In re Roman Catholic Bishop of Oakland Bankruptcy Automatic Stay Appeal

• Court: District Court, N.D. California
• Decided: April 7, 2026
• Docket: 3:25-cv-06836
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 IN RE ROMAN CATHOLIC BISHOP OF Case No. 25-cv-06836-JSC OAKLAND BANKRUPTCY 8 AUTOMATIC STAY APPEAL, ORDER RE: APPEAL OF RELIEF 9 FROM AUTOMATIC STAY This Document Applies to: 10 Re: Dkt. No. 1 11 ALL CASES

13 The Roman Catholic Bishop of Oakland’s (“Debtor’s”) filing of a voluntary chapter 11 14 petition in 2023 automatically stayed hundreds of sexual abuse claims pending against it in state 15 court. (Bankr. Dkt. Nos. 1, 19.)1 On June 25, 2025, the Official Committee of Unsecured 16 Creditors of the Roman Catholic Bishop of Oakland (“the Committee”) moved for relief from the 17 automatic stay as to six state court cases against the Debtor. (Bankr. Dkt. No. 2093.) The 18 bankruptcy court granted the motion and terminated the automatic stay “to allow six State Court 19 Actions to proceed, as directed by the State Court.” (Bankr. Dkt. No. 2168 at 2.) Several of 20 Debtor’s insurers (“Insurers”) now appeal the bankruptcy court’s order. (Dkt. No. 1.)2 Having 21 carefully considered the parties’ submissions, the Court AFFIRMS the bankruptcy court. 22 The bankruptcy court operated within its broad latitude under section 362(a) when it 23

24 1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of the documents. (Bankr. Dkt. No.) indicates filings on 25 Bankruptcy Docket No. 23-40523, and pinpoint citations are to the ECF-generated page numbers at the bottom of the documents. 26 2 Insurer-Appellants include Westport Insurance Corporation f/k/a Employers Reinsurance Corporation; London Market Insurers; Insurance Company of North America, Westchester Fire 27 Insurance Company; Pacific Indemnity Company; Pacific Employers Insurance Company; 1 terminated the automatic stay as to six state court cases and allowed the state court to select those 2 six cases. The bankruptcy court also did not abuse its discretion in finding cause for relief from 3 the stay. And Insurers’ arguments the Committee lacked standing to bring its motion or the order 4 violates 11 U.S.C. § 1123’s requirements for a reorganization plan are unavailing. 5 BACKGROUND 6 On October 13, 2019, California enacted Assembly Bill 218 (“AB 218”), which “revived 7 the statute of limitations for individuals to file civil lawsuits for child sexual abuse.” (Bankr. Dkt. 8 No. 19 ¶ 84.) In response, many plaintiffs filed cases in California state court alleging sexual 9 abuse by clergy. (Id.) In 2020, Judicial Council Coordination Proceeding (“JCCP”) 5108 10 consolidated several cases as the “Northern California Clergy Cases” in the California Superior 11 Court for Alameda County (“Coordinated Proceedings”). (Bankr. Dkt. No. 1461-1.) 12 Debtor filed its voluntary chapter 11 petition on May 8, 2023. (Bankr. Dkt. No. 1.) At that 13 time, “there were approximately 332 separate, active lawsuits or mediation demands pending 14 against the Debtor filed by plaintiffs alleging sexual abuse by clergy or others associated with the 15 Debtor.” (Bankr. Dkt. No. 19 ¶ 84.) According to Debtor, it “ha[d] neither the financial means 16 nor the practical ability to litigate all of the abuse claims in state court,” and the bankruptcy 17 proceeding would “allow all of the claims to be filed and decided in a single forum” and “ensure 18 that all meritorious abuse claims be paid on a fair and equitable basis pursuant to an approved 19 plan.” (Id. ¶ 85.) Pursuant to 11 U.S.C. § 362(a), Debtor’s chapter 11 petition automatically 20 stayed all pending state court litigation. 21 On November 20, 2024, the Committee moved to terminate the automatic stay for six state 22 court cases to proceed to jury trial “solely for purposes of liquidation and not collection against the 23 Debtor.” (Bankr. Dkt. No. 1460 at 9 (“First Motion”).) According to the Committee, relief from 24 the automatic stay would “help the parties gain clarity on the value of Survivor claims, [] unlock 25 the liability insurance assets, and [] set this case on a path towards resolution.” (Id.) The 26 Committee assured the court it would not “cherry-pick the cases that move to trial.” (Id. at 10.) 27 Instead, “the State Court [would] select the cases that proceed to trial” based on an “order entered 1 trials.” (Id. at 9.) Debtor and Insurers opposed the First Motion. (Bankr. Dkt. Nos. 1581, 1583, 2 1585, 1589, 1591.) 