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Samuel A. Schwartz, Esq.
Nevada Bar No. 10985
Connor H. Shea, Esq.
Nevada Bar No. 14616
BROWNSTEIN HYATT FARBER SCHRECK, LLP
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
Telephone: (702) 802-2207
Facsimile: (702) 382-8135
Jeffrey L. Cohen, Esq. (admitted pro hac vice)
Gabriel L. Olivera, Esq. (admitted pro hac vice)
LOWENSTEIN SANDLER LLP
1251 Avenue of the Americas
New York, New York 10020
Telephone: (212) 262-6700
Facsimile: (212) 262-7402
Proposed Attorneys for the Debtor
UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEVADA
In re:
BAKKEN RESOURCES, INC.,
Debtor.
Case No.: 18-17254-BTB
Chapter 11
Hearing Date: February 15, 2019
Hearing Time: 10:00 a.m.
DEBTOR’S LIMITED OBJECTION TO THE MOTION FOR RELIEF FROM THE
AUTOMATIC STAY OF JAMES M. HOLMS, PERSONAL REPRESENTATIVE OF THE
ESTATE OF VAL M. HOLMS
Bakken Resources, Inc., the above-captioned debtor and debtor-in-possession (the “Debtor”),
by and through its undersigned counsel, files this limited objection (the “Limited Objection”) to James
M. Holms as Personal Representative of the Estate of Val M. Holms’ (“Estate of Val Holms”) Motion
for Relief from Stay (the “Motion”) [Docket No. 128], as joined by Allan Holms (the “Mr. Holms”)
[Docket No. 133]. In support of this Limited Objection, the Debtor respectfully represents as follows:
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BACKGROUND
1. On December 7, 2018 (the “Petition Date”), the Debtor filed a voluntary petition in this
Court for relief (the “Chapter 11 Case”) under Chapter 11 of Title 11 of the United States Code, 11
U.S.C. §§ 101-1532 (as amended, the “Bankruptcy Code”).
2. The factual background regarding the Debtor, including its business operations and the
events leading to the filing of the Chapter 11 Case, is set forth in detail in the Declaration of Richard
Robbins in Support of Bankruptcy Filing and First Day Motions (the “First Day Declaration”) [Docket
No. 19].
3. On January 11, 2019, the Estate of Val Holms filed its Motion, and on January 14,
2019, Mr. Holms filed his joinder to the Motion.
4. The Estate of Val Holms is currently the subject of probate proceedings in Montana
(the “Montana Probate Action”) entitled In the Matter of the Estate of Val M. Holms, Case No. DP-
16-63, Montana Twentieth Judicial District Court.
5. Additionally, the Debtor is also involved in other legal actions, including the following
three consolidated actions, Graiwer et al. v. Bakken Resources, Inc., Case No. CV 14-0544, Second
Judicial District Court for the County of Washoe, State of Nevada; Val Holms v. Bakken Resources,
Inc., Case No. CV 16-01086, Second Judicial District Court for the County of Washoe, State of
Nevada; Bakken Resources, Inc. v. Allan Holms, et al., Case No. CV 17-00360, Second Judicial
District Court for the County of Washoe, State of Nevada; and cases pending in the State of Montana
and United States District Court for the Southern District of New York, entitled Bakken Resources,
Inc. v. Allan Holms, Val Holms, Todd Jensen, Allan Collins v. Dan Anderson, Karen Midtlyng and
Wes Paul, Case No. DDV-2016-612, Montana First Judicial Court; Bakken Resources, Inc. v.
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Edington et al., Case No. 15-CV-8686, United States District Court for the Southern District of New
York (the “Pending Litigations”). See Docket No. 110, SOFA 7, pp. 32-33.
6. The Estate of Val Holms and Mr. Holms seek relief from the automatic stay in order to
continue all of the Pending Litigations against the Debtor and the Montana Probate Action. However,
the proposed stipulation they seek to enter into is overly broad.
LIMITED OBJECTION
7. Should the Motion be granted, thereby allowing all Pending Litigations and the
Montana Probate Action to continue, the Debtor would simply request that the proposed stipulation be
drafted in a more succinct and direct fashion.
