GoldenTree Asset Management LP v. FOMB

• Court: Court of Appeals for the First Circuit
• Decided: January 22, 2024
• Docket: 23-1737
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 23-1737

IN RE: THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE COMMONWEALTH OF PUERTO RICO; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO SALES TAX FINANCING CORPORATION, a/k/a Cofina; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE EMPLOYEES RETIREMENT SYSTEM OF THE GOVERNMENT OF THE COMMONWEALTH OF PUERTO RICO; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO HIGHWAYS AND TRANSPORTATION AUTHORITY; THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC POWER AUTHORITY (PREPA); THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE OF THE PUERTO RICO PUBLIC BUILDINGS AUTHORITY,

Debtors, __________________

GOLDENTREE ASSET MANAGEMENT LP; SYNCORA GUARANTEE, INC.,

Movants-Appellants,

v.

THE FINANCIAL OVERSIGHT AND MANAGEMENT BOARD FOR PUERTO RICO, AS REPRESENTATIVE FOR THE PUERTO RICO ELECTRIC POWER AUTHORITY,

Debtor-Appellee,

PUERTO RICO FISCAL AGENCY AND FINANCIAL ADVISORY AUTHORITY,

Interested Party-Appellee,

OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF ALL TITLE III DEBTORS OTHER THAN PBA AND COFINA,

Intervenor, U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE,

Intervenor.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

Hon. Laura Taylor Swain,1 U.S. District Judge

Before

Kayatta, Thompson, and Rikelman, Circuit Judges.

Thomas E. Lauria, with whom Glenn M. Kurtz, John K. Cunningham, White & Case LLP, and Lydia M. Ramos Cruz were on brief, for appellant GoldenTree Asset Management LP. Susheel Kirpalani, Eric Kay, Quinn Emanuel Urquhart & Sullivan, LLP, Rafael Escalera, Carlos R. Rivera-Ortiz, and Reichard & Escalera on brief for appellant Syncora Guarantee, Inc. Martin J. Bienenstock, with whom Mark D. Harris, Margaret A. Dale, Timothy W. Mungovan, John E. Roberts, and Proskauer Rose LLP were on brief, for appellees the Financial Oversight and Management Board for Puerto Rico, as representative of the Puerto Rico Electric Power Authority, and the Puerto Rico Fiscal Agency and Financial Advisory Authority. Pedro A. Jimenez, with whom Luc A. Despins, Eric D. Stolze, and Paul Hastings LLP were on brief, for intervenor Official Committee of Unsecured Creditors for all Title III Debtors, other than PBA and Cofina. Michael C. McCarthy and Maslon LLP on brief for intervenor U.S. Bank National Association, as Trustee.

January 22, 2024

1 Of the Southern District of New York, sitting by designation. KAYATTA, Circuit Judge. This case arises from a

proceeding to restructure the debts of the Commonwealth of Puerto

Rico's public power company ("PREPA") under Title III of the Puerto

Rico Oversight, Management, and Economic Stability Act

("PROMESA"). Appellants GoldenTree Asset Management and Syncora

Guarantee (the "Bondholders") hold around $1 billion of PREPA's

roughly $8 billion in bonds. Since 2017, the Bondholders -- and

similarly-situated creditors and insurers -- have sought relief

from PROMESA's so-called automatic stay on actions against PREPA's

estate. The Bondholders want this relief so they can seek the

appointment of a receiver for PREPA.

In this appeal, the Bondholders argue that the automatic

stay lifted by operation of law, because the district court

overseeing the Title III restructuring (the "Title III court")

denied their latest motion for relief without first noticing and

holding a hearing within the timeframe prescribed by 11 U.S.C.

§ 362(e)(1). We hold that the Bondholders waived their right to

prompt notice and hearing on that motion for relief. This is

because the Bondholders accepted a litigation schedule that

postponed any hearing on their request for leave to seek

appointment of a receiver until after a parallel proceeding about

whether -- and to what extent -- the Bondholders had any collateral

to protect in the first place. We therefore affirm the judgment

of the Title III court. Our reasoning follows.

- 3 - I.

To frame our analysis, we first summarize: (A) the

applicable statutory law; (B) the relevant details of the

Bondholders' loan agreement with PREPA; and (C) the procedural

history of this case.