3 The bankruptcy court held argument on the First Motion on January 8, 2025; January 16, 4 2025; and January 21, 2025. (Bankr. Dkt. Nos. 1630, 1659, 1667.) The parties explained a new 5 judge had been recently assigned to the Coordinated Proceedings, the anticipated process for the 6 state court identifying which cases would proceed to trial, and the timing of such trials. (See, e.g., 7 Bankr. Dkt. No. 1630 at 18-24, Bankr. Dkt. No. 1659 at 55-63.) In response, the bankruptcy court 8 raised concerns “really only one of the six advertised potential bellwether actions is potentially 9 ready anytime soon,” which “undercuts the practical effect and the practical benefit of” 10 terminating the automatic stay. (Bankr. Dkt. No. 1667 at 17.) In addition, because the new 11 presiding judge had not yet held a hearing on the Consolidated Proceedings, the bankruptcy court 12 was “not sure how that judge would otherwise want to handle matters.” (Id.) So, the bankruptcy 13 court stated:

14 [B]ecause of my uncertainty about how fast we would get to anything that looks like a helpful data point, for the moment, I’m going to deny 15 the motion for relief from stay, but it’s very much without prejudice because things may change, and it may be that it’s something that will 16 be very helpful in the future. I don’t have the sense that it would be helpful now. 17 (Id.) The bankruptcy court subsequently denied the Committee’s motion without prejudice for the 18 reasons stated in the hearings. (Bankr. Dkt. No. 1721.) 19 After the Debtor filed a Third Amended Plan of Reorganization, (Bankr. Dkt. No. 1830), 20 and the plaintiffs with claims against Debtor overwhelmingly rejected it, (Bankr. Dkt. No. 2040), 21 the Committee filed a renewed motion to lift the automatic stay, (Bankr. Dkt. No. 2093 22 (“Renewed Motion”)). Again, the Committee argued lifting the stay as to six cases pending 23 against Debtor, “solely for purposes of liquidation and not collection against the Debtor,” would 24 “help the parties gain clarity on the value of Survivor claims, [] unlock the liability insurance 25 assets, and [] set this case on a path toward resolution.” (Id. at 10.) The Committee also assured 26 the bankruptcy court the state court, rather than the Committee, would pick the state court actions. 27 (Bankr. Dkt. No. 2129 at 8.) And Debtor and Insurers again opposed relief from the stay. (Bankr. 1 Dkt. Nos. 2112, 2115, 2117, 2120.) 2 At a July 16, 2025 hearing, the bankruptcy court emphasized the automatic stay is a 3 “malleable and flexible” tool “to facilitate . . . in the broadest possible way, all the opportunities to 4 reach either a fair liquidation or a feasible reorganization.” (Bankr. Dkt. No. 2158 at 78, 80.) The 5 court first rejected Insurers’ arguments the Committee lacked standing to bring the Renewed 6 Motion because the Committee’s “purpose is to try, among other things, to regulate the process by 7 which we’re going to get to a solution,” and the Renewed Motion did not ask to release a 8 particular party from the stay but rather formed “a more general and generic request by somebody 9 who is looking at a case, and has a different theory on how it ought to progress.” (Id. at 80-81.) 10 The court also rejected the Insurers’ argument under 11 U.S.C. § 1123(a)(4), which governs 11 reorganization plans, because the Committee “is not a plan proponent,” and the Renewed Motion 12 merely offered a pathway for obtaining “information,” rather than “classifying” and “treat[ing]” 13 claims under a proposed reorganization plan. (Id. at 81.) 14 Ultimately, the bankruptcy court found “good cause reasons to lift the stay” and grant the 15 Renewed Motion. (Id. at 84.) Given wide-ranging disagreement about the claims’ value, the court 16 determined even if the cases did not “quickly . . . turn into a trial and a verdict,” “other good things 17 could come from the ability to advance aspects of the litigation.” (Id. at 83.) For example, even 18 absent trials and verdicts, pretrial motions or expert depositions could provide “information” about 19 the strengths of various claims, lead parties to form “resolutions by settlement,” or simply help 20 stakeholders measure the risks of “uncertain outcomes.” (Id. at 49, 84.) The bankruptcy court 21 found all this information would “help in focusing people on the need to come together as much as 22 they can, to express what their differences are, and to try to get a resolution here that might even 23 be consensual.” (Id. at 84.) The court also found the state court judge “now has been on the job 24 for six months,” and it had “no reason not to trust his judgment, and even more profoundly, not to 25 trust all [the parties] who would be in front of him telling him how he should be weighing and all 26 these factors” to select the six cases for trial. (Id. at 82.) 