United States District Court, E.D. Virginia, Richmond Division
Hannah Lauck, United States District Judge.
matter comes before the Court on Appellant Brea Union Plaza
I, LLC's ("Brea") Motion to Stay (the
"Motion to Stay"). (ECF No. 2.) Appellees Toys
"R" Us, Inc., et al ("TRU")
responded, (ECF No. 10), and Brea replied, (ECF No. 11). The
matter is ripe for disposition. The Court exercises
jurisdiction pursuant to 28 U.S.C. §
Court dispenses with oral argument because the materials
before it adequately •j present the facts and legal
contentions, and argument would not aid the decisional
process. For the reasons that follow, the Court
will deny the Motion to Stay. (ECF No. 2.)
Factual and Procedural Background
1996, Toys "R" Us Delaware, Inc. ("TRU
Delaware") opened a Babies "R" Us store in
Brea Union Plaza in California pursuant to a lease between
TRU Delaware and Brea Union Partners (the "TRU
Lease"). Brea Union Plaza I, LLC ("Brea") is
the successor in interest to Brea Union Partners.
2009, Brea entered into a lease with Ross Dress for Less,
Inc. ("Ross") for another parcel in the same
shopping center (the "Ross Lease"). The Ross Lease
includes an exclusive-use provision prohibiting Brea from
leasing any parcel to an entity that would sell
"off-price" apparel in competition with Ross.
February 27, 2018, as part of ongoing bankruptcy proceedings,
TRU sought approval from the United States Bankruptcy Court
for the Eastern District of Virginia (the "Bankruptcy
Court") of bidding procedures to sell certain real
property and unexpired real property leases, including the
TRU Lease. The Bankruptcy Court approved TRU's proposed
bidding process. Following the bidding process, TRU sought
the Bankruptcy Court's approval to assign the TRU Lease
to Burlington Coat Factory Warehouse Corporation
objected to the proposed assignment, claiming it would cause
Brea to be in breach of the Ross Lease. The Ross Lease
No tenant or occupant of the Shopping Center (other than
[Ross]) may use, and Landlord, if it has the capacity to do
so, shall not permit any other tenant or occupant of the
Shopping Center to (a) use its premises for the Off Price
sale (as hereinafter defined) of apparel....
(Mem. Supp. Mot. Stay ¶ 6 (alterations in original);
see also Bankr. Docket No. 3590-7 4, ECF No. 3-2.)
April 13, 2018, the Bankruptcy Court entered an order (the
"Original Assignment Order") authorizing TRU to
"consummate fifteen sale agreements and 28 lease
termination agreements." (Resp. ¶ 7 (citing Bankr.
Docket No. 2715).) The Original Assignment Order did not
authorize the assignment of the TRU Lease from TRU to
Burlington. On May 10, 2018, the Bankruptcy Court held a
hearing on the proposed lease assignment and on May 25, 2018,
the Bankruptcy Court entered a Memorandum Opinion and Order
approving the assignment of the TRU Lease to Burlington (the
"Burlington Assignment"). On May 30, 2018, the
Bankruptcy Court made clerical changes to its original
opinion and redocketed the opinion (the "Bankruptcy
Opinion"). On May 31, 2018, the Bankruptcy Court entered
a supplemental order (the "Supplemental Order")
authorizing the assumption and sale of the TRU Lease from TRU
to Burlington and specifying that "all the relief
granted in the Original [Assignment] Order shall apply to the
[Burlington Assignment], as applicable." (Mem. Supp.
Mot. Stay ¶ 11 (citing Suppl. Order 3, App. 467, ECF No.
1, 2018, in accordance with the Bankruptcy Court's
Supplemental Order, TRU "executed the assumption and
assignment agreement with Burlington and Burlington took
possession of and occupied the premises." (Resp. Mot.
Stay ¶ 10, ECF No. 10.)
13, 2018, Brea filed a Notice of Appeal in this Court (the
"Appeal"), appealing the Bankruptcy Opinion and the
Supplemental Order. (ECF No. 1.) On June 20, Brea moved- in
the Bankruptcy Court-for a stay of the Bankruptcy Opinion and
Supplemental Order pending the Appeal in this Court. Brea
also asked the Bankruptcy Court for an expedited hearing on
its Motion to Stay. After a June 25, 2018 hearing, the
Bankruptcy Court denied Brea's Motion to Stay.
3, 2018, more than one month after TRU assigned the TRU Lease
to Burlington, Brea filed the Motion to Stay in this Court.
Brea sought an expedited ruling on the Motion to Stay, (ECF
No. 4), which TRU did not oppose, (ECF No. 7). After full
briefing, (ECF Nos. 10, 11), the Motion to Stay is ripe for
adjudication. For the reasons that follow, the Court will
deny the Motion to Stay.
Legal Standard for Stays Pending Appeal
United States Court of Appeals for the Fourth Circuit has
articulated the following test to determine whether a stay
pending appeal should be granted:
a party seeking a stay must show (1) that he [or she] will
likely prevail on the merits of the appeal, (2) that he [or
she] will suffer irreparable injury if the stay is denied,
(3) that other parties will not be substantially harmed by
the stay, and[, ] (4) that the public interest will be served
by granting the stay.
Long v. Robinson,
432 F.2d 977, 979 (4th Cir. 1970).
This test applies to appeals from the Bankruptcy Court.
See, e.g., In re Alpha Natural Res., Inc., 556 B.R.
249, 253 (Bankr. E.D. Va. 2016). The first two factors are
the most important. Realvirt, LLC v. Lee, 220
F.Supp.3d 704, 706 (E.D. ...