The opinion of the court was delivered by: LEWIS KAPLAN, District Judge
This is an appeal from a judgment of the Bankruptcy Court in favor of
plaintiff-appellee, the chapter 11 trustee of the estate of Paolo Gucci,
declaring void ab initio under United States law a judgment lien
filed against estate property in Rome, Italy, after the automatic stay
was in effect, which lien was based on a Swiss arbitration award obtained
by defendants against the debtor after the stay came into effect. The
matter now is before the Court on Plaintiff's motion, pursuant to
S.D.N.Y. Civ. R. 54.2, to condition the prosecution of the appeal upon
defendants posting security in an amount no less than $18,000 for costs
and $100,000 for attorneys' fees.
Local Rule 54.2 provides in relevant part that "[t]he court, on motion
or on its own initiative, may order any party to file an original bond
for costs or additional security for costs in such amount and so
conditioned as it may designate." Among the factors pertinent to the
exercise of the court's discretion under the rule are a party's financial
condition and ability to pay; its non-residence; the merits of its
position; the costs and, where recovery of attorneys' fees may be had,
fees to be incurred; and the conduct of the parties. E.g., Bressler
v. Liebman, No. 96 Civ. 9310 (LAP), 1997 WL 466553, *3-4, 9
(S.D.N.Y. Aug. 14, 1997).
Plaintiff argues principally that this is a frivolous appeal, that
sanctions under Rule 11 or 28 U.S.C. § 1927 are likely, that the defendants are Swiss
residents and thus unlikely to pay costs or any such sanctions in the
event plaintiff prevails.
Plaintiff's concern about the collectability of costs if he prevails
and sanctions against defendants if he obtains them is understandable.
But while there are serious problems with at least several of defendants'
appellate arguments, plaintiff probably is overly sanguine about the
likelihood of obtaining substantial sanctions from this Court, let alone
sustaining them on appeal.
Having considered all of the relevant factors, and in the exercise of
discretion, the motion to condition the prosecution of the appeal upon
defendants posting security is denied.
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