Gregory v. Finova Capital Corp. , 442 F.3d 188 ( 2006 )

Filed: March 31, 2006
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-2118
(CA-04-2612-8)
EARLE B. GREGORY; KEN BLINKO; BETTY C. COLEY;
VICKI GRAINGER; ETHEL E. GRAVES; BECKY
HALSALL; JOHN S. HALSALL, III; JERRY F.
MCDANIEL; VERONICA T. MCDANIEL; LAVERNE
MCKENZIE; MARIANNE MCKENZIE; NATHAN J. NEELY;
ZEVIE H. NEELY; SULINA PRATHER; KATHRYN
RODDEY; GINA TIBBS; JOHN A. TIBBS; JOHN C.
TIBBS; BRENDA D. WATTS; GERALD D. WATTS; C.
ANN WILLIAMS; HENRY M. WILLIAMS, JR.; WESLEY
L. WILLIAMS, JR.; GRANT HALL; TOM MOORE; ANNA
NUNNERY; CHARLES SHOPE; PENELOPE SHOPE; KATHY
ANNETTE WOOD; SAM JONES WOOD; RUTH ANN HALL,
Plaintiffs - Appellees,
versus
FINOVA CAPITAL CORPORATION,
Defendant - Appellant.
O R D E R
The court amends its opinion filed March 14, 2006, as follows:
On page 4, line 13, the words “id. at” are added following
“See, e.g.,” in the citation.
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
EARLE B. GREGORY; KEN BLINKO; 
BETTY C. COLEY; VICKI GRAINGER;
ETHEL E. GRAVES; BECKY HALSALL;
JOHN S. HALSALL, III; JERRY F.
MCDANIEL; VERONICA T. MCDANIEL;
LAVERNE MCKENZIE; MARIANNE
MCKENZIE; NATHAN J. NEELY; ZEVIE
H. NEELY; SULINA PRATHER;
KATHRYN RODDEY; GINA TIBBS; JOHN
A. TIBBS; JOHN C. TIBBS; BRENDA D.
WATTS; GERALD D. WATTS; C. ANN
WILLIAMS; HENRY M. WILLIAMS, JR.;  No. 05-2118
WESLEY L. WILLIAMS, JR.; GRANT
HALL; TOM MOORE; ANNA NUNNERY;
CHARLES SHOPE; PENELOPE SHOPE;
KATHY ANNETTE WOOD; SAM JONES
WOOD; RUTH ANN HALL,
Plaintiffs-Appellees,
v.
FINOVA CAPITAL CORPORATION,
Defendant-Appellant.

Appeal from the United States District Court
for the District of South Carolina, at Anderson.
G. Ross Anderson, Jr., District Judge.
(CA-04-2612-8)
Argued: February 2, 2006
Decided: March 14, 2006
Before WIDENER, LUTTIG, and KING, Circuit Judges.
2 GREGORY v. FINOVA CAPITAL CORP.
Reversed by published opinion. Judge Luttig wrote the opinion, in
which Judge Widener joined. Judge King wrote an opinion concurring
in part and dissenting in part.
COUNSEL
ARGUED: Daniel P. Shapiro, GOLDBERG, KOHN, BELL,
BLACK, ROSENBLOOM & MORITZ, LTD, Chicago, Illinois, for
Appellant. Gilbert Scott Bagnell, BAGNELL & EASON, L.L.C.,
Columbia, South Carolina, for Appellees. ON BRIEF: Elizabeth Van
Doren Gray, Allen J. Barnes, SOWELL, GRAY, STEPP & LAF-
FITTE, P.L.L.C., Columbia, South Carolina; Steven A. Levy, Andrew
R. Cardonick, GOLDBERG, KOHN, BELL, BLACK, ROSEN-
BLOOM & MORITZ, LTD, Chicago, Illinois, for Appellant. Chad
McGowan, S. Randall Hood, MCGOWAN, HOOD, FELDER &
JOHNSON, Rock Hill, South Carolina; Randall M. Eason, BAG-
NELL & EASON, L.L.C., Lancaster, South Carolina, for Appellees.
OPINION
LUTTIG, Circuit Judge:
Appellee-noteholders filed a class action suit against the principal
lender of the now-bankrupt company that issued the notes. The dis-
trict court certified the class action. However, there is a currently
pending bankruptcy adversary proceeding dealing with most of the
same questions at issue in the class action. We reverse the class certi-
fication because, in light of the adversary proceeding, the class action
is not the superior method for the fair and efficient adjudication of the
controversy.
