Shoppingtown Mall NY LLC

1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
__________________________________________
)
In re: ) Bankruptcy No. 19-23178-CMB
)
SHOPPINGTOWN MALL NY LLC, ) Chapter 11
)
Debtor. ) Related to Doc. Nos. 722, 726, 734,
) 735, and 736
__________________________________________)
NANCY CHAPPELL, individually and as )
Administratrix of the estate of STEPHEN )
GUDKNECHT, deceased; KEVIN HICKS, )
individually and as Administrator of the )
Estate of CHRISTOPHER C. HICKS, )
deceased; and JESSICA SAUM, )
)
Movants, )
)
v. )
)
SHOPPINGTOWN MALL NY LLC, )
)
Respondent. )
__________________________________________)
MEMORANDUM OPINION
Ultimately seeking to file a motion for retroactive relief from the automatic stay to allow
their wrongful death and personal injury litigation to proceed in state court, the Movants, Nancy
Chappell, individually and as Administratrix of the Estate of Stephen Gudknecht, deceased; Kevin
C. Hicks, individually and as the Administrator of the Estate of Christopher C. Hicks, deceased;
and Jessica Saum (the “Movants”), filed their Motion to Reopen (“Motion”) the closed bankruptcy
case of Shoppingtown Mall NY LLC (“Shoppingtown”). As more fully set forth herein, the Court
examines the potential futility of the underlying request for relief—in this instance, retroactive
relief from stay. Generally, the automatic stay is “a fundamental protection for all parties affected
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by the filing of a petition in bankruptcy.” In re Coletta, 380 B.R. 140, 147 n. 17 (Bankr. E.D. Pa.
2007), subsequently aff'd, 336 F. App'x 202 (3d Cir. 2009). Creditors have an affirmative duty to
not violate the automatic stay. In re Myers, 491 F.3d 120, 128 (3d Cir. 2007). Moreover, there is
a “rather narrow category of cases in which [retroactive stay] relief has been deemed appropriate,”
and retroactively annulling the stay requires a greater showing as “[the stay] should not be
dismantled without good reason.” Coletta, 380 B.R. 140, 147. The question is whether the Motion
should be granted to allow Movants to seek retroactive relief from the automatic stay. The Court
finds that the Motion must be denied.
Jurisdiction
This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 157 and 1334. Further,
this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A).
Factual Background1
Shoppingtown, as the owner and operator of a shopping center in DeWitt, New York, filed
its Chapter 11 Petition on August 13, 2019. See Doc. No. 1. The final day to file a proof of claim
was on December 31, 2019, and its Third Amended Chapter 11 Plan was confirmed on August 3,
2021. See Doc. Nos. 23 and 662. The Final Decree was entered on December 1, 2021, and the case
was closed on December 16, 2021. See Doc. Nos. 718 and 720.
During the pendency of Shoppingtown’s bankruptcy case, three complaints, all relating to
the same incident at the Chili’s Restaurant located on Shoppingtown’s real property, were filed
against Shoppingtown and other co-defendants by the Movants in the New York State Supreme
Court for the County of Onondaga.2 See Objection and Reservation of Rights at ¶7. Movants
1 These facts are generally undisputed unless otherwise noted.
2 The other co-defendants include Chili’s, Inc.; Pepper Dining, Inc.; Pepper Dining, Inc. Pepper Dining Holding Corp.;
Brinker Restaurant Corporation; Brinker International, Inc.; Pepper Dining, Inc. Brinker International Payroll
Company, LP; Chili’s Inc.; Shoppingtown Mall Management, LLC; Moonbeam Capital Investments, LLC;
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Chappell and Hicks filed separate wrongful death actions against Shoppingtown and the other co-
defendants respectively on August 21, 2020, and September 2, 2020; and Movant Saum filed a
personal injury suit against Shoppingtown and the other co-defendants on January 7, 2021. See id.
