- Opportunity Finance, LLC, et al. v. Kelly, Case No. 15-2060 (8th Cir. May 16, 2016)
- The harm suffered by the net winners/lenders by the consolidation order, if any, was indirect and therefore they were not persons aggrieved. Therefore, the lenders/net winners lacked standing to appeal the consolidation order and the dismissal of the appeal by the district court is affirmed.
- Procedural context:
- On appeal from the United States District Court for the District of Minnesota dismissing the appeal by net winners/lenders of an order of the United States Bankruptcy Court for the District of Minnesota substantively consolidating the chapter 11 estates of Petters Company, Inc. and eight associated special-purpose entities.
- Arising out of the Thomas Petters Ponzi scheme, the chapter 11 Trustee (Kelley) filed a motion for substantive consolidation of the chapter 11 estates of Petters Company, Inc. and eight associated special purpose entities. The bankruptcy court granted the consolidation for all purposes substantive and administrative. Two lender/net winners in the scheme filed an appeal of the substantive consolidation. Kelley challenged the appeals claiming that the lenders were not persons aggrieved by the consolidation order. Lender/net winners argued that because the substantive consolidation resulted in the elimination of Bankruptcy Code based defenses in any adversary proceedings brought against them by the Trustee, they were aggrieved by the consolidation order.
- Smith, Bye, Benton
3355 in the system
2 Being Processed