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Note: Following the entry of a USD 1,476,340 final judgment in favor of Allegis Group, Inc. and other plaintiffs (Plaintiffs), Justin Jordan, joined by two other defendants (Defendants), moved to stay the enforcement of the judgment pending appeal. Defendants originally sought to post a “corporate guaranty” valued at 100% of the judgment award, which Plaintiffs opposed and the trial court rejected on the basis that Defendants “had not demonstrated a sufficient basis for deviating from the Court’s general requirement that [Defendants] file a supersedeas bond equaling 120% of the Final Judgment amount plus costs”. Accordingly, Defendants proposed an irrevocable letter of credit valued USD 1,772,108. After apparently satisfying “a handful of concerns” raised by Plaintiffs, Defendants filed a Corrected Motion to Stay Enforcement Pending Appeal that Plaintiffs did not oppose. The United States District Court for the District of Maryland, Russell, J., granted Defendants’ motion.

The Corrected Motion included a “revised” letter of credit issued by Access National Bank (Issuer) with Allegis Group Inc. as beneficiary and Zachary Piper, LLC as applicant, Defendants’ current employer. The Judge noted that U.S. Fed. R. Civ. Pro 62(b) provides that an appellant “may obtain a stay by providing a bond or other security”. Once the security is judicially approved, a stay takes effect. Noting that letters of credit are commonly approved forms of security and that the Corrected Motion went unopposed, the Judge approved the provided LC and stayed execution of the final judgment. The Judge also detailed the subsequent procedure pertaining to the LC; thus, if the appellate court were to affirm the final judgment, in whole or in part:

the stay granted herein shall extend for an additional sixty (60) days following the issuance of the mandate from the Fourth Circuit [appellate court] to permit Defendants to voluntarily satisfy the full amount of the affirmed Final Judgment. If, during that sixty-day period, Defendants fail to voluntarily satisfy the full amount of the affirmed Final Judgment, Plaintiffs (jointly and severally) may apply to this Court for, and the Court will enter, an Order granting Plaintiffs the right of execution against the ILOC and directing [Issuer] to pay, upon presentment of such Order, the affirmed amount of the Final Judgment to Plaintiffs. If, on the other hand, during such sixty-day period, Defendants voluntarily satisfy the full amount of the Final Judgment or if the Fourth Circuit reverses or vacates the Final Judgment in its entirety, Defendants may apply to this Court for, and the Court will enter, an Order releasing Defendants’ and [Issuer]’s obligations under the ILOC. Upon the presentment of such Order to [Issuer], the ILOC will expire and all obligations arising thereunder shall be released.

[MJK]

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