According to Movants, they were unaware of Shoppingtown’s pending bankruptcy case
when they filed their actions in state court and inadvertently violated the automatic stay. See
Motion at ¶8.3 Shoppingtown filed answers and amended answers to the complaints of the three
state court actions,4 and as an affirmative defense, it stated that Movants could not maintain an
action against Shoppingtown due to the bankruptcy.5 See id.; and Objection and Reservation of
Rights at ¶¶8-9. Based on the record, the earliest notice provided from the answers was on
February 3, 2021, and the latest was June 9, 2021, in the state court actions. See Exhibit A to
Motion and Exhibits A and B to Movants’ Reply in Support. The affirmative defense was the first
mention of the bankruptcy to the Movants by Shoppingtown, but it would not be the last.
On May 23, 2022, counsel for Shoppingtown and the other co-defendants sent a “pre-
conference statement” to the Honorable Scott DelConte6 and copied Movants’ counsel regarding
all three actions. See Exhibit A of Objection and Reservation of Rights. Within the letter, counsel
Moonbeam Leasing & Management, LLC; Moonbeam Holdings, LLC; Brinker, LLC; Brinker Services Corporation;
U.S. Security Associates, LLC; Allied Universal Security Services, Inc; XYZ Corporation #1 substituted – Allied
Security Holdings, LLC; XYZ Corporations #3 through 10, said true names being unknown and fictitious and ABC
other entities #1 through 10, said true names being unknown and fictitious. To the extent there appears to be
duplications of entities, this is an exact reproduction of the defendants listed on Exhibit A of the Motion.
3 Shoppingtown does not dispute that it did not list Movants as creditors in its bankruptcy case or amend its schedules
after the state court actions were commenced. See Debtor’s Response to Supplemental Memorandum at 4.
4 According to the Movants, their exhibits and examples are “from the personal injury action of [Movant] Saum;”
however, Shoppingtown filed “substantially identical papers in all three lawsuits.” See Motion at 4 n. 1. Thus, the
Court will, when referring to individual exhibits applicable to one state court action, presume similar language was
used in all three state court actions.
5 The Third Affirmative Defense of each answer from the exhibits states: “Upon information and belief, plaintiff’s
cause of action may not be maintained because defendant Shoppingtown Mall NY, LLC has been discharged from
liability in this action in bankruptcy.” See Motion at ¶8; Exhibit A of the Motion at ¶19; Exhibit A to Movants’ Reply
in Support at ¶19; and Exhibit B to Movants’ Reply in Support at ¶30. The Court notes that Movants rely heavily on
the mischaracterization of the claims being discharged, but this argument misses the mark. The affirmative defense
clearly provided notice of a bankruptcy case and the assertion that litigation was enjoined as a result.
6 Hon. Scott J. DelConte presides in the New York State Supreme Court for the County of Onondaga.
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specified that Shoppingtown had filed for bankruptcy prior to the commencement of the state court
actions. Id. 7 Additionally, the Movants asked Shoppingtown for a bill of particulars for more
clarification about its bankruptcy, and on June 30, 2022, Shoppingtown provided a “Verified Bill
of Particulars” stating that the Movants improperly commenced the state court proceedings as they
failed to file a motion for relief from stay in Shoppingtown’s bankruptcy case.8 See Exhibit B of
Motion.
Sometime in September 2025, Shoppingtown filed motions to dismiss the wrongful death
matters “on the basis that the automatic stay barred the litigation.”9 See Motion at ¶13. The motions
to dismiss are premised on Movants having commenced the actions in violation of the stay. See
Objection and Reservation of Rights at ¶30. If Movants fail to obtain retroactive relief from the
automatic stay, the statute of limitations would end in January 2023 for the wrongful death lawsuits
and in 2024 for the personal injury lawsuit, and Movants would be unable to re-commence their
litigation against Shoppingtown if the current actions are dismissed. Id. at ¶32. Consequently, on
January 14, 2026, Movants filed this Motion to reopen Shoppingtown’s bankruptcy case so that
they could then move for retroactive relief from stay in order for the state court actions to proceed
against Shoppingtown. See Motion.