A.

Title III of PROMESA authorizes the Financial Management

and Oversight Board of Puerto Rico (the "Board") to restructure

Puerto Rico's public debt through "quasi-bankruptcy proceedings."

See Assured Guaranty Corp. v. Fin. Oversight & Mgmt. Bd. for P.R.,

872 F.3d 57, 59 (1st Cir. 2017). The automatic stay provision of

the Bankruptcy Code applies to those proceedings. See 11 U.S.C.

§ 362 (automatic stay provision); 48 U.S.C. § 2161(a)

(incorporating the automatic stay into PROMESA). In brief, a

petition for restructuring under Title III "operates as a stay,

applicable to all entities, of . . . any act to obtain possession

of property of [or from] the [debtor's] estate . . . or to exercise

control over property of the estate." 11 U.S.C. § 362(a)(3).

Thereafter, the Title III court may lift, modify, or otherwise

grant relief from the stay "for cause, including the lack of

adequate protection of an interest in property of [the requesting]

party in interest." 11 U.S.C. § 362(d)(1).

Section 362(e)(1) grants creditors the right to a prompt

hearing on requests for relief from the automatic stay. Once a

- 4 - party requests such relief, the stay terminates in thirty days

unless the court "after notice and a hearing, orders such stay

continued in effect pending the conclusion of, or as a result of,

a final hearing and determination [of the motion's merits]." 11

U.S.C. § 362(e)(1). Any such continuance, though, lasts for only

thirty days after the preliminary hearing, unless either the

parties agree otherwise or the court finds that "compelling

circumstances" justify some other specified delay. Id.

B.

Here, the Bondholders loaned PREPA money pursuant to a

contract called the Trust Agreement. The pertinent terms of that

contract are authorized by (and in some instances set forth in)

the Authority Act, which is the Commonwealth legislation that

established PREPA. See, e.g., 22 L.P.R.A. §§ 193, 196(o), 206.

Three aspects of the Trust Agreement are relevant here.

First, the Trust Agreement governs how PREPA must

distribute its revenues. See 22 L.P.R.A. § 206(e)(1) (allowing

revenue distribution provisions in PREPA's loan agreements).

Broadly speaking, the Trust Agreement establishes a "waterfall"

structure. PREPA's revenues first flow into a General Fund. PREPA

draws on the General Fund to pay current expenses. Any remaining

revenue -- minus a reserve for future operating expenses -- then

streams into the Revenue Fund. The money in the Revenue Fund

cascades first into the Sinking Fund, which pays outside creditors

- 5 - like the Bondholders, and then into the Subordinate Funds, which

finance non-operating expenses such as capital improvements.

Second, and of particular importance to the Bondholders,

the Trust Agreement requires PREPA to charge rates sufficient to

cover both its current expenses and 120% of its bond service

obligations for the following fiscal year. See id. § 206(e)(2)

(permitting such rate covenants).

Third, the Trust Agreement specifies remedies that apply

if PREPA defaults on its obligations to its creditors. Notably,

if PREPA defaults, then the creditors may place PREPA into

receivership if: (1) more than thirty days have passed since

default, and (2) bondholders representing 25% of the outstanding

principal amount request receivership. Under the Authority Act,

such a receiver can take steps aimed at forcing PREPA to collect

and apply sufficient revenue to cure the utility's default. See

id. § 207(a)–(b).

PREPA has been in default since mid-2017. See In re

Fin. Oversight and Mgmt. Bd. for P.R., 899 F.3d 13, 18 (1st Cir.

2018). Moreover, the Bondholders assert (and the Board does not

dispute) that creditors representing at least 30% of the

outstanding principal bond amount have requested receivership.

Therefore, the Bondholders' right to seek the appointment of a

receiver for PREPA appears to have been triggered. But as long as

the automatic stay remains in effect, the Bondholders may not

- 6 - exercise control over PREPA by seeking appointment of a receiver.

See, e.g., In re Bello, 612 B.R. 389, 394–95 (Bankr. E.D. Mich.

2020). They must first obtain relief from the automatic stay.

C.

