Musso, Trustee of the Estate of Vladimir Ostashko v. Ostashko et al

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NEW YORK
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In re:
Chapter: 7
VLADIMIR OSTASHKO,
Case No.: 03-26845-ess
Debtor.
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ROBERT J. MUSSO, Trustee of the
Estate of Vladimir Ostashko,
Plaintiff,
-against- 	Adv. Pro. No. 04-1256-ess
VLADIMIR OSTASHKO, TANYA
OSTASHKO, ZURITTA-TEKS, LTD.
and HARNIK & FINKELSTEIN,
Defendants.
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MEMORANDUM DECISION DENYING TANYA OSTASHKO’S
REQUEST FOR A STAY PENDING APPEAL
Before the Court is the application of Tanya Ostashko, a defendant in the above-
captioned adversary proceeding, (the “Adversary Proceeding”), for a stay of the auction of the
real property located at 246 Howard Avenue, Staten Island, New York 10301 (the “Marital
Home”) presently scheduled for September 27, 2005, pending appeal (the “Stay Application”) of
this Court’s Memorandum Decision Denying in Part Tanya Ostashko’s Motion for Summary
Judgment dated June 1, 2005 (the “Decision”). This matter was brought on by order to show
cause which was considered by the Court at a hearing on September 13, 2005, and at a continued
hearing, on September 21, 2005, at which Tanya Ostashko, by counsel, and the Chapter 7
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Trustee (the “Trustee”), by counsel, appeared and were heard, and David Maltz, the auctioneer
retained by the Trustee, testified. For the reasons reflected in the record and summarized below,
the Stay Application is denied.
Background
The procedural history of this Adversary Proceeding and related litigation in the
bankruptcy court is reviewed in the Decision. See Decision at pp. 2-5. This history includes the
filing of an involuntary bankruptcy petition against the debtor, Vladimir Ostashko (the
“Debtor”), a motion for relief from the automatic stay, the commencement of this Adversary
Proceeding, and the summary judgment motion of Tanya Ostashko leading to the Decision and
this Stay Application.
The procedural history of the matrimonial and other litigation between Tanya Ostashko,
the Debtor, and other parties, is also reviewed in the Decision. See Decision at pp. 5-11. This
history includes matrimonial and other litigation in New York Supreme Court (the “Matrimonial
Action”), the U.S. District Court for the Eastern District of New York, and now, the bankruptcy
court.
Tanya Ostashko sought summary judgment on two alternative grounds. First, she sought
an order declaring that certain marital assets including the Marital Home, the proceeds of the sale
of a vacation home and undeveloped lot in Florida, and an apartment in Moscow, Russia (the
“Marital Assets”), are not property of the Debtor’s bankruptcy estate by operation of a decision
issued by New York Supreme Court in the Matrimonial Action, which was rendered but not
reduced to a judgment before the date that the Debtor’s bankruptcy case was commenced (the
“Petition Date”). This portion of the Motion was denied. Alternatively, Tanya Ostashko sought
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an order declaring that she is the owner of the Marital Assets pursuant to a constructive trust, and
related relief. This portion of the Motion was withdrawn by Tanya Ostashko and this claim
remains to be determined in this Adversary Proceeding. See Adversary Docket, entry dated June
6, 2005. In hearings before this Court, Tanya Ostashko has acknowledged that she is seeking a
constructive trust of the proceeds of the sale of the Marital Assets, as contrasted with the actual,
tangible assets themselves.
Tanya Ostashko filed a notice of appeal and request for leave to appeal from the Decision
with the U.S. District Court for the Eastern District of New York on or about June 27, 2005.
