In Re Burgess

234 B.R. 793 (D. Nev. 1999)

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Nature of the Case

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Facts

P has operated a legal brothel in Storey County, Nevada. On July 30, 1997, P filed Chapter 11. On June 2, 1998, the Storey County Commission and the Sheriff of Storey County held a hearing to express their displeasure with the debtor's continuing association with the Hell's Angels motorcycle ['club.' At the hearing, the Commissioners revoked P's brothel license. P ceased operating his business as a brothel and immediately sought relief in the bankruptcy court. P argued that the County's action was a violation of the automatic stay, and in the alternative, for an injunction pursuant to 11 U.S.C. § 105. The bankruptcy court denied relief, but on July 7, 1998, Judge Hagen granted a preliminary injunction in P's civil rights case, enjoining the County from enforcing the revocation of the license. Before the court is P's appeal from the bankruptcy court's order, filed June 17, 1998. The County argues that the appeal should be dismissed as moot, in light of the injunction. P contends that the appeal is not moot, since should it be found that the County did violate the automatic stay, P would be entitled to damages for the period of time the brothel was closed--that is, from June 2 to July 7, 1998. The bankruptcy court held that the brothel license was not 'property,' but rather a 'personal privilege.' The County now argues that the question of whether the license is property is completely irrelevant.