Gluckstadt Holdings, L.L.C. v. VCR I, L.L.C.
- Summarized by J. Newman , Newman & Newman
- 5 years 8 months ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- No. 18-60368 (5th Circuit, May 01,2019) Published
- Tag(s):
-
- Ruling:
- AFFIRM the district court’s judgment affirming the bankruptcy court’s decision granting the Trustee’s motion to approve auction and for authority to sell certain real property of the bankruptcy estate of VCR. DENIED the Trustee’s motion to dismiss the appeal as moot under 363(m)..
- Procedural context:
- After conducting a trial, the bankruptcy court overruled Gluckstadt’s objection and granted the Motion. Gluckstadt timely appealed that decision to the district court, which affirmed the bankruptcy court’s judgment. Gluckstadt then timely appealed to this court. We have jurisdiction over this appeal under 28 U.S.C. § 158(d)(1). Gluckstadt’s motions for stay of the auction and sale pending appeal were denied by the bankruptcy and district courts, as well as this court.
- Facts:
- On June 21, 2012, VCR filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code. The bankruptcy court later converted the case to a Chapter 7 bankruptcy proceeding and appointed a Trustee. On November 4, 2016, the Trustee filed a motion to approve auction and for authority to sell certain real property of the bankruptcy estate, free and clear of liens, interest, encumbrances, and claims (“Motion”), pursuant to 11 U.S.C. § 363 of the Bankruptcy Code.1 In the Motion, the Trustee requested authority from the bankruptcy court to conduct a public auction for the sale of four tracts of land located in Madison County, Mississippi.
With respect to the fourth tract, the Trustee acknowledged that, while the case was pending as a Chapter 11 proceeding, Gluckstadt and the Debtor (VCR) entered into an “Agreed Order” in which the Debtor agreed to sell the fourth tract of land to Gluckstadt for $612,500.00. Although the Order provided that the Debtor “shall file and notice a motion for authority to sell the real property, free and clear of all liens, claims and interest, to [Gluckstadt], for $612,500.00, as soon as possible,” the Trustee explained that no motion for authority to sell the fourth tract to Gluckstadt had ever been filed and that he had not supported Gluckstadt’s proposed purchase of the property “without an open bid process.” The Trustee stated that “[t]he opening bid for Tract No. 4 shall be for $612,500.00 to Gluckstadt,” but that he was “under no obligation to sell to [Gluckstadt] unless the Opening Bid of [Gluckstadt] [was] the highest and best bid.” The Trustee requested authority to sell the property to the highest bidder, which sale would be “fair and reasonable” and “in the best interest of the bankruptcy estate.”
Gluckstadt objected to the Motion, asserting that the Motion constituted a breach of the Agreed Order. Gluckstadt argued that the Agreed Order constituted a settlement agreement that was “fair and equitable to the Debtor” and bound the Trustee to file a motion for authority to sell the property to Gluckstadt for $612,500.00, subject only to the objection of creditors not participating in the settlement. Gluckstadt contended that the Agreed Order did not contemplate the auction process.
- Judge(s):
- STEWART, Chief Judge, and DAVIS and ELROD, Circuit Judges
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