That request was heard by Hon. Charles P. Sifton on September 12, 2005, and counsel for Tanya
Ostashko and the Trustee appeared and were heard. Judge Sifton granted the request for leave to
appeal, and pursuant to Federal Rule of Bankruptcy Procedure 8005, the parties returned to this
Court to seek a stay pending appeal. On September 13, 2005, the Trustee filed a Memorandum
of Law of Chapter 7 Trustee in Opposition to Stay of Sale of Property (the “Trustee’s Mem.”),
and on September 20, 2005, Zuritta-Teks, Ltd. (“Zuritta-Teks”) filed an Affidavit in Opposition
to Motion to Stay Sale of Property of Stephen M. Harnik, sworn to on September 19, 2005 (the
“Harnik Aff.”).
Discussion
Federal Rule of Bankruptcy Procedure 8005 governs the procedure for motions for a stay
pending appeal of a bankruptcy court order. The rule provides:
A motion for a stay of the judgment, order or decree of a bankruptcy judge . . . or
for other relief pending appeal must ordinarily be presented to the bankruptcy
judge in the first instance. . . . [T]he 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. . . . A motion for such relief . . . may be made
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to the district court or the bankruptcy appellate panel, but the motion shall show
why the relief . . . was not obtained from the bankruptcy judge. The district court
. . . may condition the relief it grants under this rule on the filing of a bond or
other appropriate security with the bankruptcy court.
FED . R. BANKR . P. 8005.
Here, Tanya Ostashko’s request for a stay is directed to the Trustee’s efforts to proceed
with the administration of the Debtor’s Chapter 7 bankruptcy estate, and in particular, with the
Trustee’s plan to conduct an auction of the Marital Home. That auction is presently planned to
take place on September 27, 2005, and will be subject to higher and better offers, and to the
approval of the bankruptcy court. See Bankruptcy Case Docket, No. 57, Notice to Creditors and
Other Parties in Interest of Trustee’s Intended Sale. See also 11 U.S.C. §§ 363(b) and 363(f);
FED . R. BANKR . P. 6004.
In order to succeed on a motion for a stay pending appeal, the movant must address four
factors: (1) whether the movant will suffer irreparable injury if the stay is denied; (2) whether
there is a likelihood that the party seeking the stay will succeed on the merits of the appeal, or a
serious question going to the merits and a tipping of the equities in favor of the movant; (3)
whether substantial harm will be suffered by other parties if the stay is granted; and (4) whether
there would be harm to the public interest. FFG-NJ Vehicle Funding Corp. v. Holtmeyer (In re
Holtmeyer), 229 B.R. 579, 582 (E.D.N.Y. 1999) (citing In re Slater, 200 B.R. 491, 495
(E.D.N.Y. 1996)). See In re Baker, 2005 WL 2105802, at *3 (E.D.N.Y. Aug. 31, 2005). See
also Hirschfeld v. Bd. of Elections in the City of New York, 984 F.2d 35, 39 (2d Cir. 1993)
(stating that in the Second Circuit, these four criteria “are considered before staying the actions
of a lower court”); Goldstein v. Albert (In re Albert), 2002 Bankr. LEXIS 631, *7 (Bankr.
S.D.N.Y. 2002) (“[f]ailure to satisfy one prong of this standard . . . will result in denial of the
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motion.”). Likelihood of Success on the Merits
Although all four criteria must be satisfied in order for a stay pending appeal to be issued,
the criterion of a likelihood of success on the merits, or a serious question going to the merits
and a tipping of the equities in favor of the movant, is the most weighty of the factors. In re
Baker, 2005 WL 2105802, at *4 (“The single most important factor is likelihood of success on
the merits.”). See also In re Holtmeyer, 229 B.R. at 582. Therefore, the Court will consider that
criterion first. If it is not satisfied, then the stay should not issue.
In determining whether there is a likelihood that the party seeking the stay will succeed
on the merits of the appeal, or a serious question going to the merits and a tipping of the equities
in favor of the movant, courts consider whether there is a “‘substantial possibility’ of success on
the merits – i.e., the same standard utilized on a motion to stay a district court’s order pending
appeal to the Court of Appeals.” In re General Credit Corp., 283 B.R. 658, 660 (S.D.N.Y.
