Spongetech Delivery Systems Inc (fka SPNGQ)

[puppydotcom]

SEC clearly disagrees with the filing by Metter and states it does NOT stay the case .. up to and the entry of judgment -

the 2 cases the SEC cites in the filing

http://openjurist.org/395/f3d/59/united-states-v-e-brennan

and

http://ftp.resource.org/courts.gov/c/F2/645/645.F2d.429.79-3420.html

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Suggestion of bankruptcy is a document filed with a court to put it on notice that the defendant in a pending lawsuit has filed a bankruptcy case. A party can file a suggestion of bankruptcy whenever a party believes that the bankruptcy or automatic stay provision of bankruptcy code has an effect on a state court case. The suggestion of bankruptcy will include the name of court in which the bankruptcy was filed and the bankruptcy case number. The party must identify the bankruptcy trustee and give instructions on the disposition of any monies of the debtor held by the court. A copy of the suggestion of bankruptcy is served on each party to the law suit.

Upon the filing of a notice or suggestion of bankruptcy, all action against the debtor is stayed for a specified period unless otherwise ordered by the court. The plaintiff must pove that the lawsuit in question is not subject to bankruptcy or that the plaintiff has sought relief from the automatic stay. Failure to such proof within a time set by the court will typically result in a dismissal without prejudice of the claim against the defendant who filed bankruptcy. Suggestion of bankruptcy rules vary by local area.


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The defendant’s bankruptcy acts as an automatic stay of all civil proceedings against him in every court or administrative agency. Ordinarily, the defendant’s attorney will file a “Suggestion of Bankruptcy” that alerts the court and other parties to this fact.

As a plaintiff, your options are to (a) file a motion in the bankruptcy court requesting relief from the automatic stay in order to continue prosecuting your lawsuit, (b) file a notice of removal in the bankruptcy court to transfer the case there, or (c) wait for the bankruptcy case to terminate and, if your claim hasn’t been discharged, continue the case in the original court. Item (c) is rarely the right course of action. Only an experienced bankruptcy attorney can advise you which would be the better course.

Any claims or counterclaims that the defendant may have against you are not subject to the automatic stay. Therefore, you could end up having to pay a judgment on a counterclaim and not being able to recover at all on your original claim.