We complete our initial framing by summarizing the

travel of this case, training our attention on the Bondholders'

efforts to lift the automatic stay over the course of six years.

1.

Within a month of PREPA entering Title III proceedings

in 2017, the Bondholders filed their first motion to lift the

automatic stay. The Bondholders argued that there was cause to

lift the stay because their property interests in PREPA's estate

lacked adequate protection. More specifically, they argued that

PREPA had failed to set sufficient rates, mismanaged its

operations, and misdirected revenues away from debt service. The

Bondholders therefore sought appointment of a receiver to ensure

a steady stream of debt service payments.

The Title III court denied the motion in September 2017,

concluding that PROMESA barred a Title III court from letting PREPA

fall into receivership. The court also found that, in any event,

there was no cause to lift the stay. On appeal, this court

partially reversed, holding that PROMESA did not foreclose PREPA

entering receivership. In re Fin. Oversight & Mgmt. Bd. for P.R.,

- 7 - 899 F.3d at 21–22. We then remanded the case so the Bondholders

could file an updated lift-stay motion. Id. at 24.

2.

Syncora filed the second lift-stay motion in

October 2018.1 The second lift-stay motion's arguments were

substantially identical to those in the first motion. Ultimately,

Syncora did not prosecute the second lift-stay motion. Instead,

Syncora and other PREPA creditors concluded a restructuring

agreement with the Board in September 2019. At the parties'

request, the Title III court indefinitely stayed the second lift-

stay motion. Syncora eventually abandoned it entirely.2

3.

Three years passed. Then, in September 2022, the Puerto

Rico Financial Advisory and Fiscal Agency Authority terminated the

2019 restructuring agreement. That termination triggered two

separate proceedings.

First, the Board moved to reanimate a previously-stayed

adversary proceeding (the "Adversary Proceeding"), in which the

Board challenged the Bondholders' claims to possess enforceable

1 GoldenTree was not a party to the second lift-stay motion. 2 Upon filing their third motion, the Bondholders requested that the court dismiss the second motion as superseded by the third.

- 8 - property interests in PREPA's estate.3 The Board's complaint

alleged that the Bondholders only had an enforceable property

interest in moneys already deposited in the Sinking and Subordinate

Funds. According to the complaint, the Bondholders did not have

an enforceable interest in PREPA's overall revenues, the

contractual covenants in the Trust Agreement, or the right to seek

a receiver.

Second, a group of creditors that included Syncora and

GoldenTree filed a joint motion to dismiss the Adversary

Proceeding. The Bondholders argued that if the court did not grant

the motion to dismiss, it should alternatively lift the automatic

stay so the Bondholders could seek appointment of a receiver. We

refer to this alternative request as the "third" motion for relief

from the automatic stay.4 As before, the Bondholders contended

that appointment of a receiver was critical. In their words, "the

time [had] come to permit the PREPA Bondholders to exercise

their . . . right to obtain the appointment of a receiver to set

affordable and sustainable electricity rates sufficient for PREPA

3 The Board had filed the complaint in the Adversary Proceeding before the 2019 restructuring agreement, but agreed to stay it -- along with the second lift-stay motion -- after the parties reached the restructuring agreement. 4 We set aside as waived the question of whether a conditional lift-stay motion (i.e., a lift-stay motion requesting that the court first consider a separate motion, and then shift focus to the lift-stay motion itself) triggers the thirty-day clock under section 362(e)(1).

- 9 - to pay its debts." To further justify the requested relief, the

Bondholders cited the length of the restructuring proceeding, and

PREPA's alleged failure to prosecute that proceeding.

The confluence of these dueling filings left the

Title III court with a scheduling question: Which motion should

it decide first? Should it start with the Bondholders' request

for leave to seek a receiver who would protect the Bondholders'

interests, or with the Board's challenge to the very nature and

scope of those interests? The Board urged the court to start with

the Adversary Proceeding, suggesting it made no sense to lift the

automatic stay before defining the scope of the Bondholders'

protectable interest in PREPA's estate. The Bondholders countered

that the court should start with the lift-stay motion. In the

alternative, the Bondholders suggested that the court could

resolve the Adversary Proceeding first, while also setting strict

deadlines for PREPA to file a restructuring plan.

