IN RE BOYER

LORRAINE WEIL, Bankruptcy Judge

WHEREAS, on October 19, 2006 this court issued a certain memorandum and order (Doc. I.D. No. 131, the "Prior Decision") approving (over the objection of Republic Credit Corporation I (the "Movant")) a settlement (the "Settlement") between the chapter 7 trustee (the "Trustee") and Mary C. Boyer;

WHEREAS, on October 27, 2006 the Movant filed a notice of appeal (Doc. I.D. No. 133) with respect to the Prior Decision (the "Appeal");

WHEREAS, on October 31, 2006 the Movant filed its Motion for Order of Stay Pending Appeal Pursuant to Fed.R.Bankr.Proc. 8005 (Doc. I.D. No. 135, the "Motion") seeking a stay pending appeal of the order (the "Order") contained in the Prior Decision. The above-referenced debtor (the "Debtor") and Mary C. Boyer have filed an objection thereto. ( See Doc. I.D. No. 144, the "Objection.");

WHEREAS, the Motion originally was scheduled for a hearing on November 15, 2006 but was rescheduled by the court ( sua sponte) for November 8, 2006 (the "Hearing"). The Movant, the Trustee, the Debtor and Mary C. Boyer appeared (through counsel) at the Hearing. The Trustee supported the Objection at the Hearing;

At the Hearing, Attorney Arcaro did not appear for the Debtor but Attorney Boatman appeared for both the Debtor and Mary C. Boyer.

WHEREAS, at the Hearing Mary C. Boyer represented (through counsel) that (a) she and the Trustee would close on the Settlement if there were no stay of the Order but (b) she would remain committed to the Settlement pending resolution of the Appeal in the District Court;

WHEREAS,

[t]he standard in this circuit for a stay or injunction pending appeal is

(1) whether the movant will suffer irreparable injury absent a stay, (2) whether a party will suffer substantial injury if a stay is issued, (3) whether the movant has demonstrated "a substantial possibility, although less than a likelihood, of success" on appeal, and (4) the public interests that may be affected.

LaRouche v. Kezer, 20 F.3d 68, 72 (2d Cir. 1994); WHEREAS, the court concludes that the first LaRouche factor favors the Movant. Even if the Debtor does not receive a discharge, he appears to be judgment proof and likely to remain so. See Prior Decision at 24 (discussing the foregoing point). The Movant will not receive a distribution in this case (although senior creditors will if the Settlement closes). ( See Prior Decision.) The Movant's theories against Mary C. Boyer and other parties to be released pursuant to the Settlement may be the only chance the Movant has for recovery on its (assigned) claim. If the Settlement closes, and that closing cannot be undone, that chance for recovery by the Movant will have disappeared (either entirely or in substantial part);

The court does not believe it appropriate to consider in this context the Movant's likelihood of recovery on those third-party claims.

WHEREAS, the court concludes that the second LaRouche factor favors the Movant. Mary C. Boyer's desire for immediate "peace" will be substantially thwarted if the Order is stayed. Distribution to senior creditors in this chapter 7 case will be delayed if the Order is stayed. Neither injury outweighs the risk of injury to the Movant;

WHEREAS, the court concludes that the third LaRouche factor is satisfied. Even though the court considers it unlikely that the Movant will prevail on appeal, given the novel situation presented in this case the court cannot say that the Appeal is entirely frivolous. Cf. Balcor Pension Investors V v. Wiston XXIV Limited Partnership (In re Wiston XXIV Limited Partnership), 161 B.R. 70, 72 n. 3 (D. Kan. 1993) ("As a novel legal issue, this court cannot say that the debtor has no likelihood of success on appeal."); In re Mader, 100 B.R. 989, 991 (N.D. Ill. 1989) ("[T]he novel legal issue presented is not one in which the debtor has no likelihood of success."); WHEREAS, the court concludes that the fourth LaRouche factor also favors the Movant. It is public policy to favor reasonable settlements. However, the reasonableness of the Settlement is the point at issue in the Appeal. Given the circumstances presented here, the public policy favoring expeditious administration of bankruptcy cases does not outweigh the other LaRouche factors;

Given the nature of the threatened injury to the Movant, the court believes it appropriate to apply the LaRouche stay-pending-appeal standard concerning the likelihood of success on appeal as opposed to a higher standard. Cf. In re Cacioli, 302 B.R. 429, 431 n. 3 (Bankr. D. Conn. 2003) (Dabrowski, C.J.) (noting two standards).

WHEREAS, balancing all of the LaRouche factors, the court concludes that the Motion should be granted and the Objection should be overruled;

NOW, THEREFORE, for the reasons set forth above, it hereby is ORDERED that the Motion is granted and the Objection is overruled; and it is further

ORDERED that the Order is stayed pending conclusion of the Appeal proceedings in the District Court; and it is further

ORDERED that the Clerk's Office shall serve this order upon the Trustee and upon counsel for each of the other above-listed appearing parties.