I.
From 2000 to 2003, The Thaxton Group, Inc. (TGI), sold notes to
appellees. J.A. 191-95. The notes, which TGI sold in a series of
person-to-person transactions, id. at 448-647, were offered under at
least eight separate registration statements that TGI filed with the
GREGORY v. FINOVA CAPITAL CORP. 3
Securities Exchange Commission, id. at 2130-62. The appellee-
noteholders allege that TGI sold these notes in order to repay a por-
tion of the debt TGI owed to appellant, Finova Capital Corp., which
was TGI’s principal lender. See id. at 204. TGI filed for Chapter 11
bankruptcy on October 17, 2003. See In re The Thaxton Group, Inc.,
No. 03-13183 (Bankr. D. Del. filed Oct. 17, 2003).
Shortly after TGI’s bankruptcy filing, appellees filed this class
action against Finova and TGI’s lawyers and accountants.1 The class
action complaint alleges that TGI misrepresented financial data in the
notes’ registration statements in violation of section 11 of the Securi-
ties Act of 1933, 15 U.S.C. § 77l, and that Finova is jointly and sever-
ally liable for the misrepresentations under section 15 of the
Securities Act, 15 U.S.C. § 77o, because Finova was "an active part-
ner and counselor to" TGI, took "a leading role in most of [TGI’s]
major business decisions," and was "fully aware of the note sale pro-
gram designed to transfer the risky portion of the Finova debt to the
unsuspecting noteholders," J.A. 229-32. The class action complaint
also asserts that Finova was a participant in a civil conspiracy, under
South Carolina law, to sell "worthless securities to the plaintiffs with
the purpose of transferring the money to Finova." Id. at 250.
Several months after the appellees filed their class action, the com-
mittee of TGI’s unsecured creditors commenced an adversary pro-
ceeding against Finova in the Delaware bankruptcy court where
TGI’s bankruptcy was pending.2 The unsecured creditors sought to
have Finova’s secured claims either disallowed or equitably subordi-
nated to the noteholders’ unsecured claims. The Official Cmte. of
1
The lawyers and accountants do not appeal the class certification.
2
The Delaware bankruptcy court set a bar date of February 27, 2004,
for filing proofs of claim. Finova is TGI’s sole secured creditor, holding
approximately $110 million in debt secured by a lien on most of TGI’s
assets. TGI has approximately $120 million in unsecured debt, which
includes the debt held by the noteholders who are the plaintiffs in this
class action. There are no unsecured priority creditors, and all of TGI’s
employees were paid after TGI’s bankruptcy filing. At oral argument
counsel for Finova represented that there was approximately $160 mil-
lion in TGI’s bankruptcy estate. That representation was not disputed by
the plaintiffs’ counsel.
4 GREGORY v. FINOVA CAPITAL CORP.
Unsecured Creditors of The Thaxton Group, Inc. v. Finova Capital
Corp. (In re The Thaxton Group, Inc.), No. 04-53129 (Bankr. D. Del.
filed Mar. 24, 2004). The adversary complaint alleges that Finova
violated banking laws and regulations, securities laws and regulations,
and fiduciary duties owed to TGI. J.A. 70-170. It includes allegations
of the same securities law violations alleged in appellees’ class action
— that is, controlling-person liability under section 15 for TGI’s sec-
tion 11 violations. Id. at 150-51. While the adversary complaint does
not contain any allegation of a South Carolina civil conspiracy, the
substance of the civil conspiracy claim is alleged repeatedly, as many
of the complaint’s allegations depend upon the existence of a scheme
to sell worthless securities to the noteholders in order to allow TGI
to repay money owed to Finova. See, e.g., id. at 155-58.
The district court acted on the appellees’ class action complaint by
certifying the class action and designating three subclasses, only two
of which included plaintiffs pursuing claims against Finova. The first
subclass comprises TGI noteholders who "purchased notes during the
three-year period prior to October 16, 2003 and who held these notes
as of the date that Thaxton discontinued the note program on Septem-
ber 29, 2003" and who are pursuing section 15 claims against Finova
for TGI’s section 11 violations. Id. at 2253-54. The second subclass
comprises TGI noteholders who "held notes purchased from Thaxton
as of September 29, 2003 when Thaxton discontinued its note pro-
gram" and who are pursuing civil conspiracy claims against Finova.
