MEMORANDUM AND ORDER Plaintiffs Hatteras Enterprises Inc. (“Hatteras”), Debra Mattes (“Mattes”), and MadMack LLC (“MadMack”) brought this action against Defendants Forsythe Cosmetic Group, Ltd. (“FCG”), Harriet Rose 2009 Irrevocable Trust (the “Trust”), Harriet Rose, and Michael Rose alleging, inter alia, fraud and breach of contract arising out of a 2012 agreement for the rights to Plaintiffs’ color-changing nail polish. (ECF No. 1.) Following unsuccessful settlement discussions, the parties consented to a Bench Trial before the undersigned to address the remaining claims in this case.1 (See ECF Nos. 111, 122, 123, 129.) On March 19, 2024, Defendants advised the Court that Defendant FCG filed a Chapter 11 Bankruptcy case in the Bankruptcy Court for the Eastern District of New York, Case No. 24-70997. (ECF Nos. 130-131.) Upon FCG’s filing of the bankruptcy petition, the bankruptcy stay set forth in 11 U.S.C. §362(a) as applied to FCG came into place immediately.2 The Court subsequently directed the parties to file letters indicating their position on the automatic stay and whether it extends to the non-debtor Defendants — Harriet Rose 2009 Irrevocable Trust, Harriet Rose, and Michael Rose (hereafter, “the Non-Debtor Defendants”). (ECF No. 130.) Plaintiffs’ position is that the automatic stay does not apply to any defendant except FCG and should not be extended to any other party in this action. (ECF No. 132.) By contrast, Defendants maintain the entire action must be stayed as a result of the bankruptcy filing of FCG. (ECF No. 131.) For the foregoing reasons, the Court finds the Non-Debtor Defendants “are integral parties of the [remaining] claims set forth in the Complaint,” and “invokes its discretionary authority to stay the proceedings” while the bankruptcy proceeding against FCG “get[s] underway.” See ECF No. 31 at 2; Plaintiff Funding Holding, LLC v. Blue Ocean Partners LLC, No. 22 CIV. 4094 (KPF), 2023 WL 3506142, at *2-3 (S.D.N.Y. Apr. 18, 2023). BACKGROUND The Court assumes the parties’ familiarity with the factual background and procedural history of this case, as outlined in Judge Brown’s August 25, 2022 Memorandum and Order granting in part and denying in part Defendants’ Motion for Summary Judgment. (ECF No. 111.) On March 19, 2024, Counsel for Defendant advised the Court that Defendant FCG filed for bankruptcy, and the Court directed the parties to advise the Court on their respective positions as to whether the automatic stay applied to FCG as a result of the bankruptcy proceeding also applied to the Non-Debtor Defendants. (ECF No. 130.) On March 29, 2024, Defendants indicated their position is that this entire action must be stayed as a result of the bankruptcy filing of FCG because “the issues involved in this case are significantly intertwined as between FCG and the other Defendants and because the continuation of this action cannot occur without affecting FCG and property of the bankruptcy estate[,]” as Plaintiffs’ Complaint “ (i) seeks joint and several liability against the Defendants; (ii) seeks declaratory relief as to rights with respect to intellectual property (“IP”) in which FCG has an interest; and (iii) asserts alter ego arguments as to Harriet Rose and Michael Rose, individuals.” (ECF No. 131.) Specifically, Defendants contend that “the entire action must be stayed as the relief sought would impact property of the bankruptcy estate, in particular FCG’s interest in the IP” and Defendants are otherwise “integral parties of the claims set forth in the Complaint.” (Id. at 2.) On March 12, 2024, Plaintiffs filed their letter articulating their position concerning the automatic stay. (ECF No. 132.) Plaintiffs argue that Section 362(a)(1) provides for an automatic stay for actions proceeding against the debtor, and Defendants have not otherwise demonstrated “unusual circumstances” warranting the application of the stay to the Non-Debtor Defendants. (Id. at 1.) Plaintiff maintains that the continuation of this