state trial court, which has only the immediate case before it, to determine the best interests of the bankruptcy estate." Id.
Accordingly, the court affirmed the trial court's denial of Soboleski's motion to stay. Id.