2002); In re Baker, 2005 WL 2105802, at *4 (“The party seeking a stay pending appeal is
required to show that ‘its arguments raise a substantial possibility, although less than a
likelihood, of success’ on the merits.”) (quoting Hayes v. City Univ. of New York, 503 F. Supp.
946, 963 (S.D.N.Y. 1980), aff’d, 648 F.2d 110 (2d Cir. 1981)).
The Court concludes that Tanya Ostashko has not shown a substantial possibility of
success on the merits. As discussed in the Decision, the question to be addressed is essentially a
question of bankruptcy law – that is, what assets became property of the Debtor’s bankruptcy
estate. See Decision, pp. 12-14. As with many matters concerning property of the estate, the
relevant guidance is contained not only in the Bankruptcy Code and decisions of federal courts,
but also in New York state law, including New York’s Domestic Relations Law, and cases
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construing Section 236 of that law. See Decision, pp. 12-14. As a result, the operative
determination is whether Tanya Ostashko’s equitable distribution rights in the Marital Assets, as
determined in the Matrimonial Action, vested before the date that the Debtor’s bankruptcy
petition was filed (the “Petition Date”). Here, that question was answered in favor of the
Chapter 7 Trustee.
As set forth in the Decision, the question of law presented here is not a close one. The
overwhelming majority of state and federal courts to consider the issue of when, and under what
circumstances, rights to marital property vest under New York’s Domestic Relations Law have
found that such rights vest only upon entry of a final judgment, and not before. See Decision,
pp. 16-19. See, e.g., Ara v. Anjum (In re Anjum), 288 B.R. 72, 76-77 (Bankr. S.D.N.Y. 2003)
(citing numerous authorities) (“The courts have uniformly held that when a final judgment of
divorce has not been entered at the time of a bankruptcy filing, thte non-debtor spouse’s rights
may be no greater than that of a general unsecured creditor.”); In re Cole, 202 B.R. 356, 360
(Bankr. S.D.N.Y. 1996) (citing numerous authorities) (“The spouses’ respective rights in marital
property do not vest under New York law, . . . until entry of a judgment dissolving the
marriage.”); In re Palmer, 78 B.R. 402, 406 (Bankr. E.D.N.Y. 1987) (“Since no equitable
distribution award had vested at the time of the filing of the petition, the debtor’s property came
into the estate free of the claims of the spouse.”); In re Greenwald, 134 B.R. 729, 731 (Bankr.
S.D.N.Y. 1991) (citing numerous authorities) (the entry of a judgment of divorce caused the
property at issue to vest in the non-debtor spouse before the debtor spouse filed for bankruptcy,
so that the property was not property of the bankruptcy estate); Sinha v. Sinha, 285 A.D.2d 801,
802, 727 N.Y.S.2d 537, 539 (2d Dep’t 2001) (“Bankruptcy courts have generally agreed with
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Justice O’Connor’s analysis and have concluded that ‘spouses’ respective rights in marital
property do not vest under New York law * * * until entry of a judgment dissolving the
marriage’”) (quoting In re Cole, 202 B.R. at 360).
Here, as described in the Decision, a judgment was not entered in the Matrimonial Action
until after the Debtor’s bankruptcy case was commenced, his bankruptcy estate was created, and
property of his bankruptcy estate was defined by law. See Decision, p. 2. As numerous other
courts in this Circuit and elsewhere have concluded, it is the juridical act of entry of judgment,
and not the issuing of a decision which awaits the entry of judgment, that renders final a
distribution of marital property. See Decision, pp. 16-19. For these reasons alone, it is apparent
that Tanya Ostashko does not have a likelihood of success on the merits of her appeal of the
Decision.