litigation against the Non-Debtor Defendants “will have no impact on the bankruptcy estate” and each Non-Debtor Defendant “is independently liable for the causes of action asserted against them.” (Id. at 2.) DISCUSSION “The plain language of Section 362(a)(1) of the bankruptcy code limits the extension of an automatic stay to a ‘proceeding against the debtor.’” Plaintiff Funding Holding, LLC v. Blue Ocean Partners LLC, No. 22 CIV. 4094 (KPF), 2023 WL 3506142, at *1 (S.D.N.Y. Apr. 18, 2023) (quoting 11 U.S.C. §362(a)(1)) (“[C]ourts will generally not extend the automatic stay of proceedings pursuant to Section 362(a)(1) to non-debtor co-defendants”). However, “[in] ‘unusual situations[,]‘ a court may extend the automatic stay to non-bankrupt co-defendants of the debtor.” Id. (quoting Variable-Parameter Fixture Dev. Corp. v. Morpheus Lights, Inc., 945 F. Supp. 603, 608 (S.D.N.Y. 1996)). Relevant here, “unusual” circumstances justifying a stay against “non-debtor officers and principals of a debtor corporation” include “when the debtor and non-debtor are ‘so bound by statute or contract that the liability of the non-debtor is imputed to the debtor by operation of law.’” Id. (quoting Variable-Parameter, 945 F. Supp. at 608). “The question is whether the action against the non-debtor is sufficiently likely to have a material effect upon reorganization efforts, [such] that debtor protection requires an exception to the usual limited scope of the stay.” Id. (internal citations omitted); Queenie, Ltd. v. Nygard, 321 F.3d 282, 288 (2d Cir. 2003) (internal quotations omitted) (“The automatic stay can apply to non-debtors, but normally does so only when a claim against the non-debtor will have an immediate adverse economic consequence for the debtor’s estate. Examples [include] actions where there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant.”). Specifically, bankruptcy courts have extended the automatic stay to non-debtor defendants “where colorable risk that [the] proceeding will later be enjoined by the bankruptcy court under Section 105(a), which allows injunctions where claims ‘threaten to thwart or frustrate the debtor’s reorganization efforts’ or ‘when the claims against [the debtor] and the claims against the [non-debtors] are inextricably interwoven, presenting common questions of law and fact, which can be resolved in one proceeding.’” Plaintiff Funding Holding, LLC, No. 22 CIV. 4094 (KPF), 2023 WL 3506142, at *2 (quoting In re The 1031 Tax Grp., LLC, 397 B.R. 670, 684 (Bankr. S.D.N.Y. 2008)) (collecting cases); In re Ionosphere Clubs, Inc., 111 B.R. 423, 434 (Bankr. S.D.N.Y. 1990), aff’d in part sub nom. In re Ionosphere Clubs Inc., 124 B.R. 635 (S.D.N.Y. 1991).3 “Where the automatic stay does not apply, a [federal district court] court may still invoke its discretionary authority to stay the proceedings” against the non-debtor co-defendants, “but [t]he proponent of the stay bears the burden of demonstrating that such a stay is justified.” MBE Capital Partners LLC v. AVPOL Int’l LLC, No. 17 Civ. 5992 (PGG), 2019 WL 568587, at *3 (S.D.N.Y. Feb. 11, 2019) (internal citations omitted); Fagan v. Republic of Austria, No. 08 Civ. 6715 (LTS) (JCF), 2009 WL 1423338, at *4 (S.D.N.Y. May 19, 2009) (“Courts generally consider five factors in determining whether to stay a proceeding, including: (i) the private interests of the plaintiffs in proceeding expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if delayed; (ii) the private interests of and burden on the defendants; (iii) the interests of the courts; (iv) the interests of persons not parties to the civil litigation; and (v) the public interest.”). Here, the remaining claims against FCG and the Non-Debtor Defendants to be addressed at the forthcoming Bench Trial “share a similar factual nexus and are closely related in several respects.” Id. Specifically, Plaintiffs assert claims against all “Defendants” — including Michael Rose, FCG’s former president (ECF No. 109-1 at
