Personal Designs, Inc. v. Guymar, Inc.

MEMORANDUM AND ORDER BECHTLE, District Judge. Presently before the court is a motion to reconsider this court’s Order of September 25, 1987, staying the entry of a default judgment against plaintiffs Personal Designs, Inc. and Donald Rouse and counterclaim defendant Barbara Rouse during the pendency of bankruptcy proceedings of Donald Rouse and Barbara Rouse in their individual capacities. Defendant Lloyd Hackman and Leon Wolf request that the Order staying the entry of default judgment be limited to those counts wherein plaintiff Donald Rouse and counterclaim defendant Barbara Rouse are parties, and that this court enter default judgment to those counts wherein plaintiff Personal Designs, Inc. is a party. The filing of a bankruptcy petition under sections 301, 302 or 303 of the Bankruptcy Code, 11 U.S.C. § 101, et seq. (1979), operates to stay the commencement or continuation of a “judicial, administrative or other proceeding” against the debtor. 11 U.S.C. § 362(a)(1) (Supp.1987). Actions against co-defendants, guarantors or principals of the debtor generally are not barred by the § 362(a) stay. In re Philadelphia Gold Corp., 56 B.R. 87 (Bkrtcy.E.D.Pa.1985). Where the bankrupt defendant is an individual owning 100% of the stock of the non-bankrupt corporate co-defendant, it has been held that the two are separate legal entities and the stay does not bar proceeding against the non-bankrupt corporate co-defendant. In re Loughnane, 28 B.R. 940, 942 (Bkrtcy.D.Col.1983). CONCLUSION For the reasons stated herein, this court will stay the entry of default judgment to those counts (counts I — III, VII) wherein plaintiff Donald Rouse and counterclaim defendant Barbara Rouse are parties and will permit entry of default judgment to those counts (counts IV-VI) wherein plaintiff Personal Designs, Inc. is a party. An appropriate Order will be entered.