7 The letter states in pertinent part: “As you may be aware, Shoppingtown Mall filed for bankruptcy protection well
prior to the commencement of these actions… Shoppingtown is protected by the provisions of the Bankruptcy Code
that provides for a stay against commencement of all proceedings against it during the bankruptcy proceedings.
Further, it does not appear these plaintiffs sought a lifting of such stay to commence these proceedings.” See Exhibit
A of Objection and Reservation of Rights.
8 In Exhibit B of the Motion, the first paragraph states “In regard to the Shoppingtown Mall defendants, the matter
was improperly commenced as the defendants had filed for Bankruptcy prior to the plaintiffs’ commencement of this
suit and plaintiffs have not sought permission from the Bankruptcy Court to commence an action against these
defendants.” See Exhibit B of the Motion. Paragraph two states, “Further, plaintiffs improperly commenced the action
against the Shoppingtown defendants in violation of the applicable Bankruptcy statutes.” Id. The third paragraph
states, “Upon information and belief, prior to commencing the action the plaintiffs failed to seek approval or a lifting
of the statutory stay which precludes the plaintiffs from commencing or continuing this action against them...” Id.
9 The Court notes that the filings indicate the motions to dismiss were only filed in the wrongful death actions.
However, the Court presumes that the additional Movant from the personal injury action joins in the Motion to avoid
the same consequence.
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Legal Standard
Reopening a closed case rests within the Court’s sound discretion. In re Roberts, 659 B.R.
271, 278 (Bankr. W.D. Pa. 2024) (citing In re Lazy Days’ RV Ctr., Inc., 724 F.3d 418, 422-23 (3d
Cir. 2013)). Under 11 U.S.C. § 350(b) and Fed.R.Bankr.P. 5010, a case may be reopened to
administer assets, to accord relief to the debtor, or for other cause. As enumerated in Roberts,
courts consider various factors to determine whether to reopen a closed case:
(1) the length of time the case has been closed; (2) whether the [moving] party may
obtain relief in an alternative forum; (3) whether any party would be prejudiced by
the reopening of the bankruptcy case; (4) any benefit that may accrue to the debtor
as a result of reopening; and (5) whether, if the case was reopened, the [moving]
party is entitled to any relief.
See id. The fifth factor specifically turns on the futility of reopening which requires an assessment
of whether the Court can provide the underlying relief sought through the motion to reopen and
whether reopening would be a waste of judicial resources. Id. at 280 (citing Redmond v. Fifth Third
Bank, 624 F.3d 793, 803 (7th Cir. 2010)). As succinctly put in Roberts, a movant “must
demonstrate that the chance of success in the underlying litigation is materially more than
negligible, but need not be certain.” Id. at 281. Notably, it is not required that the Movants “fully
prove the merits” of the underlying relief sought. Id. In the simplest of cases, futility is easily
revealed by “it [being] ‘clear at the outset that the [moving party] would not be entitled to any
relief if the case were reopened.’” Id. (quoting In re Antonius, 373 B.R. 400, 405-06 (Bankr. E.D.
Pa. 2007)).
To examine futility in this case, the underlying relief to be analyzed is the entitlement of
Movants to retroactive relief from stay. See generally Motion. When a debtor commences its
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bankruptcy, there is a general principle “that any creditor action taken in violation of an automatic
stay is void ab initio.” In re Siciliano, 13 F.3d 748, 750 (3d Cir. 1994). However, under 11 U.S.C.
§ 362(d), the Court may provide retroactive relief through the annulment of the stay. Id. at 751.
The use of the word “annulling” in § 362(d)— “the court shall grant relief from the stay…such as
by terminating, annulling, modifying, or conditioning such stay”—indicates a congressional intent
to “allow relief retroactively and validate proceedings that would otherwise be void ab initio.” Id.
However, the automatic stay is such an important component of bankruptcy that “creditors have
an affirmative duty to prevent violations of the automatic stay and may be held liable for passively
failing to prevent such violations.” Myers, 491 F.3d at 128.
