Market Center East Retail Property, Inc.

1 To be precise, the Order reads in part:
IT IS ORDERED that the Lurie and Park [sic] is
awarded Compensation and reimbursement of expenses
totaling $350,752.06 as an administrative expense of
the estate.
Id. at 1. 	The Court was surprised and somewhat embarrassed to
see the error when Debtor’s counsel brought it to the Court’s
attention at the hearing conducted on May 2, 2011. 	The remainder
of the Order refers to Barak Lurie, Lurie & Park, or Barak
Lurie/Lurie & Park. 	The Court has no explanation for what is
clearly a typographical error, or why the extra “the” is in that
decretal sentence, or why the Court misstated the name of Lurie &
Park by substituting “and” for the ampersand. 	Were an appeal in
this matter not docketed (Notice of Appeal – doc 224), the Court
on its own would enter an order correcting this clerical mistake.
See F.R.Civ.P. 60(a), incorporated into F.R.B.P. 9024.
Nevertheless, the meaning of the order is clear, and any
correction of the clerical error would not be made for the
purpose of validating the order so much as “cleaning it up”.
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEW MEXICO
In re:
MARKET CENTER EAST RETAIL PROPERTY, INC.,
Debtor. 	No. 11-09-11696 SA
MEMORANDUM OPINION IN SUPPORT OF ORDER
(1) GRANTING REQUEST FOR EXPEDITED REVIEW AND FINAL ORDER
WITHOUT EVIDENTIARY HEARING (DOC 237), AND
(2) DENYING MOTION FOR STAY PENDING APPEAL (DOC 218)
OF ORDER APPROVING IN PART APPLICATION OF BARAK LURIE/
LURIE & PARK FOR COMPENSATION AS SPECIAL COUNSEL (DOC 217)
On March 30, 2011, this Court entered its Order Approving in
Part Application of Barak Lurie/Lurie & Park [“Applicant”] for
Compensation as Special Counsel (“Order”). 	Doc 217. 	The Order,
inter alia, awarded a sum of $350,752.06, and provided for the
disbursement to Applicant 1 of the amount of the award from the
Court Registry “upon proper request” from Applicant or its
attorneys. 	The following day, and prior to the filing of the
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2 The Stay Motion was filed at 1.31 pm MDT (doc 218), and
the hearing on the motion commenced at 4.04 pm MDT (doc 219).
The hearing came about so quickly because the Court would not be
available the following day (Friday, April 1) and Debtor’s
counsel would not be available thereafter for a period of about
ten days to two weeks. 	But the reality of the circumstances was
that the Court’s order permitting Applicant to immediately obtain
the funds from the registry of the court compelled Debtor to act
as quickly as it did.
Page 2 of 	11
appeal of the Order, Market Center East Retail Property, Inc.
[“Debtor”] filed the Debtor’s Motion to Stay Pending Appeal and
Emergency Hearing [sic] (“Stay Motion”). 	Doc 218. 	At Debtor’s
request, id. at 2, the Court conducted an emergency preliminary
hearing that afternoon on the Stay Motion, and after hearing
presentations of counsel, orally denied the Stay Motion with
leave to Debtor request an evidentiary hearing. 	Minutes (doc
219) 2; Order Resulting from Emergency Preliminary Hearing on
Debtor’s Motion for Stay Pending Appeal (doc 222). 	The order
denying the Stay Motion also gave Debtor ten days from the entry
of the order denying the Stay Motion to request an evidentiary
hearing, id. at 1, which Debtor timely did. 	Doc 226. 	The Court
then conducted a preliminary hearing on the request for an
evidentiary hearing on Monday, May 2, 2011, at which it gave
Debtor the choice of having the Court immediately “finalize” its
ruling denying a stay pending appeal, or of having an evidentiary
hearing that would stretch out over an indeterminate (but
presumably expedited) period of time while Debtor conducted its
proposed discovery of Applicant and otherwise prepared for a
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3 Prior to the hearing on May 2, Debtor had filed a
memorandum brief in support of its Stay Motion on Wednesday,
April 27 (doc 234), to which Applicant had responded on Friday,
April 29 (doc 235). 	Unfortunately, the Court was unaware of the
filing of the briefs, but in any event simply did not have the
time to read them before the preliminary hearing on Monday, May
2.