27 So, on July 26, 2025, the bankruptcy court granted the Renewed Motion “for the reasons 1 Actions to proceed, as directed by the State Court.” (Bankr. Dkt. No. 2168 at 2.) The bankruptcy 2 court clarified the stay “remain[ed] in full force and effect for all other purposes including with 3 respect to the enforcement of any judgment against the Debtor that may be obtained because of the 4 termination of the automatic stay as provided above; provided that nothing herein shall prevent the 5 entry of a judgment against the Debtor and/ or the initiation of proceedings consistent with 6 California Insurance Code Section 11580(b)(2) once a judgement is entered.” (Id. at 2-3.) 7 Insurers appealed the bankruptcy court’s order. (Bankr. Dkt. Nos. 2201, 2202, 2203, 2207.) 8 DISCUSSION 9 First, Insurers argue the bankruptcy court unlawfully delegated to the state court the choice 10 of which six state court cases to release from the stay. Second, Insurers dispute the bankruptcy 11 court’s finding of cause to lift the stay. And Insurers also contend the Committee lacked standing 12 to bring the Renewed Motion, and the order granting relief from the automatic stay violated 11 13 U.S.C. § 1123(a)(4). 14 I. JURISDICTION 15 District courts have jurisdiction over “final judgments, orders, and decrees,” as well as, 16 “with leave of the court, [] other interlocutory orders and decrees” from bankruptcy court. See 28 17 U.S.C. § 158(a). “Congress has long provided that orders in bankruptcy cases may be 18 immediately appealed if they finally dispose of discrete disputes within the larger case.” Bullard 19 v. Blue Hills Bank, 575 U.S. 496, 501 (2015) (quotation marks and citation omitted). “[F]iling a 20 petition for bankruptcy automatically ‘operates as a stay’ of creditors’ debt-collection efforts 21 outside of the umbrella of the bankruptcy case.” Ritzen Grp., Inc. v. Jackson Masonry, LLC, 589 22 U.S. 35, 37 (2020) (quoting 11 U.S.C. § 362(a)). So, “the adjudication of a motion for relief from 23 the automatic stay forms a discrete procedural unit within the embracive bankruptcy case . . . [and] 24 yields a final, appealable order when the bankruptcy court unreservedly grants or denies relief.” 25 Id. at 37-38. 26 The bankruptcy court’s order granting relief from the automatic stay is therefore a final, 27 appealable order over which this Court has jurisdiction. II. STANDARD OF REVIEW 1 In general, district courts review bankruptcy courts’ “findings of fact for clear error and 2 conclusions of law de novo.” Northbay Wellness Grp., Inc. v. Beyries, 789 F.3d 956, 959 (9th Cir. 3 2015) (citation omitted). However, “[t]he decision to grant or deny relief from the automatic stay 4 is committed to the sound discretion of the bankruptcy court, and [courts] review such [a] decision 5 under the abuse of discretion standard.” In re Conejo Enters., Inc., 96 F.3d 346, 351 (9th Cir. 6 1996) (citations omitted). So, the bankruptcy court’s decision to grant relief from the automatic 7 stay “will be reversed only if ‘based on an erroneous conclusion of law or when the record 8 contains no evidence on which [the bankruptcy court] rationally could have based that decision.’” 9 Id. (citation omitted). 10 “[T]he district court functions as an appellate court in reviewing a bankruptcy decision and 11 applies the same standards of review as a federal court of appeals.” In re Crystal Props., Ltd., 12 L.P., 268 F.3d 743, 755 (9th Cir. 2001) (quotation marks and citation omitted). So, to decide 13 whether the bankruptcy court abused its discretion, the Court first “determine[s] de novo whether 14 the [bankruptcy] court identified the correct legal rule to apply to the relief requested.” See United 15 States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009). “If the [bankruptcy] court identified the 16 correct legal rule,” the Court “determine[s] whether the [bankruptcy] court’s application of the 17 correct legal standard was (1) illogical, (2) implausible, or (3) without support in inferences that 18 may be drawn from the facts in the record.” Id. (quotation marks and citation omitted). “If any of 19 these three apply,” the bankruptcy court “abused its discretion by making a clearly erroneous 20 finding of fact.” Id.; see also In re Advanced Med. Spa Inc., BAP No. EC-16-1087-KuMaJu, 2016 21 WL 6958130, at *3 (B.A.P. 9th Cir. Nov. 28, 2016) (applying Hinkson standard to appeal from 22 order denying relief from automatic stay). 