Mandel v. Mastrogiovanni Schorsch & Mersky, et al.
- Citation:
- NOT FOR PUBLICATION - Slip Opinion Case No. 15-40864 (5th Cir. Mar. 7, 2016)
- Tag(s):
-
- Ruling:
- REVERSED and REMANDED district court's dismissal (as moot) of an appeal of an order allowing claims against the bankruptcy estate, finding that debtor was "person aggrieved" by the bankruptcy court's claim allowance order. While a debtor-out-of-possession will "rarely have a sufficient interest to challenge a bankruptcy court order," the debtor in this case was sufficiently aggrieved by the order because it would otherwise serve as res judicata in future litigation. This problem was highlighted by the claimants' objection to the debtor's discharge, which would allow them to collect the claims from him, personally, without giving him the opportunity to object or appeal the order. For that reason, the Court of Appeals concluded that the debtor had sufficient interests in the order to appeal it.
- Procedural context:
- Appeal from the U.S. District Court of the Eastern District of Texas, which dismissed the debtor's appeal of the bankruptcy court's order allowing certain claims, concluding that the debtor lacked standing to appeal such orders.
- Facts:
- Before the debtor filed this individual chapter 11 bankruptcy case, he was involved in litigation concerning a company he owned jointly with another individual. A dispute arose over the representation of the company, and Rosa Orenstein was appointed as receiver for the company. She retained the law firm of Mastrogiovanni Schorsch & Mersky (MSM) to represent her in the state court litigation, and the debtor agreed to share litigation costs the other owner of the company. During the course of the litigation, the debtor filed this bankruptcy. Orenstein and MSM filed claims against his estate for their legal fees incurred in the state court litigation. Their claims were allowed, and the debtor appealed. While the appeal was pending, a chapter 11 trustee was appointed, and Orenstein/MSM filed lawsuits against the debtor objecting to his discharge. Before the dischargeability complaint was adjudicated, the district court dismissed the appeal as moot, concluding that the debtor-out-of-possession lacked standing to appeal the bankruptcy court's claim allowance orders.
- Judge(s):
- Per Curiam (Stewart, Owen and Costa)
ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!
