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Note: To stay the execution of a judgment against it, Middleton Motors, Inc. (Judgment Debtor) moved for a stay of execution of the judgment entered in favor of Lindquist Ford, Inc. (Judgment Creditor) pending appeal which was granted by the U.S. District Court of the Western District of Wisconsin, Crabb, J. The condition of the stay of execution was that Judgment Debtor provide an irrevocable letter of credit in favor of the Judgment Creditor in the amount of US$193,545.23.

The Judge noted that Rule 62(d) of the Federal Rules of Civil Procedure provided for a stay to be secured by posting a supersedeas bond. She stated, however, that "[a]lthough the statute appears absolute, courts have used their discretion to allow the securing of a judgment by means other than supersedeas bonds, in situations in which a substitute security appears to be sufficient to protect the judgment." Having reviewed the terms of the LC, the Judge noted that the amount available under the LC was in excess of the judgment (presumably to allow for interest) and stated that she was satisfied that the proposed LC "would provide adequate protection for the judgment obtained by [Judgment Creditor]."

The Judge noted that, while the LC expired in one year and the appeal might take longer, the Judgment Creditor/Beneficiary would have been able to draw on the LC if it had not been replaced by a new LC before it expires.

[JEB/krp]

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