TW Telecom Holdings Inc. v. Carolina Internet Ltd., No. 11-1068 (10th Cir. 2011)Annotate this Case
Carolina Internet Ltd. appealed the entry of default judgment against it in favor of TW Telecom Holdings Inc. for more than three million dollars. During the pendency of this appeal, Carolina Internet filed a voluntary Chapter 11 bankruptcy petition. The Tenth Circuit had previously interpreted the automatic stay provisions in section 362 of the Bankruptcy Code as not preventing a Chapter 11 debtor-in-possession (like Carolina Internet) from pursuing an appeal even f it was an appeal from a creditor's judgment against the debtor. Nine other circuit courts disagreed with the Tenth Circuit's interpretation, holding that a bankruptcy filing automatically stays all proceedings, even appellate proceedings where the debtor has filed an appeal from a judgment entered in a suit against the debtor. The Court overruled its prior interpretation of the automatic stay provisions in the Bankruptcy Code, which prevented it from proceeding with Carolina Internet's appeal of the default judgment against it. This case was stayed pending bankruptcy court proceedings.