Memorial Medical Center, Inc.

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
PACER Cover Sheet
for Electronically Filed Documents
Any data shown here are current as of 	. Any element of information on this form,
except the received date, is subject to change as changes may be made to the Court's official docket.
Case Title:
Case Number:
Document Information
Description:
Date Filed:
Date Entered On
Docket:
Filer Information
Submitted By:
If this form is attached to the document identified above, it serves as an endorsed copy of the
document as it existed on the above date. To confirm that nothing has changed since then,
review the docket.
06/10/06
Memorial Medical Center, Inc.
05-14043
Order Granting [30-1] Motion For Stay of Order Dismissing Involuntary Petition
Pending Appeal by Toshiba American Medical Systems, Inc., Cardinal Health 303,
Inc., and Cardinal Health 301, Inc..
Received on: 2005-11-21 13:42:48.000
2005-11-21 00:00:00.000
2005-11-21 00:00:00.000
Patti Hennessy
Case 05-14043-m7 Doc 35 Filed 11/21/05 Entered 11/21/05 16:03:00 Page 1 of 6

1Cardinal Health 301, Inc., Cardinal Health 303, Inc., and Toshiba American Medical
Systems, Inc. (together “Petitioning Creditors”) initiated the involuntary proceeding against Memorial
Medical Center, Inc.
1
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: MEMORIAL MEDICAL CENTER, INC., No. 7-05-14043 MA
Alleged Debtor.
ORDER GRANTING PETITIONING CREDITORS’ MOTION FOR ENTRY
OF ORDER STAYING ORDER DISMISSING INVOLUNTARY PETITION
PENDING APPEAL
THIS MATTER is before the Court on the Petitioning Creditors’ Motion for Entry of Order
Staying Order Dismissing Involuntary Petition Pending Appeal (“Motion for Stay Pending Appeal”).
The Court held a final hearing on the Motion for Stay Pending Appeal on November 18, 2005 and
took the matter under advisement. The Motion for Stay Pending Appeal requests that a stay of this
proceeding be granted pending the outcome of Petitioning Creditors’1 appeal to the Bankruptcy
Appellate Panel of the Tenth Circuit of this Court’s order dismissing the involuntary petition filed against
Memorial Medical Center, Inc. (“MMCI”). Having considered the standards applicable to granting a
stay pending appeal in light of the current posture of this proceeding and the proceedings involving
MMCI in state court, the Court finds that a stay pending appeal is warranted.
A request for stays pending appeal is governed by Rule 62, Fed.R.Civ.P., made applicable to
bankruptcy proceedings by Rule 7062, Fed.R.Bankr.P., and Rule 8005, Fed.R.Bankr.P. Rule 8005
of the Federal Rules of Bankruptcy Procedure governs the procedure for obtaining a stay pending
appeal. It provides in relevant part:
Case 05-14043-m7 Doc 35 Filed 11/21/05 Entered 11/21/05 16:03:00 Page 2 of 6

2Rule 62(d), Fed.R.Civ.P., which requires the posting of a supersedeas bond, has not been
evoked by the Petitioning Creditors.
3Stated slightly differently, the considerations for determining whether to grant a stay pending
appeal are:
1. Which party would be most harmed--the movant by denial of the stay or other parties by the
granting of the stay;
2. Significance of issues on appeal;
3. Prospect of success on appeal; and,
4. Which side will be the least harmed by a ruling adverse to its position with respect to the
stay.
In re Bud Long Chevrolet, Inc., 26 B.R. 592, 593 (Bankr.D.N.M. 1983).
2
A motion for a stay of the judgment, order, or decree of a bankruptcy judge, for
approval of a supersedeas bond, or for other relief pending appeal must ordinarily be
presented to the bankruptcy judge in the first instance. Notwithstanding Rule 7062 but
subject to the power of the district court and the bankruptcy appellate panel reserved
hereinafter, the bankruptcy judge may suspend or order the continuation of other
proceedings in the case under the Code or make any other appropriate order during the
pendency of an appeal on such terms as will protect the rights of all parties in interest.
Rule 8005, Fed.R.Bankr.P.
Rule 62(c)2, Fed.R.Civ.P. provides, in relevant part, that “the court in its discretion may suspend,
modify, restore, or grant an injunction during the pendency of the appeal . . .” Rule 62(c),
Fed.R.Civ.P., made applicable to bankruptcy proceedings by Rule 7062, Fed.R.Bankr.P.
The party seeking a stay pending appeal bears the burden of proof. See In re Yellow Cab Co-Op
Ass’n, 192 B.R. 555, 557 (D.Colo. 1996). The standards for granting a stay pending appeal are the
same as the standards considered in determining whether to grant a preliminary injunction. Id.; In re
Porter, 54 B.R. 81, 82 (Bankr.N.D.Okla. 1985). The following four factors3 are relevant to the
determination of whether to grant a stay pending appeal:
Case 05-14043-m7 Doc 35 Filed 11/21/05 Entered 11/21/05 16:03:00 Page 3 of 6

