In re Revstone Industries LLC, et al.

Case Type:
Case Status:
16-2167 (3rd Circuit, Jun 06,2017) Not Published
Appellate standing in bankruptcy is limited to “persons aggrieved” by an order of the bankruptcy court. Appeals are limited to persons ‘whose rights or interests are directly and adversely affected pecuniarily by an order or decree of the bankruptcy court.' Appellant is not a "person aggrieved" by the discharge injunction contained in the confirmation order and, therefore, lacked standing to challenge it on appeal. Appellants' speculation that federal and state taxing authorities may pass the Debtors' liability through to appellant is an insufficient interest to afford appellate standing.
Procedural context:
On appeal from the U.S. District Court for the District of Delaware
Ascalon Enterprises, LLC (“Ascalon”) is the Debtor/Revstone’s sole member and a non-creditor. Ascalon designated Revstone as an S corporation, and thus any tax liability would pass from Revstone to Ascalon. Ascalon claims that Revstone incurred millions of dollars in unpaid federal and state taxes arising from asset sales during bankruptcy. For the first time, Ascalon argued in its reply brief on appeal that it “is justly apprehensive that, if Revstone discharges its tax liability, the taxing authorities might seek to impose liability on Ascalon, despite the election it made.” This argument was deemed waived. However, even if properly raised, Ascalon’s “apprehension” about what the taxing authorities “might” do, is not sufficiently direct to establish appellate bankruptcy standing. It is “too contingent” to establish standing.
SMITH, Chief Judge (author), JORDAN and ROTH

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