23 III. AUTHORITY TO DELEGATE SELECTION OF CASES 24 Federal district courts, and bankruptcy courts by reference, “have original and exclusive 25 jurisdiction of all cases under title 11.” See 28 U.S.C. § 1334(a); 28 U.S.C. § 157(a); see also In 26 re Gruntz, 202 F.3d 1074, 1080 (9th Cir. 2000) (“By the plain wording of [section 1334], 27 Congress has expressed its intent that bankruptcy matters be handled exclusively in a federal 1 forum.” (citing MSR Exploration, Ltd. v. Meridian Oil, Inc., 74 F.3d 910, 913 (9th Cir. 1996)). 2 Pursuant to 11 U.S.C. § 362(a), a debtor’s filing of a chapter 11 bankruptcy petition 3 automatically stays all claims for recovery against the debtor. See 11 U.S.C. § 362(a). “The 4 automatic stay is self-executing” and “sweeps broadly, enjoining the commencement or 5 continuation of any judicial, administrative, or other proceedings against the debtor.” In re 6 Gruntz, 202 F.3d at 1081. “The ‘automatic stay gives the bankruptcy court an opportunity to 7 harmonize the interests of both debtor and creditors while preserving the debtor’s assets for 8 repayment and organization of his or her obligations.’” Id. (quoting In re MacDonald, 755 F.2d 9 715, 717 (9th Cir. 1985)). The automatic stay is therefore “[c]entral to the bankruptcy case as to 10 which exclusive Article I federal jurisdiction lies,” id., and “plays a vital and fundamental role in 11 bankruptcy,” Hillis Motors, Inc. v. Hawaii Auto. Dealers’ Ass’n, 997 F.2d 581, 585 (9th Cir. 12 1993) (citations omitted). 13 Congress has also authorized bankruptcy courts to “[o]n request of a party in interest and 14 after notice and a hearing, . . . grant relief from the stay . . . such as by terminating, annulling, 15 modifying, or conditioning such stay[] for cause.” See 11 U.S.C. § 362(d); see also 28 U.S.C. §§ 16 157(b)(1), (b)(2)(G) (providing “motions to terminate, annul, or modify the automatic stay” are 17 “core” bankruptcy proceedings). “[B]y virtue of the power vested in them by Congress, the 18 federal courts have the final authority to determine the scope and applicability of the automatic 19 stay.” In re Gruntz, 202 F.3d at 1083. 20 Insurers therefore argue the bankruptcy court unlawfully delegated its authority over the 21 automatic stay by terminating the stay as to six state court cases but allowing the state court to 22 select those six cases. Insurers primarily rely on In re Gruntz’s statement “[a]ny state court 23 modification of the automatic stay would constitute an unauthorized infringement upon the 24 bankruptcy court’s jurisdiction to enforce the stay.” Id. at 1082. But rather than impose a non- 25 delegation principle, In re Gruntz applied the “well-established judicially declared rule that state 26 courts are completely without power to restrain federal-court proceedings.” Id. (quoting Donovan 27 v. City of Dallas, 377 U.S. 408, 412-13 (1964)). So, “actions taken in violation of the automatic 1 court] judgments” entered in violation of the automatic stay. Id. at 1082 & n.3 (citing In re 2 Schwartz, 954 F.2d 569, 571 (9th Cir. 1992)). In In re Gruntz, the Ninth Circuit therefore held 3 when a state court proceeded with a criminal prosecution for unpaid child support despite the 4 debtor’s bankruptcy, the state court’s determination the automatic stay did not apply to the 5 criminal prosecution did not bind the bankruptcy court. See id. at 1077-78, 1084. So, rather than 6 limiting bankruptcy courts’ flexibility to grant relief from an automatic stay, In re Gruntz merely 7 reinforced bankruptcy courts’ “final authority to determine the scope and applicability” of any 8 stay. See id. at 1083. 