Id. at 2254. In certifying the class action, the district court found that
the action satisfied all of the requirements of Federal Rule of Civil
Procedure 23. Id. at 2254-61. Specifically, it found that "a class action
is the superior method available for the fair and efficient adjudication
of Plaintiffs’ claims." Id. at 2260.
Pursuant to Federal Rule of Civil Procedure 23(f), Finova filed a
petition in this court for permission to appeal the district court’s class
certification. We granted Finova’s petition for permission to appeal,
stayed the class action proceedings pending in the district court, and
now reverse the district court’s class certification.
GREGORY v. FINOVA CAPITAL CORP. 5
II.
We review the district court’s certification decision for abuse of
discretion. McClain v. South Carolina Nat. Bank, 105 F.3d 898, 902
(4th Cir. 1997). Though, in order to be affirmed, the district court
must exercise its discretion "within the framework of Rule 23." Lien-
hart v. Dryvit Sys., Inc., 255 F.3d 138, 146 (4th Cir. 2001). In addi-
tion to satisfying the numerosity, commonality, typicality, and
representativeness requirements of Federal Rule of Civil Procedure
Rule 23(a), actions certified under Rule 23(b)(3) must satisfy the pre-
dominance and superiority requirements. Id. The party seeking class
certification bears the burden of proof on these elements. Id. We
address only Rule 23(b)(3)’s superiority requirement, which requires
that the district court find that "a class action is superior to other
available methods for the fair and efficient adjudication of the contro-
versy."3 Rule 23(b)(3)(B) deems "the extent and nature of any litiga-
tion concerning the controversy already commenced by or against
members of the class" a pertinent consideration in deciding whether
the class action is superior.
The district court concluded that the class action was superior to
other available methods for the fair and efficient adjudication of this
controversy by comparing the class action to thousands of individual
suits, without even mentioning the adversary proceeding in its analysis.4
See J.A. 2260-61 ("One class action, with subclasses, remains unques-
3
A necessary condition to certification under Rule 23(b)(3) is the class
action’s superiority to all other methods for the fair and efficient adjudi-
cation of the controversy. Thus, a class cannot be certified under Rule
23(b)(3) if there is a method to which the class action is not superior. As
long as the class action is not superior to one method, it makes no differ-
ence whatsoever that the class action is superior to other methods. In this
case, even if it were true that the class action would be superior to indi-
vidual actions, the class cannot be certified if it is not superior to the
adversary proceeding.
4
There is no question that the district court knew of the existence of
the adversary proceeding when it certified the class action. The adversary
proceeding was filed more than a year before the class action was certi-
fied, and the submissions made to the district court arguing for class cer-
tification discussed the pending adversary proceeding. See J.A. 360.
6 GREGORY v. FINOVA CAPITAL CORP.
tionably superior to thousands of separate trials that might lead to dis-
parate results."). It was an abuse of discretion for the district court to
find the class action superior without analyzing whether it was supe-
rior to the adversary proceeding — the only other pending, collective
proceeding having to do with the same controversy as the class action.
By failing to analyze whether the class action was superior to the
adversary proceeding, the district court did not consider "the extent
and nature of any litigation concerning the controversy already com-
menced by or against members of the class," as Rule 23(b)(3)(B)
advises.
When the class action is compared to the adversary proceeding, it
is clear that the former is not superior to the latter. The bankruptcy
court must decide the matters raised in the adversary proceeding in
order to determine the validity and priority of TGI’s creditors’ claims.
It would be inefficient and needlessly duplicative to allow the class
action to go forward when the adversary proceeding will likely adju-
dicate this controversy in the normal course of TGI’s bankruptcy.5
The adversary proceeding presents no danger of unfairness due to dis-
parate results because it, like the class action, will yield a single result
5
The dissent characterizes the adversary proceeding as concerning
"only whether Finova must wait behind the noteholders in line for TGI’s
assets," post at 10, and distinguishes it from the class action, which it
characterizes as presenting the issue of Finova’s direct liability to the
noteholders, id. However, the two proceedings are not as distinct as the
dissent makes them seem. The conduct that could cause the court to put
Finova behind the noteholders in line for TGI’s assets in the adversary
proceeding includes the same conduct that could give rise to Finova’s
direct liability to the noteholders. Specifically, a finding that Finova is
liable as a controlling person for TGI’s securities law violations or that
Finova participated in a civil conspiracy to sell worthless securities
would likely be sufficient to put Finova behind the noteholders in the line
for TGI’s assets. Those findings are precisely the findings that the note-
holders seek in this class action.