Page 3 of 	11
final evidentiary hearing. 3 	Debtor has now (May 3) filed its
Request for Expedited Review and Final Order Without Evidentiary
Hearing. 	Doc 237. 	For the reasons set forth below, the Court
grants the request for the expedited review (doc 237), but denies
the Stay Motion (doc 218).
Analysis
The standard for deciding whether to issue a stay on appeal
has somewhat recently been considered in Nken v. Holder, __ U.S.
__, 129 S.Ct. 1749 (2009).
As noted earlier, those legal principles have been
distilled into consideration of four factors: (1)
whether the stay applicant has made a strong showing
that he is likely to succeed on the merits; (2) whether
the applicant will be irreparably injured absent a
stay; (3) whether issuance of the stay will
substantially injure the other parties interested in
the proceeding; and (4) where the public interest lies.
Id. at 1761 (internal punctuation and citations omitted).
Further,
“A stay is not a matter of right, even if irreparable
injury might otherwise result.” Virginian R. Co. [v.
United States], 272 U.S. [658], at 672, 47 S.Ct. 222
[(1926)]. It is instead “an exercise of judicial
discretion,” and “[t]he propriety of its issue is
dependent upon the circumstances of the particular
case.” Id., at 672-673, 47 S.Ct. 222; see Hilton [v.
Braunskill, 481 U.S. 770,] 777, 107 S.Ct. 2113 (“[T]he
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4 At the emergency preliminary hearing, the Court relied
heavily on Tenth Circuit cases that discussed preliminary
injunctions, asserting that the standards for preliminary
injunctions are largely the same as the standards for staying a
judgment pending appeal.
There is substantial overlap between these [factors
governing stays on appeal] and the factors governing
preliminary injunctions, see Winter v. Natural
Resources Defense Council, Inc., 555 U.S. ----, ----,
129 S.Ct. 365, 376-77, 172 L.Ed.2d 249 (2008); not
because the two are one and the same, but because
similar concerns arise whenever a court order may allow
or disallow anticipated action before the legality of
that action has been conclusively determined.
Id. 	Nevertheless, the Court now makes its decision explicitly
based upon the factors listed in Ngen v. Holder.
5 Ngen v. Holder decided the question of whether the
“traditional standard” for a stay pending appeal applied to a
deportation order in the face of certain language from the
Illegal Immigration Reform and Immigrant Responsibility Act of
1996, 110 Stat. 3009-546. 	Id. at 1755. 	Thus much of the Supreme
Court’s discussion is flavored by the stark facts of an immediate
deportation (with, in the Ngen case, the assertion of the threat
of persecution upon return to Cameroon) versus how long an appeal
might take. 	“It takes time to decide a case on appeal.
Sometimes a little; sometimes a lot.” 	Id. at 1754.
Page 4 of 	11
traditional stay factors contemplate individualized
judgments in each case”). The party requesting a stay
bears the burden of showing that the circumstances
justify an exercise of that discretion. See, e.g.,
Clinton v. Jones, 520 U.S. 681, 708, 117 S.Ct. 1636,
137 L.Ed.2d 945 (1997); Landis v. North American Co.,
299 U.S. 248, 255, 57 S.Ct. 163, 81 L.Ed. 153 (1936).
Id. at 1760-61. 	Based on these standards, the Court denies the
Stay Motion. 4
The first two factors of the traditional standard are
the most critical. It is not enough that the chance of
success on the merits be “better than negligible.” 5
Id. 	(Citation omitted.) 	In this instance, the Court certainly
agrees that not many bankruptcy courts award compensation in the
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6 The memorandum opinion appears in Westlaw as In re Market
Center East Retail Property, Inc., 2011 WL 1204754 (Bankr.
D.N.M.). 	The Court notes, however, that a short portion of the
opinion, at the very end of the segment titled “Lodestar”, at the
top of page 37 in doc 216, has been inadvertently omitted from
the published opinion at *10. 	The omitted text reads, following
the word “say”:
... administering an estate by getting a plan
confirmed, or sales approved, or operating reports
filed, are not activities that are easily valued in
specific dollar amounts. But there is no lack of a
concrete measure in the circumstances presented by this
request for compensation, and so the lodestar is less
needed or useful.