9 None of the other cases Insurers cite support their argument. See, e.g., In re McGhan, 288 10 F.3d 1172, 1181 (9th Cir. 2002) (holding “only the bankruptcy court could [] grant relief” from a 11 discharge order, which the plaintiff attacked in state court for lack of notice); In re Dunbar, 245 12 F.3d 1058, 1064 (9th Cir. 2001) (reversing a bankruptcy court’s determination it was estopped 13 from reconsidering the scope of an automatic stay when a state agency determined a claim fell 14 outside the scope of the stay); MSR Exploration, Ltd., 74 F.3d at 916 (holding a federal district 15 court lacked jurisdiction to decide whether creditors’ claims were maliciously filed in ongoing 16 bankruptcy proceeding). 17 Ultimately, the Ninth Circuit has emphasized “section 362 gives the bankruptcy court wide 18 latitude in crafting relief from the automatic stay.” In re Wardrobe, 559 F.3d 932, 937 (9th Cir. 19 2009) (quoting In re Schwartz, 954 F.2d at 572). In light of this wide latitude to “terminat[e], 20 annul[], modify[], or condition[]” the automatic stay, 11 U.S.C. § 362(d), the Court will not adopt 21 Insurers’ unprecedented argument section 362 does not allow a bankruptcy court to terminate the 22 stay as to six cases and allow the state court and the stakeholders to determine those six cases.3 23 IV. CAUSE FOR LIFTING STAY 24 A bankruptcy court “shall grant relief from the [automatic stay]” upon a showing of 25 3 However, the Court rejects the Committee’s argument Insurers waived the non-delegation 26 argument because Insurers raised their concerns in both the Renewed Motion briefing and the July 16, 2025 hearing. (Bankr. Dkt. No. 2158 at 65 (arguing the bankruptcy court “need[ed] to know 27 which cases are going out,” and telling the bankruptcy judge “that’s actually your role. And with 1 “cause.” See 11 U.S.C. § 362(d). So, “[t]o obtain relief from the automatic stay, the party seeking 2 relief must first establish a prima facie case that ‘cause’ exists for relief under § 362(d)(1).” In re 3 Plumberex Specialty Prods., Inc., 311 B.R. 551, 557 (Bankr. C.D. Cal. 2004) (citations omitted). 4 However, “‘[c]ause’ has no clear definition and is determined on a case-by-case basis.” In re 5 Conejo, 96 F.3d at 352 (quotation marks and citation omitted). So, “it is impossible to define for 6 all relief from stay motions what will constitute a prima facie case of cause.” In re Advanced Med. 7 Spa, 2016 WL 6958130, at *5. 8 Courts in the Ninth Circuit consider the “non-exclusive” factors from In re Curtis, 40 B.R. 9 795 (Bankr. D. Utah 1984), “in deciding whether to grant relief from [an] automatic stay to allow 10 pending litigation to continue in another forum.” In re Kronemyer, 405 B.R. 915, 921 (B.A.P. 9th 11 Cir. 2009). Those factors are:

12 (1) Whether the relief will result in a partial or complete resolution of the issues. 13 (2) The lack of any connection with or interference with the bankruptcy case. 14 (3) Whether the foreign proceeding involves the debtor as a fiduciary. (4) Whether a specialized tribunal has been established to hear the 15 particular cause of action and that tribunal has the expertise to hear such cases. 16 (5) Whether the debtor’s insurance carrier has assumed full financial responsibility for defending the litigation. 17 (6) Whether the action essentially involves third parties, and the debtor functions only as a bailee or conduit for the goods or proceeds 18 in question. (7) Whether litigation in another forum would prejudice the interests 19 of other creditors, the creditors’ committee and other interested parties. 20 (8) Whether the judgment claim arising from the foreign action is subject to equitable subordination under Section 510(c). 21 (9) Whether movant’s success in the foreign proceeding would result in a judicial lien avoidable by the debtor under Section 522(f). 22 (10) The interest of judicial economy and the expeditious and economical determination of litigation for the parties. 23 (11) Whether the foreign proceedings have progressed to the point where the parties are prepared for trial. 24 (12) The impact of the stay on the parties and the “balance of hurt.” 25 In re Curtis, 40 B.R. 795, 799-800 (Bankr. D. Utah 1984) (citations omitted). 