GAF Holdings, LLC v. Rinaldi (In re Farmland Industries, Inc.)
- Citation:
- Eight Circuit Court of Appeals, No. 09-3049 (April 4, 2011)
- Tag(s):
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- Ruling:
- The Court of Appeals ruled that an unsuccessful bidder at a bankruptcy auction does not have standing to seek damages based upn the results of the sale where the debtor determined that the bidder was not a qualified bidder and the bidder did not challenge that designation. The Court further ruled that where the unsuccessful bidder alleges a claim based on a fraud on the court, the bidder does not have standing if the bidder asserts a claim for damages, because fraud on the court is a means to obtain equitable relief where there is no adequate remedy at law.
- Procedural context:
- Appeal from a BAP decision affirming the Bankruptcy Court decision dismissing plaintiff's complaint for lack of standing and failure to state a claim.
- Facts:
- Plaintiff submitted a bid for the debtor's assets. Bid was rejected and not treated as a qualified bid because it was not accompanied by a deposit and other required information under the approved sale procedures. Plaintiff did not contest debtor's determination that the bid was not a qualified bid. The Bankruptcy Court approved the sale to a third party and made a good faith finding. Plaintiff did not challenge the sale or sale order. Subsequently, Plaintiff filed a motion under FRCP 60(b) to set aside the sale order on the grounds of improper collusion. The Bankruptcy Court denied the motion and plaintiff did not appeal. Plaintiff then commenced an adversary proceeding seeking damages based upon interference with plaintiff's expectancy of benefits in purchasing the assets. The Bankruptcy Court dismissed based upon preclusion and lack of standing. Plaintiff then appealed.
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