A federal judge Monday extended indefinitely a stay of any civil action against the Samanta Roy Institute of Science and Technology while SIST appeals the dismissal of its Chapter 11 bankruptcy petition.
Chief United States District Judge Gregory Sleet offered no explanation for the ruling, writing only that the temporary stay ordered one week earlier "is to remain in effect until further notice."
Last week, U.S. Bankruptcy Judge Kevin Gross - who had dismissed the SIST bankruptcy petition - issued a temporary stay that was to have expired Monday.
Gross stated in his order he was issuing the stay despite very slim chances of SIST successfully appealing.
"The Court is highly confident of the correctness of its ruling," Gross wrote. "The Court therefore views the likelihood of appellants succeeding in their appeal as correspondingly very low."
However, Gross goes on to cite the heavy workload of the District Court - of which the bankruptcy court is a part - and the lack of a full complement of judges in deciding to issue the stay.
Gross writes that it would "better serve the administration of justice and enable the District Court to schedule any application for a stay on a less disruptive basis."
Gross had dismissed the bankruptcy case September 21. SIST subsequently appealed and requested for a stay of any other legal action while the appeal is pending.
In its appeal, SIST is maintaining a number of errors by the bankruptcy judge in reaching his decision.
Those errors, according to SIST, include dismissal of the case during the exclusivity period, taking into account the failure to file tax returns while the bankruptcy was pending, and failing to give notice of the subject matter of the September 21 hearing at which SIST had been ordered to show cause why the case should not be dismissed.
Several court cases alleging unpaid debts of more than $4 million against SIST were pending at the time of the March bankruptcy filing.
The filing came just a few weeks before three Shawano gas station properties, owned by SIST subsidiary Midwest Oil of Wisconsin, were scheduled for a foreclosure sale.
According to a civil suit filed by Integrity First Bank, of Wausau, Midwest Oil secured a total of $1.3 million in financing from the bank in August and September 2006 by mortgaging the three properties. According to the suit, $1.2 million was remaining on the debt when the bank was awarded a summary judgment in December of last year.
Also in December of last year, another civil suit was filed by Southwest Guaranty, Ltd., of Houston, requesting a receiver be appointed for Midwest Amusement Park’s USA International Raceway over an allegedly defaulted $2.2 million mortgage.
Southwest Guaranty had filed an unsuccessful objection to the stay.
