In re: Erick Etienne LaGroux

Case Type:
Case Status:
No. 19-8024; 2020 WL 3397838 (6th Cir. BAP 2020) (6th Circuit, Jun 19,2020) Published
Appellate Court lacks authority to consider issue not considered or ruled on by Lower Court.
Procedural context:
LLC filed adversary proceeding against Chapter 7 Trustee, as successor to Debtor's LLC interest, d=seeking delcartion of Chatper 7 Trustees rights including that Chapter 7 Trustee held only Economic INterests in LLC where Debtor had withdrawn from governance pre-ptitoin; and that Chapter 7 Turstee was bound by LLC Opearting AGreement regardign buyout and first-refusal provisoins. Bankrptucy Coufrt concluded that hapter 7 Trustee was bound by Oerating Agreement. Trustee appealed continding that Court used incorrect method to value Estate's Interest in LLC. Appeal dismissed.
Debtor owned an interest in an LLC from which he had withdrawn pre-petition. On filing. Chapter 7 Trustee succeeded to Debtor's rights. LLC sought declaration that Trustee held only economic rights and not governance rights; and that Trustee was bound by the Operating Agreement's provisions regarding buyout an first-refusal. Court entered declaratory judgment granting the sought relief. Trustee appealed but did not contest either finding that Trustee held only economic rights or that Trustee was bound by buyout and first-refusal provisions, but argued that Bankruptcy Court used incorrect method to value LLC interest, relying solely on State Law rather than Federal Law. Appellate Court concluded that Bankruptcy Court did not value LLC interest or express opinion on how that would be done and had specifically deferred questions of methodology for a subsequent hearing. As issue of methodology had not been argued or decided below, Appellate Court would effectively be giving advisory opinion which Courts are prohibited from doing. Appeal dismissed as lacking any justiciable issue.

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