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IN RE GUCCI

United States District Court, S.D. New York


May 5, 2004.

In re: PAOLO GUCCI, et al., Debtors FRANK G. SINATRA, etc., Plaintiff-Appellee, -against- ALESSANDRA GUCCI, at ano., Defendants-Appellants

The opinion of the court was delivered by: LEWIS KAPLAN, District Judge

ORDER

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. ยง 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.

  SO ORDERED.

20040505

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