Samuel D. Sweet, Chapter 7 Trustee for the Estate of Debtors, John Frederick Shastal Jr. and Kimberly Ann Shastal, and John Frederick Shastal, an individual, and Kimberly Ann Shastal, an individual v. Majors Law, PLLC, a Professional Limited Liability Company, Sheena L. Majors, an individual, Desirae Bedford, an individual and Recovery Law Group, a Professional Corporation
This text of Samuel D. Sweet, Chapter 7 Trustee for the Estate of Debtors, John Frederick Shastal Jr. and Kimberly Ann Shastal, and John Frederick Shastal, an individual, and Kimberly Ann Shastal, an individual v. Majors Law, PLLC, a Professional Limited Liability Company, Sheena L. Majors, an individual, Desirae Bedford, an individual and Recovery Law Group, a Professional Corporation (Samuel D. Sweet, Chapter 7 Trustee for the Estate of Debtors, John Frederick Shastal Jr. and Kimberly Ann Shastal, and John Frederick Shastal, an individual, and Kimberly Ann Shastal, an individual v. Majors Law, PLLC, a Professional Limited Liability Company, Sheena L. Majors, an individual, Desirae Bedford, an individual and Recovery Law Group, a Professional Corporation) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
In re:
John Frederick Shastal, Jr. Case No. 20-31468-jda Kimberly Ann Shastal, Chapter 7 Hon. Joel D. Applebaum Debtors. ___________________________/
SAMUEL D. SWEET, Chapter 7 Trustee for the Estate of Debtors, John Frederick Shastal Jr. and Kimberly Ann Shastal, and JOHN FREDERICK SHASTAL, an individual, and KIMBERLY ANN SHASTAL, an individual,
Plaintiffs,
v. Adv. No. 24-03033-jda
MAJORS LAW, PLLC, a Professional Limited Liability Company, SHEENA L. MAJORS, an individual, DESIRAE BEDFORD, an individual and RECOVERY LAW GROUP, a Professional Corporation,
Defendants. _____________________________/
ANDREW R. VARA, United States Trustee,
Plaintiff,
v. Adv. No. 24-03076-jda RECOVERY LAW GROUP, APC and SHEENA MAJORS,
Defendants. ____________________________________/
OPINION AND ORDER DENYING RECOVERY LAW GROUP’S EMERGENCY MOTION FOR STAY PENDING APPEAL OF ORDER GRANTING SUMMARY JUDGMENT TO THE UNITED STATES TRUSTEE WITH RESPECT TO 11 U.S.C. § 526
The matter before the Court is Recovery Law Group’s Emergency Motion for Stay Pending Appeal of Order Granting Summary Judgment to the United States Trustee with Respect to 11 U.S.C. § 526. On September 17, 2025, this Court issued its Opinion Granting Summary Judgment to the United States Trustee with Respect to 11 U.S.C. § 526 and corresponding Order. The Order prospectively suspended Recovery Law Group from directly or indirectly soliciting or filing cases in the United States Bankruptcy Court for the Eastern District of Michigan and imposed a civil penalty against Recovery Law Group in the amount of $392,471, payable no later than October 30, 2025. Forty days later, on October 27, 2025, Recovery Law Group filed this Emergency Motion for Stay Pending Appeal of Order Granting Summary Judgment to the United States Trustee with Respect to 11 U.S.C. § 526 (the “Emergency Motion”). Because any emergency, real or imagined, is of Recovery Law Group’s own making in waiting 40 days to file its Emergency Motion, and because the Court
finds no basis for granting a stay pending appeal, the Emergency Motion is DENIED.
ANALYSIS
In determining whether to grant a stay pending appeal, the Court must consider the same four factors that are traditionally considered in evaluating the granting of a preliminary injunction. In re Skymark Properties II, LLC, 597 B.R. 619, 623 (Bankr. E.D. Mich. 2019). “‘These well-known factors are: (1) the
likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the prospect that others will be harmed if the court grants the stay; and (4) the public
interest in granting the stay. These factors are not prerequisites that must be met, but are interrelated considerations that must be balanced together.’” Id., quoting Michigan Coalition of RadioActive Material Users, Inc. v. Griepentrog, 945 F.2d 150, 153-54 (6th Cir. 1991). Moreover, “the harm alleged must be both certain and
immediate, rather than speculative or theoretical. In order to substantiate a claim that irreparable injury is likely to occur, a movant must provide some evidence that the harm has occurred in the past and is likely to occur again.” Id. Factor One: Recovery Law Group is Unlikely to Prevail on the Merits.