8. Counsel for the Estate of Val Holms proposed entering into a stipulation regarding the
effect of the automatic stay on the resolution of the dispute as to ownership of the Debtor’s stock. See
attached Exhibit A. Such proposed stipulation contains unnecessary factual and legal assertions. See
attached Exhibit B.
9. The Debtor consents to the simplified stipulation attached as Exhibit C. A redline to
the Estate of Val Holms’ original proposed stipulation is attached as Exhibit D.
10. Therefore, while the Debtor does not oppose to the Estate of Val Holms’ Motion, as
joined by Mr. Holms, it does object to it on a limited basis, because of the proposed stipulation’s broad
language.
RESERVATION OF RIGHTS
11. Nothing in this Limited Objection constitutes, or shall be deemed to constitute, a waiver
of any rights or defenses of the Debtor or any other party with respect to the relief sought by the Estate
of Val Holms in the Motion (as joined by Mr. Holms), the Montana Probate Action and the Pending
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Litigations (should the Stay Relief Motion be granted), or any other claim or cause of action asserted
by the Estate of Val Holms and Mr. Holms.
NOTICE
12. No trustee, examiner, or creditors’ committee has been appointed in the Chapter 11
Case. The Debtor provided notice of this Motion to: (a) the Office of the United States Trustee; (b)
certain governmental agencies including the Internal Revenue Service, the Clark County Assessor, the
Clark County Treasurer, the United States Securities and Exchange Commission, and the Nevada
Department of Taxation; (c) the entities listed on the consolidated list of twenty (20) largest creditors
filed by the Debtor in this chapter 11 case at the addresses indicated thereon; (d) the Estate of Val
Holms; and (e) Mr. Holms. In light of the nature of the relief requested, the Debtor respectfully
submits that no further notice is required.
CONCLUSION
WHEREFORE, for the foregoing reasons, the Debtor respectfully requests the Court (i) deny
the Motion; and (ii) grant such other and further relief as the Court deems just and proper.
[Remainder of page intentionally left blank.]
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Dated this 4th
day of February, 2019.
By: /s/Samuel A. Schwartz
Samuel A. Schwartz, Esq.
Nevada Bar No. 10985
Connor H. Shea, Esq.
Nevada Bar No. 14616
BROWNSTEIN HYATT FARBER SCHRECK, LLP
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
Telephone: (702) 802-2207
Facsimile: (702) 382-8135
Jeffrey Cohen, Esq. (admitted pro hac vice)
Gabriel L. Olivera, Esq. (admitted pro hac vice)
LOWENSTEIN SANDLER LLP
1251 Avenue of the Americas
New York, New York 10020
Telephone: (212) 262-6700
Facsimile: (212) 262-7402
Proposed Attorneys for the Debtor
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EXHIBIT A
EXHIBIT A
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Olivera, Gabriel L.
From: Cecilia Lee <[email protected]>Sent: Friday, January 11, 2019 7:50 PMTo: Schwartz, Samuel A.; Cohen, Jeffrey; Olivera, Gabriel L.Cc: [email protected]; Amy Tirre; Elizabeth High; Elizabeth DendarySubject: Stipulation regarding effect of automatic stayAttachments: Stipulation for Stay Relief.Order.docx; Stipulation for Stay Relief..docx
FilingDate: 1/15/2019 8:56:00 PM
Counsel – Pursuant to my letter dated January 7, 2019 and Sam’s email dated January 9, 2019, I have attached a copy of a proposed Stipulation regarding the effect of the automatic stay on the resolution of the dispute as to ownership of the stock in the Debtor and a proposed order, for your review and comment. As I will be out of the country beginning on
January 14, 2019, please communicate in my absence directly with my partner, Elizabeth High, and my paralegal, Elizabeth Dendary, with any comments or suggested changes. I will not be answering emails sent to this email address during my absence. Out of an abundance of caution, I am also filing this afternoon a motion for the relief set forth in the stipulation and am setting it for hearing on February 15, 2019. I look forward to being in contact when I return on February 4, 2019.
