IN RE HMY ROOMSTORE, INC. (Bankr.E.D.Va. 2005)

DOUGLAS TICE, Chief Judge, Bankruptcy

Upon consideration of the motion (the "Stay Motion") [D.I. 6052] of Wachovia Bank, N.A. ("Wachovia"), as Collateral Agent for the Pre-Petition Lenders, for stay of Order of Confirmation, entered May 18, 2005 [D.I. 6047] (the "Confirmation Order"), confirming the Amended and Restated Joint Plan of Reorganization Proposed by HMY RoomStore, Inc. and the Official Committee of Unsecured Creditors (the "RoomStore Plan"), and the Court having considered the Joint Objection of HMY RoomStore, Inc. and the Official Committee of Unsecured Creditors to the Stay Motion, filed May 23, 2005 [D.I. 6062] and the record and evidence adduced at the Confirmation Hearing, after due deliberation,

1. All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Confirmation Order.

2. The Court has jurisdiction pursuant to 28 U.S.C. §§ 157 and 1334.

3. Applying the standards for issuance of a stay pending appeal set forth in Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189 (4th Cir. 1977), the Court finds that each of the Blackwelder factors weighs in favor of denying the Stay Motion.

4. First, the Court finds that Wachovia has failed to demonstrate that it will suffer irreparable injury should the stay be denied because a meaningful judicial remedy can be fashioned with respect to the assets of the Affiliated Debtors' bankruptcy estates in the unlikely event Wachovia is successful on appeal. The record reflects that the value of the Affiliated Debtors' bankruptcy estates exceeds Wachovia's purported claim for post-petition interest, fees, and costs. Accordingly, Wachovia's remedies will not be prejudiced by denial of the stay request.

5. Second, unlike Wachovia, the Court finds that RoomStore and its unsecured creditors will suffer irreparable harm if the stay is entered. The record reflects that delaying consummation of the RoomStore Plan will impact negatively RoomStore's ongoing operations which, in turn, will impair significantly the reorganization value of RoomStore. The record also reflects that the resulting delay from entry of a stay could lead to the loss of key RoomStore managerial personnel, and will interfere with RoomStore's proposed exit financing commitment set to expire on June 1, 2005.

6. Third, the Court finds that Wachovia has not demonstrated the likelihood of success on the merits of its appeal. The Court specifically finds that Wachovia's procedural and substantive due process arguments lack merit as Wachovia was (i) fully apprised of the issues to be litigated at the confirmation hearing, (ii) afforded a full and fair opportunity to engage in discovery, (iii) afforded a full and fair opportunity to litigate meaningfully its claim for post-petition interest, fees and costs, and (iv) not in any way prejudiced by the Court's resolution of the collateral cap issues at the Confirmation Hearing. Further, the reason that the collateral cap issue was determined at the Confirmation Hearing was because Wachovia raised the issue in its objection to the RoomStore plan.

7. Finally, the Court further finds that the public interest in promoting the successful reorganization of chapter 11 debtors weighs in favor of denying the Stay Motion.

1. The Stay Motion is DENIED in its entirety.

2. The Court shall retain jurisdiction with respect to any matters related to or arising from this Order.