ORDER

Park West Real Estate Corporation has filed a motion for relief from the automatic stay, seeking a nunc pro tunc order which would validate actions taken by the corporation’s board of directors. The Chapter 11 trustee, the debtor, and the Official Creditors Committee oppose the relief requested.

This Court has jurisdiction pursuant to 28 U.S.C. § 1334 and General Order No. 312-D of the United States District Court for the Southern District of California. This is a core proceeding under 28 U.S.C. § 157 (b)(2)(G).

Debtor Richard Calvert was a fifty percent shareholder in Park West Real Estate Corporation, and the other fifty percent was owned by Gilbert Klecan. Because of disagreements between the two as directors of the corporation, they resorted to state court for appointment of a provisional director, which was accomplished. The foregoing occurred approximately four years before Mr. Calvert filed his petition in bankruptcy on February 6, 1990. (The trustee, Mr. Kipperman, was appointed on or about October 19, 1990).

On or about July 3,1991 Park West gave notice of a special meeting of the board to Mr. Calvert. The meeting was held on July 8, 1991, but Mr. Calvert did not attend or otherwise participate. At the meeting, Mr. Klecan and the provisional director authorized the corporation to issue additional shares of stock to Mr. Klecan in satisfaction of debt owed by the corporation to Mr. Klecan. The net effect of the equity-for-debt exchange was to increase Mr. Kle-can’s percent of ownership of Park West Corporation, and correspondingly reduce the percent of ownership represented by the number of shares held now by the Chapter 11 trustee.

The next step for Park West was to file a motion in state court for removal of the provisional director on the ground that a provisional director was no longer necessary since Klecan was now the majority shareholder and the basis of the stalemate no longer existed. Section 308 of the California Corporations Code provides in relevant part:

The instant dispute was brought to the fore by a letter from trustee’s counsel to Park West stating the trustee’s view that the state court proceeding to terminate the appointment of the provisional director violated the automatic stay. In addition, the trustee asserted that the issuance of the additional shares to Klecan to satisfy debt might also violate the stay. Park West believes the stay is not implicated by either action, but out “of an abundance of caution” seeks relief from the stay if relief is required.

Park West Corporation acknowledges that the trustee succeeded to the debtor’s status as a shareholder of the corporation. There has been no suggestion, however, that the trustee also took Calvert’s place as a director of the corporation. Thus, the basic issue is whether the intangible rights and obligations of stock ownership, which are property of a debtor’s estate, are sufficiently broad to preclude a non-debtor corporation from taking actions which may have an effect on the value of that stock. Park West analogizes to a debtor who owns a few shares of IBM stock and points out the difficulties of sustaining the argument that IBM had to obtain relief from stay in every case in which one or more shares was property of debtors’ estates before the corporation could take any action.

The trustee, debtor, and OCC, on the other hand, focus on the instant situation where the debtor was an equal shareholder. They point to the devaluation of the shares which may result by virtue of having been relegated to minority status. Certainly, in the sale of many stocks a premium is paid for a controlling or equal interest, as distinct from minority interest, particularly because of the associated power to control or help shape the future course of business affairs. The trustee argues, in effect, that that intangible power derived from fifty percent ownership is itself property of the debtor’s estate subject to the automatic stay.

It is certainly a truism that the definition of property of the estate under 11 U.S.C. § 541 is very broad, and the trustee’s argument has an appeal precisely because of what has occurred in the instant case. The only authority cited by either side is the decision in In re Apex Oil Co., 91 B.R. 865 (Bankr.E.D.Mo.1988). In that case, Clark Oil and Refining, as a debtor, filed adversary proceedings to enjoin two non-debtor companies in which Clark owned 22% and 36%, respectively, from accelerating certain promissory notes. The adversary proceedings were brought pursuant to 11 U.S.C. § 105 , and one argument advanced was that the automatic stay operated to bar the act sought to be enjoined. The Bankruptcy Court rejected the argument to extend the stay to the activities of those non-debtor corporations, and also rejected relief under § 105.

The Court’s research has uncovered several other cases with relevant discussion. In re Peoples Bankshares, Ltd,., 68 B.R. 536 (Bankr.N.D. Iowa 1986) involved a debtor in Chapter 11 which was a bank holding company. Its principal assets were five state-chartered subsidiary banks. The debtor commenced an adversary proceeding against the state Superintendent of Banking for declaratory relief that the automatic stay barred acts by the Superintendent which could affect the value of the debtor’s stock in the five banks, or for injunctive relief under § 105. The court’s analysis of the § 362 issue can be extracted as follows:

68 B.R. at 539 . The court thus concluded that none of the provisions of § 362(a) operated to bar action of the Superintendent of Banking with respect to the five subsidiary banks, even though that action might have an adverse effect on the value of the debtor’s shares in each of the banks.