3
(1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the
likelihood that the moving party will suffer irreparable injury unless the stay is granted; (3)
whether granting the stay will result in substantial harm to the other parties to the appeal; and
(4) the effect of granting the stay upon the public interest.
In re Lang, 414 F.3d 1191, 1201 (10th Cir. 2005) (citations omitted).
Relevant to the determination of the likelihood of success on appeal is whether the questions presented
on appeal are “‘so serious, substantial, difficult, and doubtful as to make them a fair ground for litigation
and thus for more deliberate inquiry.’” Yellow Cab, 192 B.R. at 557 (quoting United States ex rel.
Citizen Band Potawatomi Indian Tribe v. Enterprise Management Consultants, Inc., 883 F.2d
886, 889 (10th Cir. 1989)).
In applying these standards to this proceeding, the Court is persuaded that Petitioning Creditors
have met their burden of showing that a stay pending appeal should be granted. Prior to the filing of
the involuntary petition, there were two matters involving MMCI pending in state court, one initiated by
Petitioning Creditors against MMCI including claims based on breach of contract, fraudulent
conveyances, and tortious interference with contract (Case No. 05-456), and one initiated by MMCI
seeking the appointment of a receiver to liquidate its remaining assets (CV 05-733). If no stay pending
appeal is granted, Petitioning Creditors face the potential for irreparable harm, since continuation of the
state court receivership action will result in the liquidation of MMCI’s assets. Upon liquidation, it will
be difficult, if not impossible, to unravel the liquidation if the involuntary bankruptcy is reinstated. Once
the assets are liquidated through the state court receivership action, reversal of this Court’s order will
not afford Petitioning Creditors any relief, and the appeal will become moot.
The harm to MMCI, on the other hand, is less real. The filing of the involuntary petition against
Case 05-14043-m7 Doc 35 Filed 11/21/05 Entered 11/21/05 16:03:00 Page 4 of 6

4
MMCI stayed the state court proceedings, and by staying the dismissal of the involuntary petition
pending appeal, the state court proceedings will remain stayed. The harm in requiring MMCI to await
the outcome of a decision on appeal is not so great as to tip the balance in its favor. Although MMCI
asserted that it could suffer monetary harm if its efforts to liquidate in state court remain stayed, no
evidence of potential monetary harm was offered in support of this argument. Petitioning Creditors
have satisfactorily shown that the harm it may sustain if the stay were not granted outweighs the
potential harm imposing a stay would cause to MMCI.
The question on appeal is a matter of law, and it is a question of first impression within this
Circuit. Thus, while weighing the likelihood of success on appeal is problematic for any decisional
court, the Court recognizes that the standard of review and the novelty of the issue on appeal weigh in
favor of granting a stay pending appeal. Petitioning Creditors should not be precluded from obtaining a
decision on this question of law due to the possibility that continuation of the state court matter will moot
the appeal.
Finally, granting a stay pending appeal is not contrary to the public interest. The assets of
MMCI will ultimately be liquidated, either through the state court actions, or through a bankruptcy
proceeding. Awaiting the outcome of the appeal will not cause undue delay in this process and will
ensure that, in the event the dismissal order is overturned, an estate will exist for an orderly liquidation
through bankruptcy. It is also in the public interest to allow parties who have the right to appeal the
opportunity to appeal, and the entry of a stay pending appeal fosters that interest.
WHEREFORE, IT IS HEREBY ORDERED, that the Petitioning Creditors’ Motion for Entry
of Order Staying Order Dismissing Involuntary Petition Pending Appeal is GRANTED.
Case 05-14043-m7 Doc 35 Filed 11/21/05 Entered 11/21/05 16:03:00 Page 5 of 6

5
The dismissal of the involuntary petition is stayed pending the outcome of the appeal.
______________________________________________
MARK B. McFEELEY
United States Bankruptcy Court
I certify that on the date shown on the attached document verification, a true and correct copy of
the foregoing was either electronically transmitted, faxed, delivered or mailed to the listed counsel
and/or parties.
Ross Cooper
Attorney for Petitioning Creditors
11921 Rockville Pike, Third Floor
Rockville, MD 20852 -2737
Daniel J. Behles
Attorney for Petitioning Creditors
226-A Cynthia Loop NW
Albuquerque, NM 87114 -1100
Gail Gottlieb
Christopher Holland
Attorneys for Memorial Medical Center, Inc.
PO Box 1945
Albuquerque, NM 87103 -1945
Mark S. Pfeuffer
Attorney for Pension Benefit Guaranty Corporation
1200 K Street NW
Washington, DC 20005 -4025
George “Dave” Giddens, Jr.
Attorney for Personal Representatives of Estates
10400 Academy Rd NE Ste 350
Albuquerque, NM 87111 -1229
________________________________
Patti G. Hennessy
Law Clerk
(505) 348-2545
Case 05-14043-m7 Doc 35 Filed 11/21/05 Entered 11/21/05 16:03:00 Page 6 of 6