26 The bankruptcy court considered the relevant Curtis factors in finding cause to grant the 27 Renewed Motion. As to the first Curtis factor, the bankruptcy court found advancing the state 1 “information,” advancing “resolutions by settlement,” or reminding all stakeholders of the 2 “uncertain outcomes” absent consensual resolution. (Bankr. Dkt. No. 2158 at 84.) As to the 3 second Curtis factor, the bankruptcy court found interference with the bankruptcy case was not 4 “terribly implicated here” because all the stakeholders would “have th[e] opportunity” to guide the 5 cases through the state court. (Id. at 82.) And, in contrast to the First Motion, there was no longer 6 “a plan out there, people [] talking” which could have “end[ed] up with something resolved” 7 without lifting the stay. (Id. at 83.) Furthermore, given the recent rejection of the Third Amended 8 Plan of Reorganization and future plan confirmation hearings, the court concluded granting relief 9 from the stay could “create additional pressures on everybody” to “focus[] attention,” and “try to 10 get to a resolution here that might even be consensual.” (Id. at 84.) 11 Insurers argue the bankruptcy court abused its discretion in finding cause to terminate the 12 stay as to six court cases. Because the bankruptcy court applied the correct legal standard, the 13 Court must decide whether its application of the standard “was (1) illogical, (2) implausible, or (3) 14 without support in inferences that may be drawn from facts in the record.” See Hinkson, 585 F.3d 15 at 1262 (quotation marks and citation omitted). Insurers first contend because the Committee 16 “failed to submit any evidence or filings related to the six State Court Actions for which it sought 17 stay relief, or even to the claims at issue in the Coordinated Proceedings,” there were no facts in 18 the record from which the bankruptcy court could draw an inference cause existed. (Dkt. No. 23 19 at 24.) But cause “is determined on a case-by-case basis.” See In re Conejo, 96 F.3d at 352 20 (quotation marks and citations omitted). Here, the bankruptcy court found cause based in part on 21 the status of its own proceedings, in which the creditors had recently—and overwhelmingly— 22 rejected a proposed reorganization plan. Furthermore, across the First and Renewed Motions, the 23 bankruptcy court held four hearings for the parties and discussed the status of the state court 24 proceedings, in which the parties are also participants. So, given the bankruptcy court’s 25 familiarity with its own and the state court’s proceedings, Insurers’ argument the bankruptcy court 26 relied on insufficient evidence to find cause is unavailing. 27 Insurers also argue because the stakeholders have a lot of information about settlement 1 court’s finding relief from the stay could provide useful information about claim values is “clearly 2 erroneous.” (Dkt. No. 23 at 25.) But despite access to this information, the stakeholders have not 3 yet resolved the bankruptcy proceedings. So, it was not clearly erroneous for the bankruptcy court 4 to conclude additional information may be useful. See also In re Diocese of Buffalo, N.Y., 665 5 B.R. 198, 202 (Bankr. W.D.N.Y. 2024) (“With each passing day, the lack of settlement suggests 6 the need to try a different approach.”). Furthermore, the bankruptcy court’s finding relief from the 7 stay could provide useful information was not limited to information about claim values. The 8 Committee argued pre-trial motions or expert depositions would develop stakeholders’ opinions 9 on the cases and willingness to accept risk in proceeding with them, and the bankruptcy court 10 agreed even absent “a trial and a verdict, . . . the ability to advance some aspects of the litigation . . 11 . can only help.” (Bankr. Dkt. No. 2158 at 49, 83.) 12 For the same reason, Insurers’ contention the bankruptcy court could not plausibly find 13 relief from the stay for six cases would aid in settlement without first finding those six cases are 14 representative of all the cases in the Consolidated Proceedings is unavailing. Even if the six 15 selected cases are not representative, the bankruptcy court’s finding advancing aspects of the 16 litigation could help achieve a consensual resolution remains plausible. Also plausible is the 17 bankruptcy court’s conclusion allowing six cases to proceed would “create additional pressure[]” 18 to “focus[] people on the need to come together as much as they can, to express what their 19 differences are and to try to get to a resolution here that might even be consensual.” (Id. at 84.) 