IN RE NORTH AMERICAN MARKETING CORP., INC., Bankruptcy No. 81-01698-BKC-JAG

• Decision Date: 23 June 1982
• Docket Number: Bankruptcy No. 81-01698-BKC-JAG,Adv. No. 82-0124-BKC-JAG-A.
• Parties: In re NORTH AMERICAN MARKETING CORPORATION, INC., d/b/a Dollar Rent-A-Car, Debtor-in-Possession. NORTH AMERICAN MARKETING CORPORATION, INC., d/b/a Dollar Rent-A-Car, Debtor-in-Possession, Plaintiff, v. NATIONAL BANK OF FLORIDA, a national banking association, J.T. Haley and Theodore M. Goldberg, Defendants.
• Court: U.S. Bankruptcy Court — Southern District of Florida

24 B.R. 16 (1982)

In re NORTH AMERICAN MARKETING CORPORATION, INC., d/b/a Dollar Rent-A-Car, Debtor-in-Possession.

NORTH AMERICAN MARKETING CORPORATION, INC., d/b/a Dollar Rent-A-Car, Debtor-in-Possession, Plaintiff, v. NATIONAL BANK OF FLORIDA, a national banking association, J.T. Haley and Theodore M. Goldberg, Defendants.

Bankruptcy No. 81-01698-BKC-JAG, Adv. No. 82-0124-BKC-JAG-A.

United States Bankruptcy Court, S.D. Florida.

June 23, 1982.

J.T. Haley, c/o Britton, Cohen, Kaufman, Benson & Schantz, Miami, Fla., for defendants.

David Dittmar, c/o Gitlitz, Keegan & Dittmar, P.A., Miami, Fla., for plaintiff.

MEMORANDUM DECISION

JOSEPH A. GASSEN, Bankruptcy Judge.

North American Marketing Corporation ("North American"), the herein Debtor-in-Possession in this Chapter 11 case, brought an adversary proceeding against National Bank of Florida ("National Bank"), seeking to recover as property of the estate, a supersedeas bond which it had posted prior to bankruptcy. The bond was posted to stay the execution of a state judgment against North American in favor of National Bank which was the result of an action brought in the Circuit Court of Dade County, Florida. The bond allowed North American to prosecute an appeal of an adverse ruling as to a third party claim in the same state court action. North American did not appeal the judgment in favor of National Bank. The bond was funded in the form of a Money Market Certificate, drawn in the name of Theodore M. Goldberg and J.T. Haley, attorneys for North American and for National Bank respectively, as trustees. J.T. Haley and Theodore Goldberg, trustees of the Money Market Certificate, were named Defendants in the present adversary proceeding.

The appeal as to the third party claim was completed in October, 1981. In that same month, on October 20, 1981, North American filed its voluntary petition under Chapter 11 of the Bankruptcy Code. Over the objection of North American to the release of the bond and to its transfer to National Bank on grounds that the automatic stay provisions of the Bankruptcy Code prohibited such transfer, the State Court Judge concluded that the Money Market Certificate, which was pledged in trust to benefit National Bank, was neither legally nor equitably owned by North American, and entered an order releasing the bond and authorizing the trustees to endorse the Money Market Certificate to National Bank in satisfaction of the judgment.

Before that court order could be acted upon, North American filed this adversary proceeding alleging that the bond is property of the estate, seeking injunctive relief from this Court to enforce the stay provision of 11 U.S.C. § 362 and to prohibit the release of the bond to National Bank.

National Bank and Haley filed a Motion to Dismiss the Complaint, asserting that the supersedeas bond did not constitute property of the estate as defined by 11 U.S.C. § 541, that the stay provisions were not applicable, and that, therefore, the Complaint should be dismissed for lack of jurisdiction. The bank asserted further in its Motion to Dismiss that any application or enforcement of the automatic stay provisions of the Bankruptcy Code to countermand the State Court Order authorizing transfer of the funds would constitute an injunction against the State Court, an act which was beyond the power of the Bankruptcy Court by the express prohibitions of 28 U.S.C. § 1481. The matter was set for trial on April 13, 1982. Cross Motions for Summary Judgment were filed, briefed and argued on stipulated facts and exhibits.

The Complaint requires determination of whether the bond constitutes property of the estate and invokes the stay provisions of 11 U.S.C. § 362. This Court has jurisdiction to hear and determine this case.

The single issue to be decided by the Court is whether a supersedeas bond, which was posted by the Debtor several months prior to bankruptcy in the form of a Money Market Certificate drawn in the name of two attorneys as trustees for the Debtor, creates in the Debtor a...