IN RE: CONTINENTAL AIRLINES, et al., Debtors. M. BARNETT GILLMAN, et al., Appellants v. CONTINENTAL AIRLINES, INC., and CONTINENTAL AIRLINES HOLDINGS, INC., Appellees., 177 B.R. 475

Summary

Debtor, an airline in bankruptcy reorganization proceedings, filed an action in the bankruptcy court to enjoin appellants' shareholder class action lawsuits, naming the non-debtor party defendants. The bankruptcy court granted injunctions under 11 U.S.C.S. §§ 362(a) and 105(a), finding that prosecution of the actions would substantially hinder debtor's reorganization effort. Appellants sought review, contending that the debtor protections of 11 U.S.C.S. § 362(a)(1) did not apply to non-debtors. The court affirmed the bankruptcy court's decision. In two of the class actions, debtor and named defendants shared an identity of interest, and the prosecution of the lawsuits would have hindered debtor's reorganization effort. The court also found that the injunction of the third action might have been better tailored to balance debtor's and appellants' interests, but it still affirmed the decision to render the injunction absent appellants' objection to the form of the bankruptcy court's ...