In Re Pegasus Funds Tfn Trading Partners
Docket: 05-11-00580-CV
Court: Court of Appeals of Texas; June 24, 2011; Texas; State Appellate Court
Relators, Pegasus Funds TFN Trading Partners, LP, along with individuals Robert A. Shuey, III and William B. Glenn, Jr., filed a mandamus proceeding challenging a trial court's judgment as void due to Pegasus's bankruptcy filing. The Court of Appeals of Texas addressed the relators' claim under the automatic stay provisions of the bankruptcy code, which prevents actions against a debtor once a bankruptcy petition is filed, specifically referencing 11 U.S.C.A. § 362(a)(1). The court concluded that the trial court's judgment was void concerning Pegasus due to the bankruptcy stay, thus granting partial mandamus relief. However, the court determined that the automatic stay did not extend to the individual relators, Shuey and Glenn, as the stay does not protect non-debtors merely because of their association with the debtor. Consequently, the judgment against the individual relators was upheld, and the court found no abuse of discretion by the trial court regarding them. The court conditionally granted the writ of mandamus, directing the trial court to vacate its dismissal of claims against Pegasus and to void the judgment against Pegasus, while the stay previously imposed by the court was lifted.