Annulling the automatic stay is a decision that rests within the bankruptcy court’s
discretion. Id. When determining whether a stay should be annulled, there are multiple factors to
consider, and the bankruptcy court has “wide latitude” in evaluating these factors and “[balancing]
the equities when granting relief from the automatic stay.” 10 In re Coletta, 336 F. App'x 202, 205
(3d Cir. 2009) (citing Myers, 491 F.3d at 130). The most important factors are: “(1) whether the
creditor was aware of the filing or encouraged violation of the stay; (2) whether the debtor engaged
in inequitable, unreasonable, or dishonest behavior; and (3) whether the creditor would be
prejudiced.”11 Myers, 491 F.3d at 129. As the test requires balancing the equities, none of these
10 The Third Circuit in Myers noted that “there is ‘less appellate clarity’ as to the appropriate ‘test for retroactive stay
relief.’” 491 F.3d at 129. As the court further expounded in Coletta, “[s]ome cases have stated that retroactive
annulment of the automatic stay is only appropriate in ‘extreme circumstances,’ while other cases describe the ‘wide
latitude’ that a bankruptcy court has to balance the equities.” 336 F. App'x at 205 n. 3. Ultimately, “[although] it is not
clear what, if any, differences there are between these two approaches,” we must follow Myers in balancing the
equities, and “[e]ven those cases that have subscribed to a narrow conception of the power to retroactively annul the
stay have affirmed that balancing the equities is the appropriate test.” Id.; see also Myers, 491 F.3d at 129.
11 Courts within this circuit and outside apply a varying range of factors. Taking a more restricted view of the factors
in Myers, the court in Coletta only identified “[two] of the most pertinent factors [to be] whether a creditor violated
the automatic stay inadvertently and in ignorance of a pending bankruptcy and whether the debtor acted in bad faith.”
336 F. App'x at 205. Meanwhile, the lengthy list of factors from Fjelsted from the Ninth Circuit B.A.P. has been cited
as potentially relevant considerations:
1. the number of filings;
2. whether, in a repeat filing case, the circumstances indicate an intention to delay and hinder creditors;
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factors are dispositive alone. In re Speights, No. BANKR.08-11543DWS, 2008 WL 2096798, *2
(Bankr. E.D. Pa. May 15, 2008).
With respect to these significant factors, awareness of the debtor’s bankruptcy filing is
“treated as [having] knowledge of the automatic stay,” and “some courts have found that oral or
written notice of a bankruptcy filing is legally sufficient to convey knowledge of the automatic
stay.” In re Shaw, No. 25-12767, 2025 WL 2264394, *2 (Bankr. D.N.J. Aug. 7, 2025). Inequitable
behavior has been described as filing for bankruptcy in bad faith or the debtor “encouraging a
creditor to proceed notwithstanding the stay or lying in wait for the outcome of the creditor’s
actions, asserting its status as a bankruptcy debtor only after an outcome unsatisfactory to the
debtor becomes known” like utilizing tactics to delay foreclosure. Coletta, 380 B.R. at 147 n. 18.
Along with analyzing any prejudice faced by the Movants, the Court examines these significant
factors as a component of the request to reopen, specifically whether Movants have demonstrated
that the likelihood of obtaining retroactive relief from stay is materially more than negligible.
Application
As to the first factor of Roberts and the length of time which the case has been closed,
Shoppingtown’s bankruptcy case was closed on December 16, 2021. See Doc. No. 720. Movants
filed their Motion on January 14, 2026. See Motion. At the latest, Movants were aware of the
3. a weighing of the extent of prejudice to creditors or third parties if the stay relief is not made retroactive,
including whether harm exists to a bona fide purchaser;
4. the Debtor's overall good faith (totality of circumstances test);
5. whether creditors knew of stay but nonetheless took action, thus compounding the problem;
6. whether the debtor has complied, and is otherwise complying, with the Bankruptcy Code and Rules;
7. the relative ease of restoring parties to the status quo ante;
8. the costs of annulment to debtors and creditors;
9. how quickly creditors moved for annulment, or how quickly debtors moved to set aside the sale or violative
conduct;
10. whether, after learning of the bankruptcy, creditors proceeded to take steps in continued violation of the
stay, or whether they moved expeditiously to gain relief;
11. whether annulment of the stay will cause irreparable injury to the debtor;
12. whether stay relief will promote judicial economy or other efficiencies.