At a hearing held within thirty days of the filing of

the Bondholders' third lift-stay motion, the Title III court

concluded that the Adversary Proceeding "should go first." The

court reasoned that to the extent the third lift-stay motion sought

"relief from the stay to appoint a receiver to race to pay the

[B]ondholders," granting the motion would "disrupt an already

complex process, all based on an assertion of a right whose

enforceability and factual foundation are questionable." To put

- 10 - the horse before the cart, so to speak, the court outlined a

litigation schedule for resolving the Adversary Proceeding first,

while staying the third lift-stay motion in the interim.

No party argues on appeal that the Title III court's

stay of the third lift-stay motion was reversible error. And the

Bondholders do not contend that the Title III court should have

decided the third motion before now. On the contrary, in the third

lift-stay motion, the Bondholders expressly agreed to "waive the

[thirty]-day time limit . . . and to adjust the timing for

objections, briefing, and other proceedings to ensure they are

adjudicated together in the most efficient manner possible for all

interested parties." Such waivers are permissible under

section 362(e). See 11 U.S.C. § 362(e)(1) (noting that the time

limit for resolving a lift-stay motion may be "extended with the

consent of the parties in interest").

4.

On March 22, 2023, the Title III court issued a partial

summary judgment order that resolved some -- but not all -- of the

issues raised by the Adversary Proceeding. As relevant here, the

court concluded that the Bondholders had a security interest only

in moneys deposited into the Sinking and Subordinate Funds. They

did not have a security interest in all PREPA revenues, or in the

relevant remedies and covenants in the Trust Agreement (i.e., the

covenant to raise rates and the right to appoint a receiver). To

- 11 - the extent the Bondholders had any claim on PREPA's overall

revenues, it was an unsecured claim for the present value of

PREPA's future net revenues. The Title III court eventually

estimated that claim at around $2.4 billion. The court left

several issues undecided. These included (among other things) the

Bondholders' requests for declaratory judgment that PREPA had

breached its contractual covenants, breached trust obligations on

behalf of the Bondholders, and unconstitutionally taken the

Bondholders' property without just compensation.

Rather than continue to abide by the Title III court's

unchallenged order of proceedings, the Bondholders filed a fourth

motion to lift the automatic stay on August 24, 2023. Like the

stayed third motion, the fourth motion sought relief from the

automatic stay so the Bondholders could "enforce their statutory

right to appointment of a receiver." And like the stayed third

motion, the fourth motion alleged that PREPA had both refused to

raise electricity rates and mishandled the diminished revenues it

received.

In a sua sponte order -- which is the order now on appeal

-- the Title III court stayed consideration of the fourth lift-

stay motion, citing its prior ruling concerning the third motion.

The court reasoned that the Bondholders could not unilaterally

disrupt the established order of proceedings by demanding a prompt

hearing on a motion that was "substantially duplicative" of the

- 12 - third motion (i.e., the motion the Bondholders had already agreed

to stay). As the Title III court put it, the Bondholders were

trying to "achieve the litigation schedule they desire[d] by

purporting to be strangers to the already-pending proceedings."

The Bondholders timely appealed. After we received

briefing and heard oral argument in this appeal, the Title III

court issued a final summary judgment order in the Adversary

Proceeding. In that order, the court reaffirmed that: (1) the

Bondholders have a security interest only in moneys deposited in

the Sinking and Subordinate Funds; (2) the Bondholders have no

property interest in PREPA's overall revenues, or in "revenues not

yet collected for electricity not yet generated" by PREPA; and

(3) the Bondholders do not have a property right in the covenants

and remedies outlined in the Trust Agreement and/or PREPA's

enabling statute. Notwithstanding the issuance of the final

summary judgment order, the Bondholders have apparently neither

filed a renewed motion for relief from the stay, nor sought a

hearing on the third or fourth motions. They have, however, filed

an appeal from the summary judgment order.

II.

Having summarized the events giving rise to this appeal,

we begin our analysis by addressing two threshold challenges to

the Bondholders' ability to press on with this appeal.

- 13 - A.

The first challenge concerns finality. The parties

appear to agree that we may exercise jurisdiction over this appeal

only pursuant to the collateral order doctrine.5 And the Board

insists that the doctrine's requirements have not been satisfied

here.