Best regards, Cecilia Cecilia Lee, Esq. Lee High, Ltd. 448 Ridge Street Reno, Nevada 89501 Telephone: 775‐324‐1011 Fax: 775‐499‐5976 Email: c.lee@lee‐high.com
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EXHIBIT B
EXHIBIT B
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LEE HIGH, LTD.
Cecilia Lee, Esq.
Nevada Bar No. 3344
Elizabeth High, Esq.
Nevada Bar No. 10082
448 Ridge Street
Reno, Nevada 89501
Telephone: 775.324.1011
Email: [email protected]
Email: [email protected] Attorneys for James M. Holms, Personal Representative
of the Estate of Val M. Holms
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEVADA
In re:
BAKKEN RESOURCES, INC.,
Debtor.
Case No.: 18-17254-BTB
Chapter 11 Case
STIPULATION THAT AUTOMATIC
STAY DOES NOT APPLY TO OR
ENJOIN RESOLUTION OF STOCK
OWNERSHIP
(NO HEARING REQUIRED)
Bakken Resources, Inc., debtor and debtor-in-possession (the “Debtor”), by and through
its counsel, Samuel A. Schwartz, Esq., Brownstein Hyatt Farber Schreck, LLP, and Jeffrey L.
Cohen, Esq. and Gabriel L. Olivera, Esq., Lowenstein Sandler LLP, and James M. Holms,
Personal Representative of the Estate of Val M. Holms (“Mr. Holms”), by and through his
attorneys, Cecilia Lee, Esq. and Elizabeth High, Esq., LEE HIGH, LTD., hereby stipulate as
follows:
1. Debtor commenced the above-captioned case by filing its voluntary petition under
Chapter 11 of Title 11 of the United States Code on December 7, 2018. Docket No. 1.
2. Debtor disclosed legal actions and proceedings in which it was involved in the
one year before filing the petition, including the following three consolidated actions, Graiwer et
al. v. Bakken Resources, Inc., Case No. CV 14-0544, Second Judicial District Court for the
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County of Washoe, State of Nevada; Val Holms v. Bakken Resources, Inc., Case No. CV 16-
01086, Second Judicial District Court for the County of Washoe, State of Nevada; Bakken
Resources, Inc. v. Allan Holms, et al., Case No. CV 17-00360, Second Judicial District Court for
the County of Washoe, State of Nevada; and cases pending in the State of Montana and United
States District Court for the Southern District of New York, entitled Bakken Resources, Inc. v.
Allan Holms, Val Holms, Todd Jensen, Allan Collins v. Dan Anderson, Karen Midtlyng and
Wes Paul, Case No. DDV-2016-612, Montana First Judicial Court; Bakken Resources, Inc. v.
Edington et al., Case No. 15-CV-8686, United States District Court for the Southern District of
New York; and In the Matter of the Estate of Val M. Holms, Case No. DP-16-63, Montana
Twentieth Judicial District Court (the “Pending Litigations”). Docket No. 110, SOFA 7, pp. 32-
33.
3. In an Amended Order After Hearing entered on October 22, 2018 in the Second
Judicial District Court of the State of Nevada, in and for the County of Washoe in Case No.
CV14-00544 entitled Graiwer et al. v. Val Holms, et. al., Judge Hardy held that the Debtor
[has no] standing to seek injunctive relief with regard to any
dispute between Allan Holms or the Estate of Val Holms related to
ownership of BRI stock.
Because BRI lacks standing to seek judicial relief related to any
ownership dispute related to BRI stock, BRI will not be permitted
to be involved in any potential ownership dispute as proxy for the
Estate of Val Holms. It should not be involved in the dispute
between potential claimants to [the Holms Estate stock in the
Debtor].
A copy of the Amended Order After Hearing is attached as Exhibit B to the Declaration of Frank
C. Gilmore, Esq., in Support of Allan G. Holms’s Opposition to Debtor’s Motion for Entry of an
Order Approving Notification and Hearing Procedures for Certain Transfers of and Declarations
of Worthlessness With Respect to Common Stock, Docket No. 62, pp. 18-25.