See Coletta, 380 B.R. at 147–48 n. 19 (citing In re Fjeldsted, 293 B.R. 12, 25 (B.A.P. 9th Cir. 2003)).
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bankruptcy case on June 9, 2021, evidencing significant delay. Shoppingtown’s case has been
closed for over four years, which weighs heavily against the reopening of its case.
As to the second factor, retroactive relief from stay may only be obtained through the
bankruptcy court. However, Movants intend to seek retroactive relief from stay to ultimately
overcome motions to dismiss in their state court actions. See Objection and Reservation of Rights
at ¶15. Movants and Shoppingtown do not discuss whether the Movants can possibly overcome
the motions to dismiss or potential statute of limitations issues without retroactive relief from stay
being granted, but for the purposes of weighing this factor, the Movants’ underlying relief sought
of retroactive relief from stay may only be granted in this Court. The second factor weighs in favor
of granting the Motion.
As to the third factor, Shoppingtown asserts it will be prejudiced by the reopening of the
bankruptcy case. Reopening the case would burden Shoppingtown with more fees and expenses
to defend against a motion for retroactive relief from stay which was not diligently pursued by
Movants. It is particularly prejudicial to Shoppingtown when the motion for retroactive relief from
stay would be futile. See infra. Likewise, when considering the fourth factor, there is no
foreseeable benefit to Shoppingtown in the reopening of its case, and it likely would be to
Shoppingtown’s detriment to do so. In fact, the only apparent benefit of reopening is to reward
Movants for their dilatory and violative conduct. These initial factors all together weigh against
reopening.
Further, as discussed herein, it is clear from the outset that Movants would not be entitled
to the underlying relief sought if the case were reopened, and thus, their Motion is futile. Movants
both contend that they never received notice until shortly before filing the Motion and that the
notice they received was inadequate. See Supplemental Memorandum at 4. It is unfathomable that
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Movants truly were not aware of Shoppingtown’s bankruptcy until shortly before the filing of this
Motion when Shoppingtown repeatedly raised the issue as a defense in the state court actions. See
supra n. 5, 7-8. Movants have the affirmative duty to prevent violating the automatic stay,12 and
Shoppingtown in its “Verified Bill of Particulars” and its pre-conference statement made it more
than clear that Movants’ continued actions in state court violated the automatic stay. See Motion
at ¶9; see id.13 In actuality, the record shows that Movants actively and affirmatively violated the
automatic stay by continuing to litigate their state court actions for years despite warnings from
Shoppingtown. See Myers, 491 F.3d at 129.
Movants specifically contend that they did not have notice of the bankruptcy because they
were not provided “with actual written notice of a debtor’s bankruptcy filing and bar claims date”
as known creditors to Shoppingtown. See Motion at ¶24. The awareness factor for retroactive relief
from stay weighs “whether the creditor was aware of the filing or encouraged violation of the
stay.”14 Myers, 491 F.3d at 129. As a foundational aspect of bankruptcy, the automatic stay is there
to protect the debtor and other creditors. Awareness of the bankruptcy filing, and therefore
awareness of the automatic stay, is evidently attributable to “oral or written notice of a bankruptcy
filing” and even correspondence between counsel which occurred between Shoppingtown and
12 Myers, 491 F.3d at 128.
13 The Court additionally notes that it finds Movants’ misrepresentation of the contents of the “Verified Bill of
Particulars” especially egregious as pointed out by Shoppingtown. See Motion at ¶12; see also Objection and
Reservation of Rights at ¶12. Movants conveniently left out the first two paragraphs of the “Verified Bill of Particulars”
in their Motion which specifically state that Movants are in violation of the automatic stay for continuing with the
state court actions. Id.
