Ebell Media, Inc. v. Reaty Corp. (In Re Ebell Media Inc.)

MEMORANDUM

Ebell Media, Inc., (“Ebell”) and Sun C. Chen (“Chen”), its counsel, appeal from the final judgment of the district court affirming on appeal the decision of the bankruptcy court terminating the automatic stay and awarding sanctions to Reaty Corporation (“Reaty”).

We review the decision of a district court on appeal from a decision of the bankruptcy court de novo, without deference to the district court’s decision. Hale v. United States Tr., 509 F.3d 1139, 1145 (9th Cir.2007). The decision of a bankruptcy court to grant or deny relief from the automatic stay is reviewed for an abuse of discretion. Gruntz v. County of Los Angeles (In re Gruntz), 202 F.3d 1074 , 1084 n. 9 (9th Cir.2000) (en banc). Likewise, a bankruptcy court’s award of sanctions is also reviewed for an abuse of discretion. Hale, 509 F.3d at 1146 .

A dispute arose between Reaty and Ebell concerning performance under a contract between them. Reaty initiated arbitration proceedings in accordance with the arbitration provision in the contract. When the arbiter informed the parties she was prepared to enter an award, Ebell filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code.

“[B]ad…