The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge.
Defendant Bankers Trust Co. moves pursuant to Rule 62(d) of
the Federal Rules of Civil Procedure for a stay of execution
and enforcement of judgment pending appeal and also moves that
it not be required to post a supersedeas bond as a condition of
In considering whether to grant a stay of judgment pending
appeal, a court will consider whether the petitioner is likely
to prevail on the merits, whether the lack of a stay will
irreparably injure the petitioner, whether issuing a stay will
substantially injure the other party or parties, and whether
the public interest tends toward granting or denying the stay.
Morgan Guaranty Trust Co. v. Republic of Palau, 702 F. Supp. 60
(S.D.N.Y. 1988), vacated on other grounds, 924 F.2d 1237 (2d
Cir. 1991). Fed.R.Civ.P. 62(d) provides in part that "[w]hen an
appeal is taken the appellant by giving a supersedeas bond may
obtain a stay subject to the exceptions contained in
subdivision (a) of this rule."
1. Application for a Stay
Bankers Trust has not shown that it will be harmed in any way
if the stay is not granted. However, an application for a stay
of a money judgment is normally granted when a supersedeas bond
is posted to secure the amount of the judgment pursuant to
Fed.R.Civ.P. 62(d), pending appeal. Accordingly, the
application for a stay is granted, but Bankers Trust must post
a supersedeas bond.
2. Requirement of a Supersedeas Bond
Defendant Bankers Trust submits a copy of its 1990 Annual
Report in support of its argument that it should not be
required to post a bond to secure the judgment against it.
Affidavit of James T. Byrne, Jr., July 15, 1991, Exhibit A.
Defendant also cites Morgan Guaranty Trust Co. v. Republic of
Palau in support of not requiring it to post the bond as is
customary in this district and circuit. The facts of that case,
however, were unusual and do not resemble the present case.
Morgan Guaranty involved a $45 million judgment against Palau,
"an impecunious archipelago" which had defaulted on debts it
was unable to pay. 702 F. Supp. at 62. The District Court found
that requiring a bond in the full amount of the judgment would
not make a difference in whether or not Palau would eventually
satisfy the judgment against it and would have a severe impact
on Palau's public budget and fiscal health. Id. at 66. The
court required Palau to post a partial bond in the amount of
the interest payments due since default but did not excuse it
entirely from the bond requirement. 702 F. Supp. at 65.
Furthermore, in that case, the District Court relied on the
Second Circuit's opinion in Texaco Inc. v. Pennzoil Co.,
784 F.2d 1133 (2d Cir. 1986), rev'd on other grounds, 481 U.S. 1,
107 S.Ct. 1519, 95 L.Ed.2d 1 (1987), in which the Second
Circuit held that in some circumstances an "inflexible
requirement" for "denial of a stay of execution unless a
supersedeas bond is posted" can amount to unjust confiscation
of the debtor's property, 784 F.2d at 1154. Morgan Guaranty,
supra, 702 F. Supp. at 65. The circumstances in Texaco were that
Pennzoil had won a judgment of approximately $12 billion
against Texaco and posting a bond for that amount was likely to
force Texaco into bankruptcy or liquidation with severe
economic impact on hundreds of thousands of shareholders,
employees and others. The circumstances of this case are in no
way comparable to that situation or to the situation in Morgan
Bankers Trust's motion for a stay of execution of the
judgment against it is granted subject to the condition that it
post a supersedeas bond pursuant to Fed. R.Civ.P. 62(d), in the
full amount of the judgment against it plus the interest which
will accrue pending appeal.
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