Paczkowski v. Garven, No. 19-6029 (8th Cir. 2020)Annotate this Case
The Garvens contracted with Debtor and DRMP for home repairs and improvements. Unhappy with the results, the Garvens sued Debtor and DRMP in state court and obtained a default judgment against them. At the Garvens' request, the sheriff levied a writ of execution on Debtor's ownership interest in DRMP and scheduled an execution sale. At the execution sale, the Garvens purchased Debtor's ownership interest and became the sole owners of DRMP. Upon learning of the execution sale, Debtor allegedly began withdrawing assets from DRMP and transferring them to a different entity. Debtor then filed a chapter 7 bankruptcy petition. The bankruptcy court lifted the automatic stay to allow the Garvens and DRMP to commence a state court action against Debtor and related third parties to avoid the allegedly fraudulent transfers. The Eighth Circuit Bankruptcy Appellate Panel dismissed an appeal. The Garvens and DRMP filed their motion for relief from the automatic stay on June 5, 2019. The bankruptcy court rendered its final decision on September 19, 2019, more than 60 days after the motion was filed. The 60-day period was not extended, so the automatic stay was terminated by operation of law on August 5, 2019, rendering the order lifting the stay superfluous.