But there are other reasons related to the operation of the Bankruptcy Code that confirm
that Tanya Ostashko does not have a likelihood of success on the merits. In the absence of the
Debtor’s bankruptcy case, if a judgment lien creditor had perfected a lien on the Marital Assets
before a judgment was entered in the Matrimonial Action, then that judgment lien creditor would
have taken free and clear of Tanya Ostashko’s interest in the Marital Assets. Under Section 544
of the Bankruptcy Code, the Trustee stands in the shoes of such a creditor. See 11 U.S.C. § 544.
This rule protects the rights and expectations of creditors and preserves the integrity and
enforceability of court judgments.
More generally, this result is consistent with the bankruptcy process because it assures
that the debtor’s non-exempt property is marshaled in his or her bankruptcy estate, and is
available for distribution to creditors according to the priorities established by the Bankruptcy
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Code. It ultimately protects the rights of all creditors, including Tanya Ostashko, and assures the
orderly disposition of a Chapter 7 debtor’s assets. Section 541 of the Bankruptcy Code provides
that property of the estate includes “all legal or equitable interests of the debtor in property as of
the commencement of the case.” 11 U.S.C. § 541. This property is afforded immediate
protection from the piecemeal claims of creditors by the automatic stay. 11 U.S.C. § 362. See 3
COLLIER ON BANKRUPTCY ¶ 362.03 (15th ed. rev. 2005). As a leading commentator has
observed:
It is this central aggregation of property that promotes the effectuation of the
fundamental purposes of the Bankruptcy Code: the breathing room given to a
debtor that attempts to make a fresh start, and the equality of distribution of assets
among similarly situated creditors, according to the priorities set forth within the
Code.
5 COLLIER ON BANKRUPTCY ¶ 541.01 (15th ed. rev. 2005) (emphasis added). Property of the
estate is no longer within a debtor’s control, but is subject to administration by the Chapter 7
trustee and the jurisdiction of the court. Creditors, including litigants with claims against the
debtor that have been fixed in non-bankruptcy proceedings, are entitled to be paid according to
their priority. And creditors with superior legal or equitable rights to payment are entitled to be
paid in advance of other creditors. See, e.g., 11 U.S.C. §§ 507(a)(7) (priority accorded to
allowed claims for debts to a former spouse for alimony to, maintenance for, or support of, a
spouse), 510(c) (allowed claims may be equitably subordinated to other allowed claims).
Even if the record showed a serious question going to the merits, there is a further
obstacle to Tanya Ostashko satisfying this prong of the test for a stay pending appeal, because in
the framework of this specific and limited issue, the equities do not tip in her favor. In
particular, Tanya Ostashko argues that the Debtor’s misconduct should lead the Court to award
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her judgment. Summary Judgment Motion ¶ 24. Tanya Ostashko argues that based on the
factual findings made after trial and described by the U.S. District Court in Ostashko v.
Ostashko, 2002 WL 32068357, at *2-*15 (E.D.N.Y. Dec. 12, 2002), aff’d, 2003 WL 22477929
(2d Cir. Nov. 3, 2003), the Debtor is not entitled to the protections of a court of equity. But as
many courts have held, while the behavior of the Debtor or other creditors may be relevant to the
legal or equitable priority to be accorded to Tanya Ostashko’s claim, the Debtor’s “behavior and
alleged motives” are irrelevant to the determination of what comes within the scope of property
of the estate. Lawrence v. Lawrence (In re Lawrence), 237 B.R. 61, 79, 80 (Bankr. D.N.J. 1999)
(despite evidence of “an overwhelming pattern of diversion of assets by the debtor with the
intention of diminishing [her] share of those assets,” and the debtor’s “total contempt for the
rights of [the non-debtor spouse] in the marital estate,” “where . . . a bankruptcy petition of a
spouse holding legal title to marital property precedes a divorce judgment distributing such
property, the rights of the other spouse not sharing legal title are inferior to those of the title
holder’s trustee.”).
