On June 11, 2009, this court issued an order directing defendants to file an answer to the complaint, and to show cause why sanctions should not be imposed for their failure to file a status report, and their failure to appear at the June 10, 2009 status conference. Defendants were warned that, should they "fail to respond and/or fail to demonstrate good cause, or fail timely to file their answer, this court will treat their lack of response as an abandonment of any defense of the action and impose sanctions as appropriate, including payment of the travel and appearance expenses of plaintiffs' counsel at the status conference that defendants failed to attend, and a recommendation for entry of default judgment."
Defendants did not respond to the court's order. On May 7, 2008, defendant Gonzalez informed plaintiffs' counsel that he, defendant Gonzalez, was considering bankruptcy and would not be filing an answer. However, defendants have filed nothing informing the court of this, or of their efforts to file an answer and defend this action. Review of cases pending in the U.S. Bankruptcy Court for the Eastern District of California reveals that defendant Mis Amigos Meat Market, Inc., filed for Chapter 11 bankruptcy on June 10, 2009. See Docket of Bankruptcy Petition 09-31871. Represented by counsel, Mitchell Abdallah, the corporation lists Uriel Gonzalez as its President, who has signed the requisite papers. Id., Dckt. No. 1, at p. 3. A meeting of creditors is scheduled for July 17, 2009. Id. Included in the list of creditors is ""Miguel Velasco [one of the plaintiffs herein], ETC. . . FOR FORMER EMPLOYE[E]." Id., Dckt. No. 3, at p. 8.*fn1
Pursuant to 11 U.S.C. § 362, the filing of the bankruptcy petition operates as a stay of the instant proceeding. This court must therefore defer further consideration of the matters pending in the instant case until the bankruptcy action is terminated or plaintiffs have obtained relief from the automatic stay.
Accordingly, IT IS HEREBY ORDERED that:
1. By operation of the automatic stay, 11 U.S.C. § 362, this action is stayed pending resolution of defendants' bankruptcy petition, case number 09-31871, filed June 10, 2009, in the United States Bankruptcy Court for the Eastern District of California.
2. The matters that remain unresolved in this action are: (a) the failure of defendants to respond to the court's order to show cause, (2) the failure of defendants to file an answer and status report, (3) appropriate sanctions to be levied against defendants, including whether to require reimbursement for the expenses associated with the travel and appearance of plaintiffs' counsel at the last hearing given defendants failure to inform the court or plaintiffs of the bankruptcy filing, and (4) defendants' motion for default judgment. These matters shall be addressed upon termination of defendants' bankruptcy proceeding or an order granting relief from the automatic stay.
3. The parties shall notify the court within ten (10) days of the resolution of the bankruptcy proceedings.