To qualify as collateral, an order must

(1) "conclusively determine the disputed question," (2) "resolve

an important issue completely separate from the merits of the

action," and (3) be "effectively unreviewable on appeal from a

final judgment." Doe v. Mass. Inst. of Tech., 46 F.4th 61, 65

(1st Cir. 2022) (quoting Will v. Hallock, 546 U.S. 345, 349

(2006)).

This circuit has not addressed whether orders delaying

consideration of a lift-stay motion beyond the thirty-day window

established by 11 U.S.C. § 362(e)(1) are collateral orders. But

we need not address that question today. We may assume -- without

deciding -- that we have jurisdiction when a case "poses a question

of statutory, not Article III, jurisdiction," Doe v. Town of

5 We do not hold that the collateral order doctrine is indeed the only theory that could justify appellate jurisdiction in this case. But the parties have never suggested an alternative basis for our jurisdiction, so they have waived any arguments to that effect. United States v. Coplin, 463 F.3d 96, 102 n.6 (1st Cir. 2006) (noting that arguments not made in opening briefs are waived).

- 14 - Lisbon, 78 F.4th 38, 44 (1st Cir. 2023), and when the "decision on

the merits will favor the party challenging the court's

jurisdiction," id. at 45 (quoting Akebia Therapeutics, Inc. v.

Azar, 976 F.3d 86, 92 (1st Cir. 2020)). Those criteria are

satisfied here. The Board is challenging only our statutory

jurisdiction. See id. at 44 n.2 (noting that the collateral order

doctrine interprets the statutory grant of appellate jurisdiction

outlined in 28 U.S.C. § 1291). And as we will explain below, our

merits decision ultimately favors the Board. So, we may assume

our own jurisdiction without "sort[ing] out [the] thorny

jurisdictional tangles" that this case presents. Nisselson v.

Lernout, 469 F.3d 143, 151 (1st Cir. 2006).

This brings us to the second challenge. The Official

Committee of Unsecured Creditors (the "Committee") -- which has

intervened on the Board's behalf -- alleges that the Bondholders

lack any enforceable right that we may vindicate on appeal. The

Committee's argument appears to have two parts.

First, the Committee insists that the PREPA bonds are

non-recourse instruments. In the Committee's view, the

Bondholders may sue only to recover moneys deposited in the Sinking

and Subordinate Funds. Therefore, the Committee argues, the

Bondholders have no basis on which to seek a receiver, which would

necessarily exercise control over the entire PREPA estate, and not

- 15 - just the Sinking and Subordinate Funds. But the scope of the

recourse provided by the PREPA bonds is a disputed merits issue.

And the Bondholders' claim to have recourse against PREPA is hardly

so weak as to preclude them from even seeking to have a receiver

appointed. Indeed, the Title III court found in its partial

summary judgment order that the bonds were recourse instruments.

That ruling is now on direct appeal, but we see no reason to

disturb it in the meantime.

Second, the Committee claims that under the Title III

court's final summary judgment ruling, the Bondholders cannot

invoke 11 U.S.C. § 362(e). The argument here is that

section 362(e) protects only secured creditors, and the Title III

court concluded that the Bondholders have no security interest in

the right to appoint a receiver.

But the Bondholders are, in fact, secured creditors

under the Title III court's summary judgment orders. As that court

recognized, the Bondholders have -- at least -- an enforceable

security interest in the moneys deposited in the Sinking and

Subordinate Funds. Therefore, the Bondholders may bring a claim

for relief from the automatic stay, even if we assume that only

secured creditors may seek such relief. Whether the Bondholders'

security interests are more extensive than the Title III court

recognized, and whether more extensive security interests would

- 16 - bolster the case for lifting the automatic stay, are questions we

need not answer now.

We therefore reject the Committee's arguments, assume

our own statutory jurisdiction, and proceed to the merits of this

appeal.

III.

As we explained above, the Title III court considered

the fourth lift-stay motion to be "substantially duplicative of

the [third] motion." And the ruling on that third motion had been

stayed. So, the Title III court treated the fourth motion as

similarly stayed. In their brief on appeal, the Bondholders

advance only two criticisms of that ruling.

