FILED
NOT FOR PUBLICATION
MAY 04 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
KLINKENBORG AERIAL SPRAYING No. 15-35008
AND SEEDING, INC.,
D.C. No.
Plaintiff-Appellee, 9:12-cv-00202-DLC
v.
MEMORANDUM*
ROTORCRAFT DEVELOPMENT
CORPORATION; ROTORCRAFT
HOLDINGS, LLC; SELECT AVIATION
SERVICES, INC.; SELECT AVIATION
HOLDINGS, LLC; GARY FOX,
individually; SELECT TURBINE
COMPONENTS, INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the District of Montana
Dana L. Christensen, Chief District Judge, Presiding
Submitted April 3, 2017**
Seattle, Washington
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
Before: KOZINSKI and FLETCHER, Circuit Judges, and TUNHEIM, Chief
District Judge.***
As a general rule, 11 U.S.C. § 362(a)’s automatic stay only protects the
debtor and not corporate affiliates. Chugach Timber Corp. v. N. Stevedoring &
Handling Corp. (In re Chugach Forest Prods., Inc.), 23 F.3d 241, 246 (9th Cir.
1994). Appellants Rotorcraft Development, Rotorcraft Holdings LLC, Select
Aviation Services Inc., Select Aviation Holdings LLC, and Gary Fox (collectively,
“Rotorcraft entities”) are corporate affiliates of now-bankrupt Select Turbine
Components, Inc., and, therefore, the stay does not automatically protect the
Rotorcraft entities.
The Rotorcraft entities nevertheless contend that the automatic stay extends
to Klinkenborg’s alter-ego claims because they are property of the estate. We have
construed such contentions as assertions that “unusual circumstances” warrant
departure from the “general rule” articulated above. See In re Chugach Forest
Prods., 23 F.3d at 246; O’Malley Lumber Co. v. Lockard (In re Lockard), 884 F.2d
1171, 1179–78 (9th Cir. 1989). We have never adopted the “unusual
circumstances” exception in the Ninth Circuit and we decline to do so here. See In
re Chugach Forest Prods., 23 F.3d at 246–47. Further, even if we were to adopt
***
The Honorable John R. Tunheim, Chief United States District Judge for
the District of Minnesota, sitting by designation.
2
“unusual circumstances” exception, the exception requires the bankruptcy court to
extend the automatic stay using its equity jurisdiction “‘after hearing and the
establishment of unusual need to take this action to protect the administration of the
bankruptcy estate.’” Solidus Networks, Inc. v. Excel Innovations, Inc. (In re Excel
Innovations, Inc.), 502 F.3d 1086, 1096 (9th Cir. 2007) (quoting In re Chugach
Forest Prods., 23 F.3d at 247 n.6). Here, the bankruptcy court has not used its
equity jurisdiction to extend the automatic stay to the Rotorcraft entities. Finally,
even if the bankruptcy court were not required to apply its equity jurisdiction,
Klinkenborg’s alter-ego claim pled “[u]pon information and belief,” does not
support a finding of “unusual circumstances” to automatically extend the protection
of § 362(a).
AFFIRMED
3