Furthermore, if the noteholders are made "more or less whole" by suc-
cess in the adversary proceeding, which success would result in payment
from TGI’s assets ahead of Finova, Finova’s direct liability to the note-
holders will be "more or less" extinguished. See 15 U.S.C. § 77o (making
controlling persons liable "jointly and severally with and to the same
extent" as controlled persons).
GREGORY v. FINOVA CAPITAL CORP. 7
for all of the noteholders. Also, the adversary proceeding will avoid
many of the expenses and complexities associated with having the
class action and the adversary proceeding pending simultaneously
(such as those presented in the case before us today). For these rea-
sons, the class action cannot be considered the superior method for
the fair and efficient adjudication of the controversy.
Appellees contend that the class action is superior to the adversary
proceeding because "the adversary proceeding seeks relief that is dif-
ferent from the relief in this action." Appellee’s Br. at 59. Specifically,
appellees point to their claim for punitive damages and the potential
availability of pre- and post-judgment interest in the class action.
However, this disparity in the relief requested does not overcome the
considerations that lead us to conclude that the class action is not the
superior method for fairly and efficiently adjudicating the controversy.6
Our conclusion is reinforced by the fact that the class action plaintiffs
have acknowledged that, if successful in the adversary proceeding,
they could be made "more or less whole." J.A. 360. The fact that the
relief sought in the two actions differs slightly is not enough to per-
suade us that the class action is superior.
CONCLUSION
The judgment of the district court is reversed and the case is
remanded.
REVERSED
6
It is not clear that the disparity in the relief requested is the result of
any structural impediment to asserting a claim for punitive damages or
pre- and post-judgment interest in the bankruptcy adversary proceeding.
There does not appear to be any bar to bringing the claim for punitive
damages in the adversary proceeding. Indeed, the adversary complaint
currently requests punitive damages on at least one claim. J.A. 169. And,
the availability of pre- and post-judgment interest in the bankruptcy pro-
ceeding appears to be an open question the decision of which depends
upon the characterization of the claims that succeed in the adversary pro-
ceeding.
8 GREGORY v. FINOVA CAPITAL CORP.
KING, Circuit Judge, concurring in part and dissenting in part:
While I agree that the stay should be dissolved, I would affirm the
class certification. I write separately for two reasons: to explain my
position on the dissolution of the stay, and because my friends of the
panel majority have erroneously reversed the portion of the district
court’s class certification order that is on appeal.
I.
First of all, I support the prompt dissolution of the stay pending
appeal which we placed on the district court proceedings on October
14, 2005. In my view, the district court proceedings involving the
defendants who are non-parties to this appeal — the accounting firm
of Cherry, Bekaert & Holland, L.L.P. ("CBH") and the law firm of
Moore & Van Allen, P.L.L.C. ("MVA") — should proceed unim-
peded by the panel majority’s ruling, which relates solely to the
Finova Capital Corporation ("Finova").
The district court, by its certification order, certified three separate
subclasses in this class action, which is being pursued by plaintiffs
who purchased notes from The Thaxton Group, Inc. ("TGI"), a busi-
ness now in bankruptcy. Subclass 1 involves the TGI noteholders’
claims under the federal securities laws against Finova and CBH;
Subclass 2 involves claims under the federal securities laws against
MVA only; and Subclass 3 involves state tort claims against both
Finova and MVA. Following the district court’s ruling, Finova, CBH,
and MVA each sought permission to appeal the certification order and
a stay of the district court proceedings. After successfully negotiating
settlement agreements with the representative plaintiffs on Subclass
2 and on those aspects of Subclasses 1 and 3 relating to them, CBH
and MVA moved separately to dismiss their appeal proceedings and
withdraw their stay requests. On October 6, 2005, we granted CBH’s
motion to withdraw its pending motions and dismissed its petition for
permission to appeal. By order of October 7, 2005, we granted
MVA’s motion for voluntary dismissal of its petition for permission
to appeal and its motion for a stay pending appeal, and we dismissed
its appeal.1
1
Finova’s petition for permission to appeal was originally docketed
here as No. 05-337, CBH’s as No. 05-338, and MVA’s as No. 05-339.
