CREDIT ALLIANCE CORP. V. WILLIAMS
851 F.2d 119 (1988)
NATURE OF THE CASE: Williams (D) appealed an order, which held that the automatic stay provisions of 11 U.S.C.S. 362 stayed proceedings against the debtor only and that no such relief was available to D, the guarantor.
FACTS: Penn signed a three year conditional sales contract note with Croushorn Equipment who assigned the note to Credit (P). D executed a guaranty of Penn Hook's obligation in favor of P. Penn defaulted on its obligation. P filed suit against Penn Hook and D. Penn petitioned for bankruptcy under Chapter 11. The Southern District of New York entered a default judgment in the amount of $62,866.70 against the three defendants. P instituted garnishment proceedings and the matter was referred to the bankruptcy court which held that the automatic stay provision of the Bankruptcy Code, 11 U.S.C. 362, rendered void the default judgment against Penn and the non-debtor guarantors, entered after Penn Hook petitioned for bankruptcy. The district court reversed the decision of the bankruptcy court with respect to the guarantors, and held that P's claim against D was not stayed or void. D appealed.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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