Finally, if the question determined in the Decision was whether the Debtor should receive
a benefit at the expense of Tanya Ostashko, or the extent of her eventual recovery as a creditor in
the Debtor’s bankruptcy case, then the balance of the equities might tip in favor of Tanya
Ostashko. But here, the scales are not balanced between the interests of Tanya Ostashko and the
Debtor, Vladimir Ostashko. Rather, the competing interests are those of Tanya Ostashko and the
Trustee on behalf of all creditors, including Tanya Ostashko. See Decision, pp. 25-26.
In sum, the Court finds that Tanya Ostashko does not have a likelihood of success on the
merits of her appeal. For that reason alone, as noted above, the Stay Application should be
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denied. See p. 4, supra. For the sake of completeness, the Court will also consider the
remaining three elements of the test for a stay pending appeal.
Irreparable Injury to the Movant
Tanya Ostashko claims that she will suffer irreparable injury if the Court denies a stay
pending appeal. She argues that if the Marital Home is sold at auction, she will “have lost her
right to own her home or sell her home of the last 10 years as and when she pleases, and on the
terms she pleases.” Stay Application, ¶ 13. In addition, Tanya Ostashko claims she will be
irreparably injured by the “manner of the Trustee’s sale” in that “the same high price [attainable]
by a broker will not be achieved at the auction (forced sale).” Stay Application, ¶ 14. She also
states that she will suffer “indignity . . . from being forced from her home by [the] trustee’s
auction.” Stay Application, ¶ 15.
To show irreparable injury, “[a] moving party must show that the injury it will suffer is
likely and imminent, not remote or speculative, and that such injury is not capable of being fully
remedied by money damages.” NAACP v. Town of East Haven, 80 F.3d 219, 224 (2d Cir. 1995).
See also In re Holtmeyer, 229 B.R. at 583.
In some situations, the deprivation of an interest in real property may give rise to a claim
of irreparable injury. See In re Issa Corp., 142 B.R. 75, 78 (Bankr. S.D.N.Y. 1992) (“debtor will
suffer irreparable injury if the stay is denied, since if it is evicted it will lose its restaurant.”).
But here, it does not appear that Tanya Ostashko bases her claim of irreparable injury on such
grounds. Rather, Tanya Ostashko argues that she will be irreparably injured because she may
not be in control of the sale. Stay Application, ¶ 13.
The Trustee contends, and Tanya Ostashko does not contest, that if she is successful in
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her appeal, she will sell the Marital Home. See Trustee’s Mem. at 3-4. The record shows that
this has been Tanya Ostashko’s objective for many years. Zuritta-Teks contends that in prior
related litigation, Tanya Ostashko “never objected to a sale of the [Marital Home], just to the
division of the proceeds.” Harnik Aff. ¶ 1(b), Exhs. A (letters dated October 1, and 20, 1998,
from the Debtor’s counsel to Tanya Ostashko’s former counsel) and B (transcript dated April 8,
1999, of hearing held in New York State Supreme Court, Richmond County).
The record before this Court supports the Trustee’s and Zuritta-Teks’s assertion that
Tanya Ostashko does not intend to remain in the Marital Home or to maintain the property, and
indeed, this was acknowledged by Tanya Ostashko’s counsel on the record of the September 21,
2005, hearing. Tanya Ostashko has not paid the costs of maintaining the Marital Home, such as
insurance, which has been paid for by the Trustee. Trustee’s Mem. at 4. Nor has she paid New
York City real estate taxes, and the real estate tax arrears are accruing interest at eighteen
percent, compounded daily. Id. As described in the testimony of Mr. Maltz, the Marital Home
shows the effects of many years of substantial neglect. See pp. 13-14, infra.
The record also does not show that Tanya Ostashko will suffer irreparable injury as a
result of the Trustee holding an auction of the Marital Home. As noted by the Trustee:
While it is true that the Trustee intends to sell the [Marital Home], the proceeds
from that sale cannot be distributed until the Trustee files a final report and the
Bankruptcy Court approves the final report. The Trustee cannot file the final
report until all litigation is finished, including appeals. If [Tanya Ostashko]
prevails on the second counterclaim, or on appeal after conclusion of this
adversary proceeding, all of the proceeds will go to her.