As noted above, Nos. 05-338 and 05-339, as to CBH and MVA, have
been dismissed.
GREGORY v. FINOVA CAPITAL CORP. 9
Thereafter, on October 14, 2005, we granted Finova’s petition for
permission to appeal and its stay request, and entered the order stay-
ing the district court proceedings during Finova’s appeal. As a result,
the settlements negotiated by CBH and MVA with the class represen-
tatives (encompassing Subclass 2 and parts of Subclasses 1 and 3)
have not been consummated. See Fed. R. Civ. P. 23(e) (requiring dis-
trict court approval for settlement of claims asserted by certified
class). Moreover, the separate adversary bankruptcy proceeding in the
district court, which was initiated against Finova on behalf of TGI
noteholders, has come to a halt.
Our panel rules today on the merits of Finova’s appeal, and we
have appropriately entered a separate order dissolving the stay of the
district court proceedings. Because the stay is being vacated, the
adversary bankruptcy proceeding may now go forward, and CBH,
MVA, and the representative plaintiffs are free to seek consummation
of their negotiated settlements.2
II.
As noted above, however, I disagree with the panel majority’s deci-
sion to reverse the certification order. Put simply, application of the
proper standard of review should carry the day in this appeal, because
we "should not interfere with a district court’s ruling on class certifi-
cation unless we find an abuse of discretion." McClain v. S.C. Nat’l
Bank, 105 F.3d 898, 902 (4th Cir. 1997). As I see it, the panel major-
ity has made two critical errors in deciding to upend the certification
order. First, it has incorrectly concluded that the district court abused
its discretion by not properly weighing the adversary bankruptcy pro-
ceeding in its superiority analysis. Second, in failing to remand to the
2
For at least three sound reasons, the opinion of the panel majority
should not, in my view, prejudice further settlement proceedings involv-
ing CBH and MVA. First, Subclass 2 and those portions of Subclasses
1 and 3 certified against CBH and MVA are not at issue in this appeal.
Second, CBH and MVA have abandoned their efforts to appeal the certi-
fication order. Third, the panel majority’s analysis, which relies on the
availability of the adversary bankruptcy proceeding, has no application
to those aspects of the certification order relating to CBH and MVA,
because CBH and MVA are not involved in the bankruptcy proceeding.
10 GREGORY v. FINOVA CAPITAL CORP.
district court for its reconsideration of the superiority issue, the panel
majority has usurped the district court’s role in class certification pro-
ceedings.
A.
To begin, the panel majority has, in my view, incorrectly con-
cluded that the district court erred in its superiority analysis by failing
to properly consider the adversary bankruptcy proceeding. In so
doing, the panel majority has misconstrued the relationship between
the class action proceedings at issue in this appeal and the adversary
bankruptcy proceeding pending in the district court. The plaintiffs,
who are purchasers of notes from TGI, initiated the class action on
behalf of themselves and similarly situated TGI noteholders (collec-
tively, the "noteholders"). Their lawsuit seeks to hold Finova, which
allegedly controlled TGI, jointly and severally liable for misrepresen-
tations TGI made in the notes’ registration statements, and also for
Finova’s use of TGI to operate a Ponzi scheme. In the adversary
bankruptcy proceeding, by contrast, a committee representing the
noteholders (the "Committee") seeks to subordinate Finova’s claim on
TGI’s assets to those of the noteholders, and ultimately to recover
from TGI, not Finova. Put simply, the class action proceedings and
the adversary bankruptcy proceeding are fundamentally different, and
the existence of one does not supplant the necessity for the other.
In concluding that the class action proceedings are not superior to
the adversary bankruptcy proceeding, the panel majority presents a
false choice for the resolution of the controversy at issue here.