4. In the Amended Order After Hearing, Judge Hardy acknowledged Debtor’s
concession that “BRI has no claim to right, title, nor interest in Val Holms’ stock,” and that the
only two potential claimants to the Stock are the Estate of Val Holms [] and Allan Holms.” Id.
5. The automatic stay in bankruptcy, codified in 11 U.S.C. §362(a), “protects only
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the debtor, property of the debtor or property of the estate” and “does not protect non-debtor
parties or their property.” In re Advanced Ribbons & Office Prods., Inc., 125 B.R. 259, 263
(B.A.P. 9th Cir. 1991) (citing In re Casgul of Nevada, Inc., 22 Bankr. 65, 66 (B.A.P. 9th Cir.
1982)).
6. The Ninth Circuit has also held that the automatic stay does not protect actions
against non-debtor entities or individuals who are separately liable for the debts of the debtor,
such as guarantors or sureties, “nor does it protect the property of parties such as officers of the
debtor, even if the property in question is stock in the debtor corporation, and even if that stock
has been pledged as security for the debtor’s liability.” Boucher v. Shaw, 572 F.3d 1087, 1092-
93 (9th Cir. 2009) (citing In re Advanced Ribbons, 125 B.R. at 263). See also In re Marvel
Entm’t Grp., 209 B.R. 832, 834 (D. Del. 1997) (holding that “the automatic stay provisions of
the Bankruptcy Code are not implicated by the exercise of shareholders’ corporate governance
rights.”).
7. Resolution of any dispute regarding ownership of stock in the Debtor, whether in
the Pending Litigations, other litigation or by other means, process or proceeding, involves
property that is not property of the estate and is not enjoined, protected or affected by the
automatic stay in bankruptcy.
8. The parties hereby stipulate to request an order from the Bankruptcy Court
approving this Stipulation and ordering that the automatic stay does not apply to, enjoin, protect
or affect in any way any action to resolve ownership of stock in the Debtor, including without
limitation, any such action taken in the Pending Litigations, in any other litigation or by any
other means, process or proceeding.
DATED this _____ day of January, 2019.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
_________________________
SAMUEL A. SCHWARTZ, ESQ.
Nevada State Bar No. 10985
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
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DATED this 11th
day of January, 2019.
LEE HIGH, LTD.
/s/ Cecilia Lee, Esq.
CECILIA LEE, ESQ.
ELIZABETH HIGH, ESQ.
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EXHIBIT C
EXHIBIT C
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LEE HIGH, LTD.
Cecilia Lee, Esq.
Nevada Bar No. 3344
Elizabeth High, Esq.
Nevada Bar No. 10082
448 Ridge Street
Reno, Nevada 89501
Telephone: 775.324.1011
Email: [email protected]
Email: [email protected] Attorneys for James M. Holms, Personal Representative
of the Estate of Val M. Holms
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEVADA
In re:
BAKKEN RESOURCES, INC.,
Debtor.
Case No.: 18-17254-BTB
Chapter 11 Case
STIPULATION THAT AUTOMATIC
STAY DOES NOT APPLY TO OR
ENJOIN RESOLUTION OF STOCK
OWNERSHIP
(NO HEARING REQUIRED)
Bakken Resources, Inc., debtor and debtor-in-possession (the “Debtor”), by and through
its counsel, Samuel A. Schwartz, Esq., Brownstein Hyatt Farber Schreck, LLP, and Jeffrey L.
Cohen, Esq. and Gabriel L. Olivera, Esq., Lowenstein Sandler LLP, and James M. Holms,
Personal Representative of the Estate of Val M. Holms (“Mr. Holms”), by and through his
attorneys, Cecilia Lee, Esq. and Elizabeth High, Esq., LEE HIGH, LTD., hereby stipulate as
follows:
1. Debtor commenced the above-captioned case by filing its voluntary petition under
Chapter 11 of Title 11 of the United States Code on December 7, 2018. Docket No. 1.