In its Emergency Motion, Recovery Law Group again argues, without more, that there are “substantial and debatable legal questions” and that “genuine disputes of material fact existed regarding Recovery Law Group’s intent, representations, and compliance with statutory disclosure obligations. . .” Emergency Motion, Dkt. No. 252, p. 3. These issues have been considered and decided by this Court repeatedly,
most recently in the Court’s September 17, 2025 Opinion. Recovery Law Group’s unsupported assertions are insufficient to support its conclusion that it will eventually prevail on appeal and, for the reasons previously explained at length
including in this Court’s September 17, 2025 Opinion, the Court does not believe Recovery Law Group will prevail on appeal. Thus, this factor weighs heavily against granting a stay.
Factor Two: Recovery Law Group Will Not be Irreparably Harmed if a Stay of Proceedings Does Not Issue.
Recovery Law Group next argues that it will be irreparably harmed if the Court’s September 17, 2025 Order is not stayed because: Enforcement of monetary or injunctive relief under § 526 may damage Movant’s [Recovery Law Group’s] professional reputation, business operations, and client relationships. Compliance obligations imposed by the judgment would require immediate operational shutdown causing the Recovery Law Group to be insolvent.
Emergency Motion for Stay, Dkt. No. 252, p. 3-4. Here, however, there is no irreparable harm to Recovery Law Group’s reputation resulting from the enforcement of the Court’s September 17, 2025 Order. Injury to Recovery Law Group’s reputation, if any, has already occurred as a result of Recovery Law Group’s repeated violations of § 526 of the Bankruptcy Code and its gross legal malpractice. Therefore, enforcement of the Court’s September 17, 2025 Order cannot be said to be the “cause” of any reputational harm.
Similarly, the imposition of a prospective ban on soliciting or filing bankruptcy cases in this District does not support a finding of immediate and irreparable harm. The effects of this ban were immediately felt upon entry of this
Court’s September 17, 2025 Order. This Motion was not filed until October 27, 2025, more than five weeks later, thereby undercutting any claim of immediate harm. Moreover, payment of a court-imposed civil penalty does not qualify as irreparable harm. As the Griepentrog court noted, “[t]he key word in this
consideration is irreparable. Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough. The possibility that adequate compensatory or other corrective relief will be available at
a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm.” Griepentrog, 945 F.2d at 154, quoting Sampson v. Murray, 415 U.S. 61, 90 (1974).
Further, the harm must be both certain and immediate, rather than speculative or theoretical, and a movant must provide some evidence to substantiate its claim. Id. Here, Recovery Law Group has not provided any support, whether by affidavit
or otherwise, for its sudden assertion that payment of the civil penalty would render it insolvent which is required in order to substantiate its claim that an irreparable injury is likely to occur. Considering that Recovery Law Group is a large, national firm, still operating in all fifty states,1 a penalty of $392,471 seems unlikely to cause
irreparable harm, a conclusion buttressed by the absence of any support for Recovery Law Group’s unsupported claim.
Factors Three and Four: Because a Stay Pending Appeal Will Potentially Harm Others, the Public Interest Does Not Favor Imposing a Stay Pending Appeal.
The last two factors for consideration, potential harm to others and concern for the public interest, will be considered together.
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Samuel D. Sweet, Chapter 7 Trustee for the Estate of Debtors, John Frederick Shastal Jr. and Kimberly Ann Shastal, and John Frederick Shastal, an individual, and Kimberly Ann Shastal, an individual v. Majors Law, PLLC, a Professional Limited Liability Company, Sheena L. Majors, an individual, Desirae Bedford, an individual and Recovery Law Group, a Professional Corporation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/samuel-d-sweet-chapter-7-trustee-for-the-estate-of-debtors-john-mieb-2025.