In Re Venture Properties, Inc., 37 B.R. 175 (Bankr.D.N.H.1984) involved a corporate debtor which filed Chapter 11. That corporate debtor filed an adversary to enjoin third parties from taking certain action regarding the sale of property. In fact, the rights to purchase the property had been assigned not to the debtor, but to a partnership of which the debtor was the general partner. The partnership was not itself a debtor in bankruptcy. Upon establishing that it was the partnership which held the rights, not the debtor, the court stated:

37 B.R. at 176 . The court later offered in rejecting a request for an injunction under § 105:

37 B.R. at 177 .

In re Loughnane, 28 B.R. 940 (Bankr.D.Colo.1983) involved a bankruptcy petition by an individual debtor under Chapter 13. The debtor owned 100% of the shares of a corporation. The corporation fell in arrears on its obligations to the IRS and the IRS levied on the corporation’s bank account. The debtor brought an action to hold the IRS in contempt for violating the automatic stay. The court stated:

28 B.R. at 942 .

This Court agrees with the rationale of the foregoing cases. Park West Real Estate Corporation is a separate legal entity and there has been no suggestion that it is a sham corporation or that it is the alter ego of the debtor. Indeed, the few facts before the Court suggest the contrary. While the trustee’s argument has appeal in circumstances like the present, this Court has not found any satisfactory way to draw a meaningful line separating the circumstances and incidences of stock ownership which would implicate the automatic stay from those that would not. In this Court’s view, the better rule is that Park West is a separate legal entity entitled to act through its duly constituted board and officers, even though those actions may have an effect on the value of shares of stock held by the estates of debtors. Accordingly, this Court concludes that the automatic stay does not apply to actions of the board of the corporation in determining to exchange debt for equity with another shareholder, thereby giving that shareholder a majority interest in the corporation.

Park West has also requested relief from stay to proceed with its state court application to remove the provisional director. Park West acknowledges that debtor is “technically named as a defendant in the proceeding,” but argues that debtor is only a nominal defendant and not essential to the action. The debtor has not responded to this portion of the motion.

Subsection (a)(1) of section 362, Title 11, United States Code, provides that the filing of a bankruptcy petition:

In support of its assertion that commencement or continuation of an action in which the debtor is a nominal defendant is not violative of the automatic stay, Park West cites two cases. The first, Price & Pierce Intern. v. Spicers Intern. Paper, 50 B.R. 25 (S.D.N.Y.1985), is a terse district court decision in an interpleader action. The funds were deposited with the court and it remained for the court to determine which of two competing claimants was entitled to the funds. Then one of the claimants filed bankruptcy and asserted that the inter-pleader proceedings were stayed. The district court recognized:

50 B.R. at 26 . The district court then proceeded to ignore at least part of the underlying rationale supporting the quoted policy. Instead, the court rationalized:

Id. For multiple reasons, this Court is persuaded that the foregoing case was wrongly decided. First, it appears that the district court arbitrarily casts the debtor as really a plaintiff, when in fact the action was commenced against two parties as defendants, both of them claiming a right or interest in the funds. Second, the court made no analysis under § 541, instead assuming that until it decided which party was entitled to the funds the estate had no interest in any claim to the funds. Third, the court ignored one of the elemental concerns represented by § 362(a)(1), that is, that because the debtor was insolvent it was unable to adequately defend its claim to the funds in a separate forum and that a valuable asset of the estate might thereby be lost.

The second case cited by Park West, Walters v. First Tennessee Bank, N.A. Memphis, 855 F.2d 267 (6th Cir.1988), contains only dicta as to this issue, relying on the Price & Pierce decision discussed above. Moreover, the case was factually very different. Walters was a 50% shareholder in Ten Tex corporation. He arranged loans for himself and for the corporation with the bank. He subsequently filed a shareholder’s derivative action against the bank claiming that the terms of the loan to the corporation were usurious. The corporation had in the meantime filed bankruptcy. The trial court dismissed the derivative usury claim because of the statute of limitations. On appeal, Walters argued that the statute of limitations was tolled by the corporation’s bankruptcy because the derivative action theoretically could not have been commenced during the corporation’s bankruptcy since it had been named a party defendant in the derivative action. The court explained:

855 F.2d at 270-271 .

Neither case cited by Park West is persuasive to this Court for the proposition asserted. However, this Court need not decide whether a proceeding brought in part against a debtor can avoid the automatic stay of § 362(a)(1) if the debtor is only a “nominal” defendant. In the instant case, Park West has failed to persuade this Court that the debtor is only a nominal defendant. The few facts set out in the moving papers indicate that Klecan and the debtor were each fifty percent shareholders in Park West. Each was also a director of Park West. Because of their inability to agree, as directors, on matters affecting the corporation, appointment of a provisional director was obtained. So far as the record indicates, debtor is still a director of Park West. The debtor presumably has an interest in being able to persuade a neutral third director of the appropriateness of a particular course for the corporation. The Court notes that under § 308(a) of the California Corporations Code the debtor or trustee would be eligible to seek appointment of a provisional director. In pertinent part, the subsection provides: “Action for such appointment may be brought by any director or by the holders of not less than 33-V3 percent of the voting power.” In this Court’s view, Park West has failed to establish its threshold premise, that debtor is only a “nominal” defendant in the state court proceeding. Based on the limited record developed in the motion, this Court concludes that the automatic stay applies to the state court proceeding in which debtor is a named defendant.

As already noted, Park West has requested relief styled as nunc pro tunc to authorize the state court proceedings which have already occurred post-petition and to allow their continuation. Rule 4001, Federal Rules of Bankruptcy Procedure, was amended effective August 1, 1991 to require service of relief from stay motions on either the twenty largest unsecured creditors of an estate or on the duly constituted creditors’ committee. Rule 4001(d) as amended, provides in relevant part:

Review of the certificate of service filed by Park West indicates no such service was made by Park West. The motion is therefore procedurally defective as one for relief from the automatic stay, and the motion is, accordingly, denied without prejudice.

IT IS SO ORDERED.