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BDC Capital, Inc. v. Thoburn Ltd. P'ship

United States District Court, E.D. Virginia

April 14, 2014

BDC CAPITAL, INC., Appellant,
v.
THOBURN LIMITED PARTNERSHIP, et al., Appellees

April 14, 2014, Filed

For Thoburn Limited Partnership, John M. Thoburn, Debtors: Christopher Abram Jones, LEAD ATTORNEY, Whiteford Taylor & Preston LLP, Falls Church, VA.

For BDC Capital, Inc., Appellant: Madeline Agnes Trainor, Wayne F. Cyron, LEAD ATTORNEYS, Cyron & Miller LLP, Alexandria, VA.

For Thoburn Limited Partnership, Hunter Mill West, LC, Hunter Mill East, LLC, John M. Thoburn, Appellees: Christopher Abram Jones, Justin Philip Fasano, LEAD ATTORNEYS, Whiteford Taylor & Preston LLP, Falls Church, VA.

For TD Bank, Appellee: Justin Fielder Paget, LEAD ATTORNEY, Hunton & Williams LLP (Richmond), Richmond, VA.

For First Virginia Community Bank, Appellee: Michael J. Holleran, LEAD ATTORNEY, Walton & Adams PC, Reston, VA.

For HM Investments, LLC, Appellee: Lawrence Allen Katz, LEAD ATTORNEY, Leach Travell Britt PC, McLean, VA.

OPINION

Page 634

MEMORANDUM OPINION AND ORDER

Gerald Bruce Lee, United States District Judge.

THIS MATTER is before the Court on Appellant BDC Capital Inc.'s Motion for Stay Pending Appeal. BDC Capital (" BDC" ) appeals an Order of the Bankruptcy Court for the Eastern District of Virginia (" Bankruptcy Court" ) confirming the Fifth Amended Reorganization Plan in the Chapter 11 case of the Thoburn Limited Partnership and John M. Thoburn.

The issue before the Court is whether the Court should grant BDC's Motion for Stay Pending Appeal of the Order of Confirmation of the Fifth Amended Reorganization Plan in the Chapter 11 case of Thoburn Limited Partnership and John M. Thoburn. The Court DENIES BDC's Motion for Stay Pending Appeal because BDC has failed to satisfy the four factors that the Court must consider when deciding whether to grant a stay. Specifically, BDC failed to demonstrate that: (1) BDC

Page 635

would likely succeed on the merits on appeal; (2) BDC would suffer irreparable harm if a stay was denied; (3) the balance of equities tips in BDC's favor; and (4) a slay will serve the public's interest.

I. BACKGROUND

This case arises from the Chapter 11 bankruptcy case of the Thoburn Limited Partnership and John M. Thoburn. The Thoburn Limited Partnership (" TLP" ), Hunter Mill East, L.L.C. (" HME" ) and Hunter Mill West, L.C., (" HMW" ) (hereinafter " Thoburn Entities" ) along with John Thoburn, Rosemary Thoburn and Renee Thoburn, own 74.54 acres of real property (" the Property" ) valued at $34,100,000. (Doc. 13-6, at 7.) BDC Capital, Inc. (" BDC" ) is in the business of lending money, and issued three loans to the Thoburn Entities over the course of a number of years. ( Id. at 400.) BDC borrowed the money it lent to the Thoburn Entities from TD Bank, First Virginia Community Bank, and BB& T Bank. ( Id. ) BDC pledged HME's note and deed of trust as collateral for the loan to TD Bank. (Doc. 4, at 6.) BDC also pledged HMW's note and deed of trust as collateral for the loans to BB& T Bank and First Virginia Community Bank. (Doc. 4, at 8.) BB& T later transferred the loan to HM Investments LC (" HMI" ). ( Id. ) On July 21, 2011, BDC filed a Chapter 11 petition for bankruptcy in the Bankruptcy Court for the Eastern District of Virginia (" Bankruptcy Court" ). (Doc. 11, at 1.) Subsequently, on February 27, 2012, TLP and Mr. Thoburn filed a Chapter 11 petition for bankruptcy. ( Id. ) On November 9, 2012, HMW and HME also filed Chapter 11 petitions for bankruptcy. ( Id. at 2.) The Bankruptcy Court consolidated TLP and Mr. Thoburn's petition with the HMW and HME petitions on December 27, 2012. ( Id. )

The resulting consolidated property, called the Assemblage, is well situated on the Dulles Toll Road and near a future Metro Station on the Silver Line that will connect Dulles International Airport to Washington, D.C. (Doc. 13-3, at 350-51.) Half of the Metro line construction is underway while the other half is scheduled for completion within several years. ( Id. )

On June 27, 2012, BDC and TD Bank filed proofs of claim in Mr. Thoburn's case. (Doc. 11, at 2.) On March 13, 3, BDC and HMI filed proofs of claim in the HME case. ( Id. at 3.) Finally, on March 13, 2013, BDC and TD Bank filed proofs of claim in the HMW case. ( Id. ) In an attempt to determine whether its creditors had the right to vote on the Thoburn Entities' reorganization plan, BDC filed a Motion to Determine BDC's Entitlement to Voting Rights, 1111(b) Election, and Right to Payment on May 28, 2013. (Doc. 13-3, at 326.)

On August 1, 2013, the Bankruptcy Court entered a Memorandum Opinion and Order holding that TD Bank and First Virginia Community Bank hold BDC's claims against HMW, and have a right to vote because the applicable loan documents provided that " upon default, all payments are to be made to the respective bank, not to BDC." ( Id. at 354, 357.) On August 19, 2013, the Bankruptcy Court entered an Order holding that HMI is the holder of BDC's claims against HME, and has the right to ...


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