- A defendant in an adversary proceeding was not a "person aggrieved" by the bankruptcy court's order extending the litigation bar date, and thus could not appeal such order.
- Procedural context:
- The debtor was a car dealership that sought reorganization under Chapter 11. The liquidating agent (appointed pursuant to the plan) brought suit against Atkinson past the time provided in the debtor's plan. Atkinson objected, and thereafter the liquidating agent moved the bankruptcy court to modify the plan and extend the litigation bar date.
- The debtor successfully proposed a plan with a litigation bar date in February of 2010. The plan further appointed a liquidating agent that was charged with pursuing all adversary proceedings on behalf of the estate. The liquidating agent filed an adversary proceeding against Atkinson on December 30, 2011, nearly two years after the litigation bar date. Atkinson then moved to enjoin the liquidating agent from prosecuting the action. In response, the liquidating agent moved the bankruptcy court to modify the plan (and, in that modifiied plan, extend the litigation bar date). The bankruptcy court granted the request to modify the plan on the ground that the plan had not been substantially consummated. The debtor then filed a modified plan, which included an extended litigation bar date. The plan was confirmed. Atkinson appealed the confirmation. The appeal was first heard at the U.S. District Court for the Middle District of Florida, which affirmed the confirmation. Atkinson then appealed to the Eleventh Circuit. The Eleventh Circuit found that Atkinson did not have standing to appeal the confirmation of the debtor's modified plan. In doing so, the Court relied on the jurisprudential "person aggrieved" doctrine, which limits the right to appeal a bankruptcy court order to those parties having a direct and substantial interest in the question being appealed. The Eleventh Circuit has defined this to mean only thos indiviudals who are directly, adversely and pecuniarily affected by a bankruptcy cour order. In finding that Atkinson was not a person aggrieved, the Eleventh Circuit relied on other Federal Appellate decisions finding that bankruptcy court orders that merely allow adversary proceedings to move forward will not satisfy the "person aggrieved" standard. Particularly, the Eleventh Circuit agreed with those decision and found that "a party is not aggrieved, for the purposes of appealing from a bankruptcy court order, when the only interest allegedly harmed by that orderis the interest in avoiding liabiulity from an adverary proceeding." The Eleventh Circuit further found that a person whose interests the bankruptcy code does not seek to regulate, which further disqualified Atkinson. That being the case, the Eleventh Circuit found that Atkinson had no standing to appeal, and thus affirmed the lower court's decision.
- Wilson, Pryor, and Rosenbaum
Analysis: Bankrupt Borrowers Won’t Forfeit Coronavirus Aid Payments to Creditors Under Stimulus Package
3060 in the system
1 Being Processed