Trustee’s Mem. at 4. A sale cannot be consummated without court approval, and any proposed
sale would be subject to higher and better offers. 11 U.S.C. § 363(b); FED . R. BANKR . P. 6004.
And the sale proceeds cannot be distributed until all litigation concerning the distribution of
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proceeds is complete, including litigation relating to the priority to be accorded to Tanya
Ostashko’s claim. 11 U.S.C. § 704; FED . R. BANKR . P. 2015, 5009. If the proposed sale price is
demonstrably inadequate, then the sale is not likely to be approved. And as the testimony of Mr.
Maltz suggests, auction sales in bankruptcy cases often yield prices at or above market prices.
See p. 13, infra.
Finally, Tanya Ostashko’s objection to the manner of the Trustee’s proposed sale does
not show irreparable injury. The Trustee, having sold numerous properties, determined that an
auction sale would be the best way of obtaining the highest price for the Marital Home. This
decision is within the scope of the Trustee’s business judgment. See, e.g., Frostbaum v. Ochs,
277 B.R. 470, 475 (E.D.N.Y. 2002). The Trustee is under a statutory duty to “collect and reduce
to money the property of the estate . . .” 11 U.S.C. § 704(1). And the Trustee “is allowed to use
his best judgment in deciding when ‘to use valuable property of the estate and [when] to
renounce title to and abandon burdensome property.’” Frostbaum, 277 B.R. at 475 (quoting
Orion Pictures Corp. v. Showtime Networks, Inc., 4 F.3d 1095, 1098 (2d Cir. 1993)).
In sum, the Court finds that Tanya Ostashko has not shown that she will suffer
irreparable injury if a stay pending appeal is not issued.
Substantial Harm to the Non-Moving Party
Tanya Ostashko also contends that any harm to the Trustee to be occasioned by a stay
pending appeal is de minimis in light of the strong residential real estate market in Staten Island.
Stay Application, ¶ 16. The Trustee agrees that Staten Island currently enjoys a strong
residential real estate market, but argues that the real estate “bubble” could burst at any time, and
that the value of the Marital Home could decline, to the detriment of all creditors. Trustee’s
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Mem. at 8. And, as noted above, real estate taxes on the Marital Home are not being paid and
arrears accrue interest at eighteen percent. The Trustee is also expending estate funds for
insurance on the Marital Home. All of these costs and expenses will ultimately reduce the
amount of funds available to all creditors in the Debtor’s bankruptcy case.
At the continued hearing on September 21, 2005, the Trustee’s auctioneer, David Maltz,
testified as to lack of irreparable injury to Tanya Ostashko in the absence of a stay and the
substantial harm to be suffered by the Trustee in the event that a stay is issued. Mr. Maltz, who
has more than twenty-eight years of experience in the auction of real property, including in
connection with bankruptcy proceedings in the Eastern and Southern Districts of New York,
testified that real property auctions often lead to prices at or above market prices, because buyers
perceive that they are “getting a bargain” due to the pendency of the bankruptcy case. He further
testified that residential real property inventory has increased some twenty to thirty percent in
the last year, that interest rates are increasing, that energy prices are increasing, and that for all of
these reasons, that the residential real estate market is “flattening.”
Mr. Maltz testified that he has conducted inspections of the exterior and interior of the
Marital Home, and that it shows the results of an extended period of substantial neglect,
including problems with the heating system, water damage, and mold in the basement. Mr.
Maltz estimated that the Marital Home would require $250,000 to $300,000 in repairs to bring it
in line with standards in the neighborhood, both “structurally” and “decoratively.” Mr. Maltz
also stated that two months ago, there were three to five houses showing “for sale” signs in the
neighborhood, but now, there were a dozen houses for sale in the general vicinity of the Marital
Home. He also testified that there were two vacant homes in immediate proximity to the Marital
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Home, one located adjacent to it and another located across the street.