2. Debtor disclosed legal actions and proceedings in which it was involved in the
one year before filing the petition, including the following three consolidated actions, Graiwer et
al. v. Bakken Resources, Inc., Case No. CV 14-0544, Second Judicial District Court for the
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County of Washoe, State of Nevada; Val Holms v. Bakken Resources, Inc., Case No. CV 16-
01086, Second Judicial District Court for the County of Washoe, State of Nevada; Bakken
Resources, Inc. v. Allan Holms, et al., Case No. CV 17-00360, Second Judicial District Court for
the County of Washoe, State of Nevada; and cases pending in the State of Montana and United
States District Court for the Southern District of New York, entitled Bakken Resources, Inc. v.
Allan Holms, Val Holms, Todd Jensen, Allan Collins v. Dan Anderson, Karen Midtlyng and
Wes Paul, Case No. DDV-2016-612, Montana First Judicial Court; Bakken Resources, Inc. v.
Edington et al., Case No. 15-CV-8686, United States District Court for the Southern District of
New York; and In the Matter of the Estate of Val M. Holms, Case No. DP-16-63, Montana
Twentieth Judicial District Court (the “Pending Litigations”). Docket No. 110, SOFA 7, pp. 32-
33.
3. Resolution of any dispute regarding ownership of stock in the Debtor, whether in
the Pending Litigations, other litigation or by other means, process or proceeding, involves
property that is not property of the estate and is not enjoined, protected or affected by the
automatic stay in bankruptcy.
4. The parties hereby stipulate to request an order from the Bankruptcy Court
approving this Stipulation and ordering that the automatic stay does not apply to, enjoin, protect
or affect in any way any action to resolve ownership of stock in the Debtor, including without
limitation, any such action taken in the Pending Litigations.
DATED this _____ day of February, 2019.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
_________________________
SAMUEL A. SCHWARTZ, ESQ.
Nevada State Bar No. 10985
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
DATED this _____ day of February, 2019.
LEE HIGH, LTD.
/s/ Cecilia Lee, Esq.
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CECILIA LEE, ESQ.
ELIZABETH HIGH, ESQ.
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EXHIBIT D
EXHIBIT D
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Bakken Resources, Inc., debtor and debtor-in-possession (the “Debtor”), by and through
its counsel, Samuel A. Schwartz, Esq., Brownstein Hyatt Farber Schreck, LLP, and Jeffrey L.
Cohen, Esq. and Gabriel L. Olivera, Esq., Lowenstein Sandler LLP, and James M. Holms,
Personal Representative of the Estate of Val M. Holms (“Mr. Holms”), by and through his
attorneys, Cecilia Lee, Esq. and Elizabeth High, Esq., LEE HIGH, LTD., hereby stipulate as follows:
Debtor commenced the above-captioned case by filing its voluntary petition under1.
Chapter 11 of Title 11 of the United States Code on December 7, 2018. Docket No. 1.
Debtor disclosed legal actions and proceedings in which it was involved in the one2.
year before filing the petition, including the following three consolidated actions, Graiwer et al. v.
Bakken Resources, Inc., Case No. CV 14-0544, Second Judicial District Court for the County of
Washoe, State of Nevada; Val Holms v. Bakken Resources, Inc., Case No. CV 16-01086, Second
In re:
BAKKEN RESOURCES, INC.,
Debtor.
Case No.: 18-17254-BTB
Chapter 11 Case
STIPULATION THAT AUTOMATIC
STAY DOES NOT APPLY TO OR
ENJOIN RESOLUTION OF STOCK
OWNERSHIP
(NO HEARING REQUIRED)
LEE HIGH, LTD.
Cecilia Lee, Esq.
Nevada Bar No. 3344
Elizabeth High, Esq.
Nevada Bar No. 10082
448 Ridge Street
Reno, Nevada 89501
Telephone: 775.324.1011
Email: [email protected]
Email: [email protected]
Attorneys for James M. Holms, Personal Representative
of the Estate of Val M. Holms
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF NEVADA
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Judicial District Court for the County of Washoe, State of Nevada; Bakken Resources, Inc. v.
