From Dreams to Deals: Avoiding Pitfalls in Commercial Real Estate Financing
The Challenges Of Obtaining Prejudgment Attachment

Both An Appeal And A Bond Generally Are Required To Stay Proceedings Supplemental

Lesson. In Indiana, a judgment debtor (defendant) generally will be required to post a bond in order to stay (stop) proceedings supplemental (post-judgment collection efforts) during an appeal. Without a bond and a corresponding order of stay, proceedings supplemental can occur.

Case cite. Patterson v. Howe 2023 U.S. Dist. LEXIS 75938 (S.D. Ind. 2023)

Legal issue. Whether the plaintiff/judgment creditor’s motion for proceedings supplemental should be granted or denied.

Vital facts. Plaintiff sued Defendant under the Fair Debt Collection Practices Act and obtained a money judgment in his favor. While Plaintiff sought to force Defendant to testify as to his assets available to satisfy the judgment, Defendant appealed the judgment.

Procedural history. The Patterson case was before the U.S. District Court for the Southern District of Indiana. One of the issues centered on whether Defendant must post a bond in order to stay post-judgment collection proceedings.

Key Rules.

FRCP 62(b) provides that "[a]t any time after judgment is entered, a party may obtain a stay by providing a bond or other security," and the stay "takes effect when the court approves the bond or other security and remains in effect for the time specified in the bond or other security."

“Though a party must post bond if it wants an automatic stay, a court may waive the bond requirement entirely.” “The amount of bond, if any, is left to the discretion of the district court.” A “stay without bond is the exception, not the rule.”

Holding. The Court ordered Defendant to post an appeal bond in the amount of the judgment and, assuming the posting of that bond, ordered a stay of the proceedings supplement. This prevented Defendant from being required to testify about his assets while his appeal was pending.

Policy/rationale. The Court denied Plaintiff’s motion for proceedings supplemental on the assumption that Defendant would post a bond. “In the event that proceedings supplemental becomes necessary following the outcome of [the appeal], or should [Defendant] fail to post a bond, [Plaintiff] may file a renewed motion.”

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My practice includes representing lenders, borrowers and guarantors in contested commercial collection proceedings. If you need assistance with a similar matter, please call me at 317-639-6151 or email me at [email protected]. Also, don’t forget that you can follow me on Twitter @JohnDWaller or on LinkedIn, or you can subscribe to posts via RSS or email as noted on my home page.

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