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Bankruptcy Stay Partially Lifted in Hurricane Rita Evacuation Bus Fire Multidistrict Litigation

On September 23, 2005 a bus carrying elderly passengers from a nursing home in Bellaire, Texas headed to Dallas, Texas caught fire on IH – 45. As a result of the fire, 23 passengers died and several others were injured. Suits were filed in several counties by families of the deceased and the injured passengers. All the cases were transferred to 206th Judicial District Court of Hidalgo County, Texas. The Law firm of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner represents several plaintiffs and is on the Plaintiffs Steering Committee.

After three years of litigation, Motor Coach Industries, Inc. (MCI) the manufacturer of the subject bus, recently filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware. As a result of the filing, the Texas litigation was automatically stayed.

However, on December 2, 2008 Judge Rose Reyna signed an order compelling mediation in the case after the parties agreed to modify the automatic stay to allow the continuation of a pre-petition mediation. This followed the signing of a similar order by the United States Bankruptcy Court for the District of Delaware to allow withdrawal of the automatic stay without prejudice. The case is currently set for mediation on December 11, 2008.

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