PFS LTD PFS MANAGEMENT LTD CAYMAN ISLANDS LIMITED COMPANY v. FORTUNATE DRIFT LIMITED BRITISH VIRGIN ISLANDS LIMITED COMPANY (2026)

ORDER DISMISSING APPEAL

This is an appeal of a final judgment after a civil bench trial. Eighth Judicial District Court, Clark County; Gloria Sturman, Judge.

Appellant has filed a motion for an extension of time to file the opening brief. Respondent opposes the motion and, in its opposition, alerts this court to a Chapter 15 bankruptcy proceeding involving appellant. Respondent also moves to dismiss this appeal, arguing that appellant lacks standing due to developments in the bankruptcy proceeding. Moreover, it appears the United States Bankruptcy Court for the Southern District of New York entered an order in Case No. 25-12706 on January 29, 2026, granting appellant and its foreign representatives “all relief set forth in section 1520 of the Bankruptcy Code including, without limitation, the application of the protection afforded by the automatic stay under section 362(a) of the Bankruptcy Code.”

As respondent points out, the filing of a bankruptcy petition operates to stay, automatically, the “continuation” of any “judicial ․ action ․ against the debtor.” 11 U.S.C. § 362(a)(1). For purposes of the automatic bankruptcy stay, an appeal is considered a continuation of the action in the trial court. See generally Ingersoll-Rand Fin. Corp. v. Miller Mining Co., 817 F.2d 1424 (9th Cir. 1987). Consequently, an appeal is automatically stayed if the debtor is a defendant below. Appellant was a counter-defendant below. Therefore, this appeal is stayed pursuant to the automatic stay provisions of federal bankruptcy law and, in comity, the order of the Bankruptcy Court of the Southern District of New York.

Given the applicability of the automatic stay, this appeal may linger indefinitely on this court's docket pending final resolution of the bankruptcy proceedings. Accordingly, we conclude that judicial efficiency is best served if this appeal is dismissed without prejudice. Because a dismissal without prejudice will not require this court to reach the merits of the appeal and is not inconsistent with the primary purposes of the bankruptcy stay, i.e., to provide protection for debtors and creditors, we further conclude that this dismissal will not violate the bankruptcy stay.¹ See Independent Union of Flight Attendants v. Pan Am. World Airways, Inc., 966 F.2d 457, 459 (9th Cir. 1992) (holding that the automatic stay does not preclude dismissal of an appeal so long as dismissal is “consistent with the purpose of the statute [11 U.S.C. § 362(a)]”; Dean v. Trans World Airlines, Inc., 72 F.3d 754, 755 (9th Cir. 1995) (holding that a post-bankruptcy petition dismissal will violate the automatic stay “where the decision to dismiss first requires the court to consider other issues presented by or related to the underlying case”). Accordingly, and without reaching the issue of standing raised by respondent, we dismiss this appeal. This dismissal is without prejudice to appellant's right to move for reinstatement of this appeal within 45 days of either the lifting of the bankruptcy stay or final resolution of the bankruptcy proceedings, if it deems such a motion appropriate at that time.

It is so ORDERED.²

Stiglich, J.

Cadish, J.

Lee, J.

FOOTNOTES

1.   The automatic stay provides a debtor “with protection against hungry creditors” and gives the debtor a “breathing spell from its creditors” by stopping all collection efforts. Dean v. Trans World Airlines, Inc., 72 F.3d 754, 755 (9th Cir. 1995). Further, it assures creditors “that the debtor's other creditors are not racing to various courthouses to pursue independent remedies to drain the debtor's assets.” Id. at 755-56.

2.   In light of this order, appellant's motion for an extension of time to file the opening brief and respondent's motion to dismiss this appeal are denied.