20 See also In re Diocese of Buffalo, N.Y., 665 B.R. at 202 (“By pushing litigants closer to a trial of 21 tort claims, we hope that the parties may better appreciate their risks and the benefits of a 22 consensual plan.”). In addition, the bankruptcy court noted the stakeholders in the bankruptcy 23 proceeding “would be in front of [the state court judge] telling him how he should be weighing 24 and balancing all these factors,” and so would “have that opportunity” to identify six useful cases 25 to advance. (Bankr. Dkt. No. 2158 at 82.) 26 So, Insurers have not shown the bankruptcy court abused its discretion in finding cause to 27 terminate the stay as to six state court cases. In light of bankruptcy courts’ “wide latitude in 1 citation omitted), Insurers’ argument other bankruptcy courts have approached relief from the 2 automatic stay differently is unavailing. 3 V. THE COMMITTEE’S AUTHORITY TO BRING THE RENEWED MOTION 4 “[A] creditor’s committee formed in a Chapter 11 case has a fiduciary duty to all 5 unsecured creditors rather than to individual members of the committee.” In re Islet Sciences, 6 Inc., 640 B.R. 425, 451 (Bankr. D. Nev. 2022) (citations omitted). At least one bankruptcy court 7 has therefore held a creditor’s committee “lacks standing to assert rights on behalf of specific 8 creditors in their individual capacity.” In re Bonert, 619 B.R. 248, 254 (Bankr. C.D. Cal. 2020). 9 Relying on In re Bonert, Insurers argue the Committee lacked standing to bring the Renewed 10 Motion because the motion asserted rights to stay relief on behalf of six claims, rather than on 11 behalf of all unsecured creditors. But the Committee sought select stay relief as a potential 12 pathway to reach a consensual resolution of Debtor’s bankruptcy proceeding, which would benefit 13 all unsecured creditors. So, the Renewed Motion does not exclusively benefit the creditors whose 14 claims will immediately advance. Instead, as the bankruptcy court found, the Renewed Motion 15 “c[ould] certainly be brought by a committee whose purpose is to try, among other things, to 16 regulate the process whereby we’re going to get to a solution.” (Bankr. Dkt. No. 2158 at 80.) 17 And rather than a request for a “particular party to ask for relief from stay,” the Committee made 18 “a more general and generic request by somebody who is looking at a case, and has a different 19 theory on how it ought to progress.” (Id. at 80-81.) Finally, the Court “need not consider 20 arguments” Insurers raise about the scope of a committee’s authority under 11 U.S.C. § 1103(c) 21 “for the first time in [their] reply brief.” See Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007) 22 (citation omitted). So, the bankruptcy court did not err in refusing to deny the Renewed Motion 23 on standing grounds. 24 VI. VIOLATIONS OF PLAN REQUIREMENTS 25 11 U.S.C. § 1123(a)(4) provides “a plan shall . . . provide the same treatment for each 26 claim or interest of a particular class, unless the holder of a particular claim or interest agrees to a 27 less favorable treatment of such particular claim or interest.” See 11 U.S.C. § 1123(a)(4). Insurers ] cases are representative violates section 1123(a)(4). But “[s]ection 1123 describes the required 2 || contents of a Chapter 11 plan,” see In re Transwest Resort Props., Inc., 881 F.3d 724, 728 (9th 3 Cir. 2018) (citation omitted), not the bankruptcy court’s power to modify or terminate the section 4 || 362(a) automatic stay. As the bankruptcy court noted, the Committee was “not a plan proponent” 5 || when it moved for relief from the stay. (Bankr. Dkt. No. 2158 at 81.) And because the 6 || bankruptcy court’s order clarified the stay “remain[ed] in full force and effect . . . with respect to 7 || the enforcement of any judgment against the Debtor that may be obtained because of the 8 || termination of the automatic stay as provided above,” (Bankr. Dkt. No. 2168 at 2-3), the stay relief 9 || does not inevitably prejudice claims in a hypothetical future plan. So, the bankruptcy court did 10 || not err in refusing to deny the Renewed Motion on section 1123(a)(4) grounds. 1] CONCLUSION 12 For the reasons stated above, the Court AFFIRMS the bankruptcy court’s order terminating 13 || the automatic stay as to six pending state court actions for purposes of liquidation but not 14 || collection against Debtor. IT IS SO ORDERED. a 16 || Dated: April 7, 2026

18 ne AC@UELINE SCOTT CORLE 19 United States District Judge 20 21 22 23 24 25 26 27 28