Page 5 of 	11
form of a partial contingency rather than based on a straight
lodestar calculation. 	But for the reasons set forth in the
Memorandum Opinion Approving in Part Application of Barak
Lurie/Lurie & Park for Compensation as Special Counsel (doc
216) 6, the Court is quite comfortable that its decision is
correct in the fact-finding, the applicable law, the reasoning
and the conclusion.
Particularly is this the case when it appears that at the
heart of Debtor’s argument on March 31 and again now is an
erroneous premise: that the Court’s award of compensation to
Applicant was based on – was essentially an adoption and
enforcement of – the February 2009 Retainer Agreement and
specifically its compensation arrangement. 	As the Court has
tried to make clear, the Court understood (and still does) that
the Retainer Agreement no longer controlled the compensation
decision once the Court entered the Stipulated Order Regarding
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Page 6 of 	11
Professional Services Rendered by Barak Lurie as Attorney for
Debtor-in-Possession (doc 128). 	Rather, the Court, in
determining what compensation would be reasonable for Applicant
for the work done and results achieved, looked to the parties’
negotiations and statements in early 2009 to see how they viewed
the litigation and the attendant risks and rewards, in order to
determine reasonableness of compensation. 	And it was in that
context that the Court settled on the partial contingency
arrangement that the parties themselves had discussed and agreed
was reasonable.
In this instance, as the Court has already found, the
parties had reached an arm's length agreement on the
compensation to be paid—the hybrid of an hourly rate of
$200/hour and the 15% contingency fee on the total
recovery—when they signed the Retainer Agreement. And
they still had that understanding when the employment
application was filed June 10, 2010 [sic – should be
2009]. Debtor's subsequent attempts to evade the
consequences of its agreement do not change the
stubborn fact that Debtor and Applicant reached an
agreement and in the process acknowledged the
reasonableness of the compensation arrangements. The
Court treats that acknowledgment as effectively an
admission of reasonableness that continues to bind the
Debtor.
In re Market Center East Retail Property, Inc., 2011 WL 1204754
(Bankr. D.N.M.) at *10 (footnote omitted and emphasis added).
Thus, Debtor’s misstatement during the March 31 emergency
preliminary hearing of what the Court did in making its decision
detracted from its argument that it is likely to be successful on
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7 In its memorandum brief arguing the merits of the stay,
Debtor does not pursue that argument, doc 234 at 3-8, but instead
concludes that section of the brief by arguing:
It is certainly not impossible that the appellate
courts will view the issue differently or will decide
to modify what up until now has been settled law.
Despite these possibilities and the persuasive opinion
written by this Court advocating for a new approach,
Debtor has shown that he is likely to prevail on appeal
under the current law.
Id. at 8.
Page 7 of 	11
appeal. 7 	Not that Debtor does not have the right to argue that
issue on appeal (and will undoubtedly do so – see Statement of
Issues on Appeal, at ¶3 (doc 231)), but from the Court’s
perspective, emphasizing that issue makes success on the merits
of the appeal less likely.
At best, Debtor might “meet the requirement for showing
success on the merits by showing that questions going to the
merits are so serious, substantial, difficult, and doubtful as to
make the issue ripe for litigation and deserving of more
deliberate investigation.” 	Oklahoma, ex rel., the Oklahoma Tax
Commission v. International Registration Plan, Inc., 455 F.3d
1107, 1113 (10 th Cir. 2006) (quotation marks, footnote and
citation omitted). 	But in fact, this Court does not think that
the issues decided in the award of compensation are anywhere near
that serious or doubtful, so that the first factor of the test
resolves itself against granting a stay.
Nor has Debtor demonstrated sufficiently that it will suffer
irreparable harm.
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8 The Court has looked at and read not only the exhibits
attached to the Debtor’s memorandum brief (doc 234), but also the
exhibits that were tendered to the Court in an e-mail dated May
3, 2011 that was sent to the Court and opposing counsel. 	Doc
238. 	The attachments to the e-mail duplicate various items
already filed with the Court.
Page 8 of 	11
By the same token, simply showing some “possibility of
irreparable injury,” Abbassi v. INS, 143 F.3d 513, 514
(C.A.9 1998), fails to satisfy the second factor. As
the Court pointed out earlier this Term, the “
‘possibility’ standard is too lenient.” Winter, supra,
at ----, 129 S.Ct. at 375.
