United States District Court, D. Nebraska
MEMORANDUM AND ORDER
M. GERRARD, CHIEF UNITED STATES DISTRICT JUDGE
matter is before the Court on Infogroup's motion to
reconsider (filing 499) asking the Court to revise several
aspects of its September 12, 2018 Order (filing 491) granting
DatabaseUSA's motion (filing 483) to stay execution of
the judgment without posting bond. More specifically,
Infogroup argues that the Court erred in two ways: (1) by not
requiring DatabaseUSA to post bond, and (2) not requiring
DatabaseUSA to preserve banking, tax and financial records,
and refrain from transferring assets outside of the ordinary
course of business. See filing 499 at 2.
before reaching the merits of those arguments, the Court must
first address the contention underlying much of
Infogroup's motion to reconsider: the Court's
purported "deci[sion] to go against the weight of
authority and grant an unbonded stay while also not allowing
Infogroup an opportunity to respond." Filing 499 at 5.
To be clear, DatabaseUSA's motion to stay execution of
the judgment was, in essence, a motion to extend the
automatic stay that expired on September 12, 2018.
See Fed. R. Civ. P. 62(a). And despite
Infogroup's protestations, it can't be surprising to
Infogroup that the Court would resolve that motion before it
became moot. Nor has Infogroup explained how, if at all, the
Court's stay pending post-trial motions has actually
caused any harm to Infogroup--particularly given the fact
that Infogroup can come back and ask the Court to lift the
stay or provide security as it has now done.
said, the Court finds Infogroup's first argument, that
the Court erred by not requiring DatabaseUSA or Mr. Gupta to
post bond, unpersuasive. Generally speaking, no bond or a
reduced bond is sufficient when the creditor's interest
(i.e., Infogroup's interest), due to unusual
circumstances, would not be unduly endangered. Id.
Courts may consider a variety of factors in determining
whether to waive a supersedeas bond:
(1) the complexity of the collection process; (2) the amount
of time required to obtain a judgment after it is affirmed on
appeal; (3) the degree of confidence that the district court
has in the availability of funds to pay the judgment; (4)
whether the defendant's ability to pay the judgment is so
plain that the cost of a bond would be a waste of money; and
(5) whether the defendant is in such a precarious financial
situation that the requirement to post a bond would place
other creditors of the defendant in an insecure position.
Dillon v. City of Chicago, 866 F.2d 902, 904-5 (7th
Cir. 1988); see also Arban v. W. Pub.
Corp., 345 F.3d 390, 409 (6th Cir. 2003); Olympia
Equip. Leasing Co. v. Western Union Tel. Co., 786 F.2d
794, 796 (7th Cir. 1986);
DatabaseUSA presented a strong case in favor of staying the
execution of the judgment without requiring bond. DatabaseUSA
submitted affidavits--which Infogroup did not, and does not,
dispute--evincing the two reasons why bond should be waived.
First, Vinod Gupta submitted an affidavit declaring his
ability to withstand the $10, 000, 000.00 judgment against
him. Filing 485-1 at 2-3. And as Infogroup is well aware,
Gupta is able to satisfy that judgment. Second,
DatabaseUSA's CEO, Fred Vakili, submitted an affidavit
demonstrating that DatabaseUSA is in such a precarious
financial situation that requiring DatabaseUSA to post bond
would leave DatabaseUSA with "no assets left to pay any
part of the Infogroup judgment" because DatabaseUSA will
be forced to file Chapter 11 Bankruptcy. Filing 485-2 at 1-3.
And while there appears to be a significant amount of
distrust among the parties, Infogroup has failed to provide
the Court with any, much less significant, evidence as to why
that is not actually true.
Infogroup makes a general attack on the sufficiency of the
affidavits submitted by DatabaseUSA by claiming they are
unsupported by any "documentation [or]
information." Filing 499 at 7. But the Court sees no
reason why--after years of extensive discovery and a
seven-day jury trial-- such documentation is necessary. The
parties have already asked the Court to review thousands of
pages of documents through the pendency of this case and the
Court is not inclined to review hundreds more solely for the
purpose of deciding whether a stay on enforcing the judgment
pending post-trial motions ought to be reconsidered. The
affidavits are sufficient to support DatabaseUSA's
contention that no bond should be required. See
Dillon 866 F.2d at 904-05; Arban, 345 F.3d 390,
409; Olympia Equip. Leasing Co., 786 F.2d at 796.
so, the Court sees no reason why Infogroup's alternative
argument, that various covenants ensuring DatabaseUSA and Mr.
Gupta preserve relevant banking, tax, and financial records,
cannot be added to the Court's prior Order staying
execution of judgment. And apparently neither does
DatabaseUSA--who did not provide the Court with any
substantive argument as to why, in its view, such language
would be inappropriate. Accordingly, IT IS ORDERED:
1. Infogroup's motion to reconsider (filing 499) is
granted in part and denied in part.
2. The Defendants are not required to post a bond during the
pendency of any further post-trial motions.
3. The Defendants shall direct their accountants and other
financial professionals (with a corresponding commitment from
each of them) that all banking, tax and financial records,
from and after January 1, 2012, in their possession or
control, regarding any Defendant, will be maintained and
preserved, without any spoliation.
4. No. asset of any Defendant will be transferred, (i)
outside the ordinary course of business, (ii) for less than a
reasonably equivalent value, or (iii) to an insider.
5. The Defendants shall agree in writing to the tolling of
any statute of limitations applicable to fraudulent transfer
claims, alter ego claims, continuing corporation claims,
director and officer liability claims and all other creditor
relief claims of every type and nature, that Infogroup may
have against either ...