DVI Receivables XIV, LLC v. Rosenberg (In re Rosenberg)

Citation:
DVI Receivables XIV, LLC v. Rosenberg (In re Rosenberg), Case No. 11-14823 (11th Cir. July 6, 2012) (unpublished) (per curiam)
Tag(s):
Ruling:
Affirming district court's order order dismissing involuntary petition with prejudice because Appellants failed to prove reversible error. While the Eleventh Circuit's 2 page decision affirms the district court's order summarily without providing reasoning, the district court's decision can be found at DVI Receivables, XIV v. Rosenberg (In re Rosenberg), Case No. 10-cv-24347-KMM (S.D. Fla. Sept. 28, 2011) [Document No. 11], pursuant to which the district court affirmed the bankruptcy court's order dismissing the involuntary chapter 7 petition against the debtor because the original petitioning creditors were not the real parties in interest and the guarantee claims against the Debtor were the subject of bona fide dispute.
Procedural context:
Appellants, the original petitioning creditors, filed an involuntary chapter 7 petition against the debtor. The bankruptcy court granted the debtor's motion to dismiss. The distict court affirmed the bankruptcy court's order on all counts (except one).
Facts:
Appellants/original petition creditors were Special Purpose Entities (SPEs) that, as lessors under master leases had granted all of their rights to the indenture trustee under notes issued through securitization transactions. After the successor servicer (Lyon) for the master lease commenced suit against the debtor, among others, Lyon entered into a global settlement agreement, pursuant to which the debtor provided limited guaranties. The Bankruptcy Court and District Court concluded that the appellants/original petitioning creditors were not the real parties in interest because the obligations under the limited guaranty ran to the special servicer who acted as agent for the Trustee, not the SPVs. Moreover, the debts were consolidated under one creditor (defeating the numerosity requirement for filing an involuntary petition). Furthermore, the validity of the limited guaranty was the subject of a bona fide dispute under pending litigation brought by the debtor.
Judge(s):
Edmonson, Carnes and Hull.

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