Allan Holms, et al., Case No. CV 17-00360, Second Judicial District Court for the County of
Washoe, State of Nevada; and cases pending in the State of Montana and United States District
Court for the Southern District of New York, entitled Bakken Resources, Inc. v. Allan Holms,
Val Holms, Todd Jensen, Allan Collins v. Dan Anderson, Karen Midtlyng and Wes Paul, Case
No. DDV-2016-612, Montana First Judicial Court; Bakken Resources, Inc. v. Edington et al.,
Case No. 15-CV-8686, United States District Court for the Southern District of New York; and
In the Matter of the Estate of Val M. Holms, Case No. DP-16-63, Montana Twentieth Judicial
District Court (the “Pending Litigations”). Docket No. 110, SOFA 7, pp. 32-33.
3. In an Amended Order After Hearing entered on October 22, 2018 in the Second Judicial
District Court of the State of Nevada, in and for the County of Washoe in Case No. CV14-00544
entitled Graiwer et al. v. Val Holms, et. al., Judge Hardy held that the Debtor
[has no] standing to seek injunctive relief with regard to any
dispute between Allan Holms or the Estate of Val Holms related to
ownership of BRI stock.
Because BRI lacks standing to seek judicial relief related to any
ownership dispute related to BRI stock, BRI will not be permitted
to be involved in any potential ownership dispute as proxy for the
Estate of Val Holms. It should not be involved in the dispute
between potential claimants to [the Holms Estate stock in the
Debtor].
A copy of the Amended Order After Hearing is attached as Exhibit B to the Declaration of Frank
C. Gilmore, Esq., in Support of Allan G. Holms’s Opposition to Debtor’s Motion for Entry of an
Order Approving Notification and Hearing Procedures for Certain Transfers of and Declarations
of Worthlessness With Respect to Common Stock, Docket No. 62, pp. 18-25.
4. In the Amended Order After Hearing, Judge Hardy acknowledged Debtor’s concession
that “BRI has no claim to right, title, nor interest in Val Holms’ stock,” and that the only two
potential claimants to the Stock are the Estate of Val Holms [] and Allan Holms.” Id.
5. The automatic stay in bankruptcy, codified in 11 U.S.C. §362(a), “protects only the
debtor, property of the debtor or property of the estate” and “does not protect non-debtor parties
or their property.” In re Advanced Ribbons & Office Prods., Inc., 125 B.R. 259, 263 (B.A.P. 9th
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Cir. 1991) (citing In re Casgul of Nevada, Inc., 22 Bankr. 65, 66 (B.A.P. 9th Cir. 1982)).
6. The Ninth Circuit has also held that the automatic stay does not protect actions against
non-debtor entities or individuals who are separately liable for the debts of the debtor, such as
guarantors or sureties, “nor does it protect the property of parties such as officers of the debtor,
even if the property in question is stock in the debtor corporation, and even if that stock has been
pledged as security for the debtor’s liability.” Boucher v. Shaw, 572 F.3d 1087, 1092-93 (9th Cir.
2009) (citing In re Advanced Ribbons, 125 B.R. at 263). See also In re Marvel Entm’t Grp., 209
B.R. 832, 834 (D. Del. 1997) (holding that “the automatic stay provisions of the Bankruptcy
Code are not implicated by the exercise of shareholders’ corporate governance rights.”).
7. Resolution of any dispute regarding ownership of stock in the Debtor, whether3.
in the Pending Litigations, other litigation or by other means, process or proceeding, involves
property that is not property of the estate and is not enjoined, protected or affected by the
automatic stay in bankruptcy.
8. The parties hereby stipulate to request an order from the Bankruptcy Court4.
approving this Stipulation and ordering that the automatic stay does not apply to, enjoin, protect
or affect in any way any action to resolve ownership of stock in the Debtor, including without
limitation, any such action taken in the Pending Litigations, in any other litigation or by any other
means, process or proceeding.
DATED this _____ day of JanuaryFebruary, 2019.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
_________________________
SAMUEL A. SCHWARTZ, ESQ.
Nevada State Bar No. 10985
100 North City Parkway, Suite 1600
Las Vegas, Nevada 89106
DATED this 11th_____ day of JanuaryFebruary, 2019.
LEE HIGH, LTD.
/s/ Cecilia Lee, Esq.
CECILIA LEE, ESQ.
ELIZABETH HIGH, ESQ.
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