First, the Bondholders argue that their fourth motion

proffers an alternative theory of relief, and therefore is not

"duplicative" of the third motion. But both motions seek precisely

the same remedy: relief from the automatic stay "so [the

Bondholders] c[an] seek [the] appointment of a receiver." And the

motions also present identical justifications for seeking a

receiver. In the third motion, the Bondholders argue that a

receiver would "seek reasonable rates sufficient to pay PREPA's

bond debt, other creditors, and necessary operating expenses."

Meanwhile, in the fourth motion, the Bondholders envision that a

receiver would "require PREPA to raise rates, collect revenues and

deposit Net Revenues into the accounts comprising the Sinking Fund

- 17 - to repay the Bonds." We struggle to see any daylight between these

two justifications.

Granted, the Bondholders slapped a fresh coat of paint

on the fourth motion. By its terms, that motion relies on a theory

of "adequate protection," while the third motion relies on a theory

of "unreasonable delay." But this is a semantic distinction, not

a substantive one. Under the third motion's unreasonable delay

theory, keeping the automatic stay in place ensures that the

Bondholders "receiv[e] less value in exchange for their claims, in

real terms, than they are in fact entitled to receive." To phrase

it slightly differently, the unreasonable delay theory suggests

that the longer the automatic stay remains in place, the less money

(in real terms) the Bondholders will get back from PREPA.

Meanwhile, under the fourth motion's adequate protection theory,

the longer the automatic stay remains in place, the less money the

Bondholders will get back from PREPA, which is allegedly

misappropriating revenues that rightfully belong to its creditors.

Indeed, as GoldenTree states in its opening brief, the purpose of

the fourth lift-stay motion is "to vindicate [the Bondholders']

rights, which are at the brink of destruction."

In either case, the central theory of harm is the same:

As more time passes, PREPA's alleged under-collection and

misappropriation of revenues will get worse, making it even harder

for the Bondholders to get their money back. Seen this way, the

- 18 - third and fourth motions advance fundamentally identical theories.

Both motions seek the same relief (i.e., appointment of a receiver)

to alleviate the same harm (i.e., the failure to collect and

deposit PREPA revenues). So, we ultimately agree with the

Title III court that the fourth motion is simply the third motion

by another name.

That brings us to the Bondholders' second contention,

which is that factual circumstances have changed since the

Title III court stayed resolution of the third motion. At a basic

level, this is true. Between the third and fourth motions, the

Title III court ruled on some (but not all) of the issues

implicated by the Adversary Proceeding. It also entered an

estimation order setting the value of the Bondholders' unsecured

claim on PREPA's net revenues. Clearly, these new rulings cast a

pall over the Bondholders' financial interests.

We do not see, though, why these developments justified

demanding a hearing that would disrupt the Title III court's

standing order of proceedings. After all, the Title III court

stayed consideration of the Bondholders' lift-stay motions

precisely because it anticipated that rulings in the Adversary

Proceeding would bear on the merits of the lift-stay motion. The

court's scheduling order was basically a gating mechanism, which

held in abeyance any lift-stay motion until the court could

determine the scope of the Bondholders' claimed interests in

- 19 - PREPA's estate. So, the fact that the Title III court ruled on

some of the issues in the Adversary Proceeding was hardly an

unforeseen change in circumstances that permitted the Bondholders

to unilaterally subvert the scheduling order. On the contrary,

the scheduling order expressly contemplated those rulings.

IV.

The Bondholders were subject to a scheduling order. They

never sought relief from that order. Nor did they ever claim that

the order's postponement of a final hearing on the third-lift stay

motion violated section 362(e)(1). Thus, we agree with the

Title III court that the Bondholders could not unilaterally

circumvent that scheduling order by simply refiling -- without

leave -- a materially identical version of their stayed third

motion. To hold otherwise would be to invite chaos.

That being said, it appears that the Title III court's

final summary judgment order in the Adversary Proceeding could

open the door to a prompt ruling on a renewed (or entirely new)

motion for relief from the automatic stay. Nothing in this opinion

precludes the Bondholders from pressing such a motion.

For the foregoing reasons, we affirm the judgment of the

Title III court.

- 20 -