On cross-examination, Mr. Maltz acknowledged that on at least one occasion in his
experience in connection with the sale of a property located in Florida, a property sold at auction
was later purchased for a higher price. He also stated that while the Marital Home required
substantial repairs, it would not be cost-effective to make repairs to get a higher price. Mr.
Maltz acknowledged that some cosmetic repairs could “possibly” be cost-effective in the short
run, but added that would not address, but would only cover up, the substantial problems with
the property.
Separately, it is undeniable that a stay pending appeal will occasion significant delay in
these proceedings, and in the administration of the Debtor’s bankruptcy estate by the Trustee.
This bankruptcy case was commenced by the filing of an involuntary bankruptcy petition in
December 2003. As in Baker, “distributions to creditors have . . . already been delayed, and a
stay . . . will, in all likelihood, further delay distributions owed creditors . . .” In re Baker, 2005
WL 2105802, at *9.
As a result, the Court finds that Tanya Ostashko has not shown that there will not be
harm to non-moving parties if a stay pending appeal is issued.
Harm to the Public Interest
Finally, Tanya Ostashko argues that a stay pending appeal is in the public interest. She
contends that the issue on appeal “is of great public significance” and that “a controlling
appellate decision is needed and is in the public interest.” Stay Application, ¶ 18. Tanya
Ostashko does not, however, address specifically how the public interest would be harmed by
denial of a stay of the auction of the Marital Home, or why the legal issues presented on this
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appeal would not remain in dispute.
The Trustee claims that a stay of the auction of the Marital Home will harm the public
interest because the nonpayment of real estate taxes on the Marital Home “harms the public
treasury.” Trustee’s Mem. at 8. The Trustee also contends that a stay of the auction of the
Marital Home will “prevent or seriously delay [him] from performing his statutory duties.” Id.
As noted above, the Trustee is under a statutory duty to “collect and reduce to money the
property of the estate . . .” and to “close such estate as expeditiously as is compatible with the
best interests of parties in interest.” 11 U.S.C. § 704(1). See In re Savage & Assocs., 2005 WL
488643, at *2 (S.D.N.Y. Feb. 28, 2005) (“the public interest favors the expedient administration
of the bankruptcy proceedings . . .”). And the resolution of this dispute, as well as the disputes
between and among the Debtor, Tanya Ostashko, and other creditors, which have already been
pending for years, would only be further delayed. Where, as here, it is not likely that Tanya
Ostashko will succeed on the merits of her appeal, the public interest is better served by allowing
the administration of the case to proceed. See In re Baker, 2005 WL 2105802, at *10 (“Having
determined that the Debtor is unlikely to succeed on appeal, I find that the public interest is
better served by allowing distributions . . . to proceed in an expeditious manner.”) As a result,
the Court finds that Tanya Ostashko has not shown that the public interest will be harmed if a
stay pending appeal is not issued.
Conclusion
On this application for a stay pending appeal of this Court’s Memorandum Decision
Denying in Part Tanya Ostashko’s Motion for Summary Judgment, Tanya Ostashko has not
shown that she has a likelihood of success on the merits of the appeal, or that there is a serious
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question going to the merits and a tipping of the equities in her favor. Nor has she shown that
she will suffer irreparable injury if a stay pending appeal is not issued, or that there will not be
harm to non-moving parties if a stay pending appeal is issued. Finally, Tanya Ostashko has not
shown that the public interest will be harmed if a stay pending appeal is not issued. For these
reasons, the Stay Application is denied. An Order in accordance with this Memorandum
Decision shall be entered simultaneously herewith.
Dated: Brooklyn, New York
September 21, 2005
S/Elizabeth S. Stong_________________
ELIZABETH S. STONG
UNITED STATES BANKRUPTCY JUDGE
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