Id. at 1761. 	In this instance, even accepting at face value the
exhibits tendered by Debtor and considering the significance
ascribed to those exhibits by Debtor, the Court does not find
that there is more than a possibility that Debtor will not be
able to recover the funds from Applicant were Debtor to win its
appeal. 8 	For example, it would be pure speculation to guess
whether Mr. Lurie’s political campaign platform of lower taxes,
limited government and reduced spending will appeal to enough
voters in southern California such that his campaign for the
United States Congress will consume all or most of the funds at
issue here. 	Similarly, the fact that Messrs Lurie and Park have
a sort of “duplex” arrangement – two different law firms of
differing sizes sharing a common name and web page – does not
suggest that Mr. Lurie is any less able to repay the funds in the
event that this Court’s decision is reversed on appeal. 	Nor is
the prospect of having to engage in collection activities against
Mr. Lurie a basis for staying the delivery of the funds; at some
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9 The parties agree that the public interest is not at issue
in this decision.
10 Nor, in response to Applicant’s argument, is the long
wait necessarily a reason not to stay the payment to Applicant.
Applicant’s memorandum brief at 4-5. 	Doc 235. 	And, for that
matter, the Court has not factored in, one way or the other, the
somewhat protracted litigation history of this matter or the
finding of bad faith on the part of Debtor. 	Id. at 1-2, 4-5.
Page 9 of 	11
point, losing on the merits after a full blown trial does have
some adverse consequences.
Finally 9, depriving Applicant of the immediate benefit of
the award of fees is a harm to Applicant that also needs to be
taken into account. 	The mere fact that Applicant has waited as
long as it has to receive compensation is no reason to extend
that wait. 10 	And as the Court pointed out at the emergency
preliminary hearing, having cash available sometime in the
future, even with accrued interest, is not nearly the same thing
as having it available immediately. 	See In re Murel Holding
Corp., 75 F.2d 941, 942 (2 nd Cir. 1935).
Procedural Comment
A final comment is worth making. 	The Court recognizes the
very real and difficult constraints that Debtor was under in
attempting to obtain a stay. 	This compensation adjudication is a
contested matter pursuant to F.R.B.P. 9014, which incorporates
many of the rules for adversary proceedings set out in F.R.B.P.
7001 et seq., but not Rule 7062. 	Rule 7062 incorporates
F.R.Civ.P. 62(a), which provides for an automatic stay of 14 days
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Page 10 of 	11
on execution following the entry of a judgment. 	Since the
Court’s order provided that a check issue from the court registry
as soon as Applicant asked for it, and since Applicant’s counsel
immediately asked for the check, Debtor was left to scramble for
the stay on little more than a moment’s notice. 	(This issue came
up at the emergency preliminary hearing.) 	In consequence, Debtor
was already somewhat behind the power curve when it sought to
initiate discovery and provide evidence to the Court in support
of its arguments for a stay. 	Nevertheless, while Debtor has not
had the benefit of an evidentiary hearing in which to attempt to
demonstrate Applicant’s unfitness to receive its compensation
during the pendency of the appeal, the Court believes that it has
accorded enough regard for Debtor’s arguments and proposed
evidence that Debtor has received a sufficient hearing on the
issue of the stay pending appeal.
Conclusion
For the foregoing reasons, the Court finds that it should
rule immediately on Debtor’s request for a stay (doc 237), and
that it should not stay the award of compensation to Barak
Lurie/Lurie & Park pending the outcome of an appeal (doc 218).
An order will enter.
Honorable James S. Starzynski
United States Bankruptcy Judge
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11

Page 11 of 	11
Date Entered on Docket: 	May 4, 2011
Copies to:
Daniel J Behles
Moore, Berkson & Gandarilla, P.C.
Attorney for Debtor
P.O. Box 7459
Albuquerque, NM 87194
Ronald Andazola
Assistant US Trustee
PO Box 608
Albuquerque, NM 87103-0608
Deron B Knoner
Attorney for Lurie
PO Box AA
Albuquerque, NM 87103
James Rasmussen
Attorney for Lurie
PO Box AA
Albuquerque, NM 87103-1626
Jane Yohalem
Attorney for Debtor
PO Box 2827
Santa Fe, NM 87504
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