In re Seair Transport Services, Inc.

FINDINGS OF FACT AND CONCLUSIONS OF LAW RE: SANCTIONS

A hearing was held on March 25, 1999, on the court’s order to show cause why Mercury Air Group, Inc. (“Mercury”), and its counsel, McBreen, McBreen & Kopko (together with Mercury, “Respondents”), should not be sanctioned under Fed. R.Bankr.P. 9011(b). Brian Hogan, Esq., appeared on behalf of the Respondents. Hilton Ryder, Esq., submitted a declaration and Michael Wilhelm, Esq., appeared on behalf of the Debtor. Patrick Jennings, Esq., of the U.S. Department of Justice, Tax Division, submitted a declaration on behalf of the Internal Revenue Service. This memorandum constitutes the court’s findings of fact and conclusions of law as required by Fed.R.Bankr.P. 7052 and Fed. R.Civ.P. 52. This is a core proceeding as defined in 28 U.S.C. § 157 (b)(2)(A) and (G).

The court issued its order to show cause as a result of Mercury’s motion to modify the automatic stay filed November 13, 1998 and heard December 16, 1998. Mercury sought to modify the automatic stay not on its own behalf but on behalf of the Internal Revenue Service (“IRS”) to allow the IRS to foreclose on its tax hens against the Debtors. Mercury, in its motion, offered to…