Nuttery Farm, Inc

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
NUTTERY FARM, INC., 	No. 06-10386
Debtor(s).
______________________________________/
Memorandum on Motion for Stay Pending Appeal
_________________
Over a year ago, Chapter 7 Trustee Jeffrey Locke moved the court for approval of his sale of
the bankruptcy estate’s claims against Hendrick and Lettie Smeding, principals of the debtor, to the
Smedings for $10,000.00. A creditor, Ahcom, Ltd., objected and offered Locke a much better deal.
Several other creditors joined in the objection and supported Ahcom’s offer. At the hearing, the court
observed to Locke’s counsel that the Ahcom offer seemed much better for the estate, and Locke’s
counsel agreed. The court accordingly approved the sale to Ahcom.
There was a delay of almost a year in submission of an order to the court. The Smedings have
filed a notice of appeal, and now seek a stay pending appeal. The problems the court has with their
request is their standing and the merits of their arguments.
The Smedings argue that of course they have standing, since they own an equity interest in the
debtor. Quite so, they do have standing as principals although their interests may be secondary to the
interests of creditors. However, the Smedings do not appeal as equity ownership disappointed that the
trustee has sold an asset for too little so that there will be nothing left for them after creditors are paid.
Entered on Docket
August 02, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 06-10386 Doc# 57 Filed: 07/31/10 Entered: 08/02/10 15:59:25 Page 1 of 2

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They appeal as disappointed buyers, who generally lack standing. Raines v. Byrd, 521 U.S. 811, 819,
117 S.Ct. 2312, 2317, 138 L.Ed.2d 849 (1997); In re Fondiller, 707 F.2d 441, 442 (9th Cir.1983); see
also In re CFLC, Inc., 89 F.3d 673, 675 (9th Cir.1996) (unsuccessful bidders are generally not
“aggrieved” for standing purposes).
Despite having full knowledge of the proceedings, the Smedings made not a peep at the hearing
when the court confirmed the sale to Ahcom. Despite having almost a year to do so, the Smedings
never sought reconsideration or a chance to better the sale to Ahcom. Thus, they now find themselves
in the position of making arguments to the appellate court on issues that were never raised here.
Moreover, they have not demonstrated that the fundamental finding of the court - that the sale to
Ahcom was far better for the bankruptcy estate - is in any way subject to attack. Their sole stated basis
for appeal is alleged defects in the sale procedure, never approved by the court, which if true would
have been easily corrected had they come forward.
A party seeking a stay pending appeal must make a strong showing that it is likely to prevail on
the merits of the appeal or at least demonstrate a substantial case on the merits. 2A Fed.Proc.L.Ed,
Appeal, Certiorari, and Review, § 3:654. In this case, the court sees no merit to the appeal.
Accordingly, the court will deny any further stay pending appeal beyond that already granted. Any
party may submit an appropriate form of order.
Dated: July 31, 2010
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 06-10386 Doc# 57 Filed: 07/31/10 Entered: 08/02/10 15:59:25 Page 2 of 2