According to its opinion, the adversary bankruptcy proceeding pro-
vides an obvious outlet for the controversy embodied in the class
action as certified, and the district court abused its discretion by not
properly considering the availability of the adversary bankruptcy pro-
ceeding in its superiority analysis. The adversary bankruptcy proceed-
ing — which concerns only whether Finova must wait behind the
noteholders in line for TGI’s assets — will not, however, resolve the
separate controversy underlying this appeal, that is, whether Finova
is directly liable to the noteholders.3 And neither the pendency of the
3
Importantly, it is uncertain whether the Committee will prevail in its
equitable subordination claim even if it can establish Finova’s liability
GREGORY v. FINOVA CAPITAL CORP. 11
adversary bankruptcy proceeding nor the panel majority’s decision
precludes the noteholders from individually suing Finova on the
claims now being decertified. That the same conduct underlies the
claims asserted on the noteholders’ behalf in both venues seems, to
me, beside the point. See ante at 6 n.5. The district court simply was
not, when it ruled on the class certification issues, compelled to
decide whether to allow the class action to go forward alongside the
adversary bankruptcy proceeding. Rather, as the court properly recog-
nized, it was presented with a choice between class action proceed-
ings and thousands of individual lawsuits.
For these reasons, the mere possibility that the adversary bank-
ruptcy proceeding might one day extinguish the noteholders’ direct
claims against Finova is not relevant to the superiority analysis in this
case. The crucial point, in my view, is the absolute certainty that the
noteholders’ direct claims against Finova will be extinguished when
the applicable limitations period expires. As the plaintiffs emphasize,
vacating the district court’s certification order as to Finova will
require each TGI noteholder to file a separate lawsuit in order to pre-
serve his claims against Finova. And I am aware of no authority for
a district court to dismiss these approximately 4000 individual lawsuits4
by directing the noteholders to the adversary bankruptcy proceeding.
Yet the panel majority’s superiority analysis fails to address the pros-
pect for — and potential impact of — such repetitive litigation, the
only other method available for adjudicating the controversy pre-
sented in this appeal. See ante at 5 n.3.
The district court appropriately understood the choice presented to
it (i.e., class action proceedings or thousands of parallel lawsuits) and
under the securities laws. See ante at 6 n.5 (noting that "a finding that
Finova is liable [under the securities laws] would likely be sufficient to
put Finova behind the noteholders in the line for TGI’s assets" (emphasis
added)); see also 11 U.S.C. § 510(c)(1) (providing that bankruptcy court
"may" subordinate claims "under principles of equitable subordination");
EEOC v. Navy Fed. Credit Union, 424 F.3d 397, 405 (4th Cir. 2005)
(observing that equitable determinations are discretionary).
4
At oral argument, plaintiffs’ counsel represented, without contradic-
tion, that there are approximately 4000 TGI noteholders, with approxi-
mately 6700 potential claims.
12 GREGORY v. FINOVA CAPITAL CORP.
decided, in its discretion, that class action treatment (to the extent cer-
tified) was the superior method for a fair and efficient adjudication of
the controversy between the noteholders and Finova. See Fed. R. Civ.
P. 23(b)(3); Amalgamated Workers Union v. Hess Oil V.I. Corp., 478
F.2d 540, 543 (3d Cir. 1973) (recognizing that superiority require-
ment "was intended to refer to the preferability of adjudicating claims
of multiple-parties in one judicial proceeding . . . rather than forcing
each plaintiff to proceed by separate suit"). In these circumstances, its
ruling on this point was not an abuse of its discretion, and the class
certification order should be affirmed.
B.
Quite apart from my view that the district court was within its dis-
cretion in making its superiority determination, the panel majority has
arrogated unto itself the discretion vested in the district courts on
class certification issues. Although our review of a trial court’s class
certification ruling is for abuse of discretion only, see ante at 5, the
panel majority has nevertheless decided, in the first instance, that a
class action proceeding is not superior to the adversary bankruptcy
proceeding. See ante at 6-7; see also, e.g., id. at 7 ("The fact that the
relief sought in the two actions differs slightly is not enough to per-
suade us that the class action is superior." (emphasis added)). Put sim-
ply, the scope of our deferential review does not, in my view,
authorize us to supplant the role of the district court. If the district
court somehow erred (and I am unable to agree that it did) in not
properly considering the adversary bankruptcy proceeding in its supe-
riority analysis, our remedy should be to vacate and remand, provid-
ing the court with the opportunity to first address the superiority
issues under the appropriate rubric.
With all respect, I dissent on the merits and concur in our dissolu-
tion of the stay.