Divided Third Circuit Partially Stays Sale of Casino Pending Commercial Tenant’s Appeal

A divided panel of the U.S. Court of Appeals for the Third Circuit stayed the part of a bankruptcy court’s sale order that would have “stripped” a commercial tenant’s lease from the casino property being sold to a third party. In re Revel AC, Inc., 2015 WL 5711358 (3d Cir. Sept. 30, 2015) (2-1). Reversing the bankruptcy and district courts’ denial of a limited stay pending the tenant’s appeal from the sale order, the Third Circuit not only recognized the public interest in protecting commercial tenants’ rights, but also held that the debtor had shown no “objective basis — either in law or fact — to cast doubt on the validity of” the debtor’s lease with the tenant (“T”). Indeed, said the court, T’s prevailing on the merits of its appeal was “all but assured.”