14 The Court distinguishes this from Movants’ reliance on Chemetron Corp. v. Jones in which “[t]he central
issue…[was] whether plaintiffs were ‘known’ or ‘unknown’ claimants…” See 72 F.3d 341, 345 (3d Cir. 1995). As
indicated in that case, “[i]nadequate notice is a defect which precludes discharge of a claim in bankruptcy.” See id. at
346 (emphasis added). The issue before this Court, however, is not the adequacy of notice for determining whether
these claims were discharged. Here, the argument is that the state court actions should not have been filed against
Shoppingtown due to the existence of the automatic stay thereby requiring dismissal. The consequence of that is the
potential inability to refile, not due to a discharge, but rather due to the expiration of the applicable statutes of
limitation.
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Movants in the state court actions. See Shaw, 2025 WL 2264394 at *2; see also In re Kim, No. 02-
20654 (GMB), 2008 WL 442120, *7-8 (Bankr. D.N.J. Feb. 14, 2008).
Even if Shoppingtown failed to provide a case number, court location, or claims bar date,
Movants were aware of the bankruptcy filing. See Motion at ¶11. From the answers, at minimum
Movants were aware that (1) a bankruptcy had been filed and (2) Shoppingtown’s position was
that Movants were unable to proceed against it as a result.15 Moreover, the “Verified Bill of
Particulars” and the pre-conference statement undoubtedly make applicability of the stay clear.
Movants have an affirmative duty to prevent violations of the automatic stay, and they failed to do
so.
There has been no suggestion that Movants attempted to investigate or were unable to
obtain information regarding the bankruptcy case. As argued by Shoppingtown, its bankruptcy
case was widely publicized in Onondaga County,16 and in July of 2021, this Court issued a
Memorandum Opinion in the bankruptcy which had been published and contained the bankruptcy
court and case number information. See In re Shoppingtown Mall NY LLC, 629 B.R. 391 (Bankr.
W.D. Pa. 2021).17 To the extent Movants assert that they were not aware of the bankruptcy until
shortly before filing this Motion, that cannot be true. The Movants simply cannot feign ignorance
to the existence of the bankruptcy case and the related automatic stay when it was disclosed in
Shoppingtown’s affirmative defenses, pre-conference statement, and “Verified Bill of Particulars.”
15 Regarding Movants’ litigation strategy in the state court actions, the Court also questions how Movants could
justifiably ignore the contention that the claims were discharged in bankruptcy, even though that was a
mischaracterization, without further inquiring into the status of Shoppingtown’s bankruptcy and independently
investigating.
16 See Debtor’s Response to Supplemental Memorandum at 4 n.2.
17 In this Internet age, the Movants could have easily found the information they claimed to lack, and clearly Movants
were eventually able to find the court and case number for Shoppingtown’s bankruptcy case as they have filed this
Motion herein.
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Moving onto whether Shoppingtown engaged in inequitable, unreasonable, or dishonest
behavior, the Movants contend that “[Shoppingtown’s] failure to disclose the claims, failure to
provide notice, [and] failure to obtain court approval for counsel” amount to inequitable conduct.
See Motion at ¶15. Under 11 U.S.C. § 521, debtors are required to file “a schedule of assets and
liabilities… and a statement of the debtor’s financial affairs.” Although Shoppingtown did not list
the Movants as creditors in its initial schedules or amend its schedules after the state court actions
were commenced, any culpability from Shoppingtown does not rise to the level of “inequitable,
unreasonable, or dishonest behavior” as it had absolved that conduct by giving notice to Movants
of its bankruptcy.18 See Myers, 491 F.3d at 129. See also In re Kim, 2008 WL 442120, at *6
(holding that the debtor rectified her inequitable behavior of failing to list the creditors in her
schedules by having her attorney contact the creditors regarding her bankruptcy). Additionally,
there is no indication of a purposeful omission by Shoppingtown from the initial schedules to
deceive Movants.19
Not applying in this Court for approval of special counsel to represent Shoppingtown in
the state court actions also does not rise to the level of inequitable conduct contemplated by
Myers.20 Id. There is no basis to find that Shoppingtown filed for bankruptcy in bad faith or as a
way to delay litigation in the state court actions. Shoppingtown’s actions cannot be construed as
18 Movants have the burden under a motion to reopen to show why the case should be reopened. Movants seem to
blame Shoppingtown for failing to take affirmative steps to enforce the automatic stay; however, that does not negate
the effect of the automatic stay. Movants have not shown how judicial estoppel applies here. See Motion at ¶30 and
Movants’ Reply in Support at 7-8.
19 Though it is clear that Shoppingtown was aware of the claims when the state court actions were commenced post-
petition, it is unclear when Shoppingtown had notice, if at all, prior to the commencement of the actions. To the extent
Shoppingtown’s failure to amend schedules is evidence of inequitable conduct, the Court weighs that against the
conduct of Movants. Further, Shoppingtown’s affirmative duty of disclosure does not negate the Movants’ obligation
to respect the automatic stay.
20 Under 11 U.S.C. § 330, a professional must be approved under 11 U.S.C. § 327 to receive compensation. The risk
of failing to obtain court approval is losing compensation for providing services. In re Young, 646 B.R. 779, 783
(Bankr. W.D. Pa. 2022). Here, it is not disputed that Shoppingtown’s counsel in the state court actions did not receive
approval. However, it is not alleged that counsel unjustifiably received compensation from the bankruptcy estate or
how this would amount to inequitable conduct in the context of resolving this Motion.
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amounting to inequitable conduct for the purposes of retroactive relief from stay, especially when
the Movants knew about Shoppingtown’s bankruptcy and encouraged stay violations by
proceeding with the state court actions despite having that knowledge.
If the Movants fail to obtain retroactive relief from stay, they may be prejudiced.
Shoppingtown, in the wrongful death actions, filed motions to dismiss on the basis that Movants
commenced the state court actions while the automatic stay was in place. Without retroactive relief
from stay, Movants face the unfortunate possibility that they would not be able to re-commence
their actions in state court against Shoppingtown due to the expiration of the statute of limitations.
Thus, there is potential harm to Movants if they do not obtain retroactive relief from stay.21
However, the Court notes that the automatic stay applied to actions against Shoppingtown, and
this Court’s ruling is not a statement regarding Movants’ ability to proceed against the numerous
co-defendants in the state court actions.
In balancing these factors to consider the futility of the Motion, the Court finds that it is
patently clear that the Movants would not be entitled to the underlying relief sought of a retroactive
relief from the automatic stay. It is extremely significant that Movants were aware of
Shoppingtown’s bankruptcy in 2021 but did not take steps to seek relief until 2026. At best,
Movants did not understand the gravity of the automatic stay and carelessly plodded onward in the
state court actions, and at worst, Movants deliberately ignored Shoppingtown’s warnings and
defenses including that Movants had commenced actions in violation of the stay. Either way,
seeking retroactive relief from stay would be futile.
21 If Movants had sought relief promptly after learning of Shoppingtown’s bankruptcy, instead of actively and
affirmatively violating the stay, relief may have been granted. See 11 U.S.C. § 362(d)(1).
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Conclusion
In consideration of all five Roberts factors, the Court finds that the Motion must be denied.
659 B.R. at 278. It is clear from the outset that the Movants would not be entitled to any relief
even if the case were reopened. To grant such a motion at this stage on this record wholly
undermines the purpose of the automatic stay and would appear to not only condone the failure to
take appropriate steps following notice but reward the failure. An appropriate Order will be entered
consistent with this Memorandum Opinion.
Date: August 27, 2026 __/s/ Carlota M. Böhm ________________
Carlota M. Böhm
United States Bankruptcy Judge
SIGNED
CLERK
U.S. BANKRUPTCY
COURT - WDPA
8/27/26 10:39 am
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