In re Emmons-Sheepshead Bay Development LLC

518 B.R. 212, 2014 U.S. Dist. LEXIS 134094, 2014 WL 4802037
CourtDistrict Court, E.D. New York
DecidedSeptember 23, 2014
DocketNo. 13-CV-5430 (RRM)
StatusPublished
Cited by13 cases

This text of 518 B.R. 212 (In re Emmons-Sheepshead Bay Development LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Emmons-Sheepshead Bay Development LLC, 518 B.R. 212, 2014 U.S. Dist. LEXIS 134094, 2014 WL 4802037 (E.D.N.Y. 2014).

Opinion

MEMORANDUM AND ORDER

ROSLYNN R. MAUSKOPF, District Judge.

This is an appeal arising from the confirmation of a plan of reorganization under Chapter 11 of the Bankruptcy Code. Appellant-Creditors Albert Wilk, Alex Dik-man, and Metropolitan Estates, Inc., as well as Emmons Ave, LLC in a derivative capacity (collectively, “Metropolitan”), appeal from an August 28, 2013 order of the United States Bankruptcy Court for the Eastern District of New York (Elizabeth S. Stong, J.). That order denied Metropolitan’s motion denying reconsideration of the bankruptcy court’s order, dated July 3, 2013, confirming the plan of Appellee-Debtor Emmons-Sheepshead Bay Development, LLC (“the debtor”). For the reasons below, the appeal is DENIED.

Background

The factual and procedural history underlying this appeal is somewhat lengthy, and the parties’ familiarity with it is presumed. The crux of the dispute can be stated succinctly. Metropolitan is an investor in a Brooklyn condominium development that filed for bankruptcy protection under Chapter 11. As a creditor and interested party, Metropolitan aggressively participated in the bankruptcy proceedings throughout. Directly relevant to this appeal, Metropolitan filed a single, limited objection to the debtor’s proposed plan of reorganization, claiming that the plan should not be confirmed because it failed to meet the requirement, under 11 U.S.C. § 1129(a)(3), of having been “proposed in good faith.” Metropolitan was granted certain discovery in connection with its objection. On June 27, 2013, the bankruptcy court held an evidentiary hearing on the debtor’s application for confirmation of the plan. Through counsel, Metropolitan raised concerns regarding outstanding discovery issues, but the bankruptcy judge pressed ahead with the confirmation hearing. Metropolitan’s counsel fully participated by cross-examining the debtor’s principal, calling its own witness, and arguing its case. The bankruptcy court overruled Metropolitan’s objection, finding good faith, and confirmed the plan. A written order settling the hearing and confirming the plan was filed on July 3, 2013 and entered on July 8, 2013. Metropolitan did not appeal the confirmation order.

[216]*216Instead, on July 17, 2013, Metropolitan, newly represented by its third attorney, moved pursuant to Rules 9023 and 9024 to vacate the confirmation order. In their motion, Metropolitan did not raise its good faith objection as pressed during the confirmation hearing. Rather, on reconsideration, Metropolitan raised for the first time two new arguments: first, that it had been deprived of procedural due process at the confirmation hearing, and second, that the confirmation was unlawful because the condominium was not, in actuality, property of the bankruptcy estate but rather property that was held or should be held in a constructive trust, an issue that was the subject of pending litigation in state court. On August 15, 2013, the bankruptcy court held a hearing on Metropolitan’s reconsideration motion, which the court denied orally at the hearing, and subsequently issued a written summary order to that effect on August 28, 2013.

On September 3, 2013,. Metropolitan filed a notice of appeal from the bankruptcy court’s denial of its motion for reconsideration. That appeal — in which Metropolitan revisits the due process and constructive trust arguments that it raised for the first time in seeking reconsideration — is now before this Court. For the reasons set forth below, the Court finds that those arguments are procedurally and substantively meritless. Accordingly, the order of the bankruptcy court denying Metropolitan’s motion for reconsideration is hereby AFFIRMED.

The Record on Appeal

As an initial matter, the Court finds the record on appeal woefully incomplete, as it does not contain the transcript of the bankruptcy court’s August 15, 2013 hearing and oral ruling on Metropolitan’s motion for reconsideration. Federal Rule of Bankruptcy Procedure (“Bankruptcy Rule”) 8006 requires an appellant (here, Metropolitan), within fourteen days of filing a notice of appeal, to file with the bankruptcy court and serve on the appel-lee a “designation of the items to be included in the record on appeal and a statement of the issues to be presented.” Bankruptcy Rule 8006. Within fourteen days after the service of the appellant’s designation and statement, the appellee “may file and serve on the appellant a designation of additional items to be included in the record on appeal.” Id.

In addition to the items designated by the parties, the record “shall” contain “the judgment, order, or decree appealed from, and any opinion, findings of fact, and conclusions of law of the [bankruptcy court].” Id. Bankruptcy Rule 8006 directs an appellant to (1) “provide to the [bankruptcy court] clerk a copy of the items designated,” and (2) to arrange for any transcripts to be delivered to the clerk. Id. Specifically, an appellant must “file with the [bankruptcy court] clerk a written request for the transcript and make satisfactory arrangements for payment of its cost.” Id. The Rule also instructs all parties to “take any other action necessary to enable the [bankruptcy court] clerk to assemble and transmit the record.” Id.

Thus, “[w]hile [Bankruptcy] Rule [8006] does not expressly require that the ‘record on appeal’ include all transcripts of the proceedings below, its provisions make clear that those documents which include ‘findings of act’ or ‘conclusions of law of the court’ are deemed part of the record, including any transcripts, for which the Rule makes express cost provisions.” In re Harris, 464 F.3d 263, 269 (2d Cir.2006); see In re McCarthy, 230 B.R. 414, 417 (9th Cir. BAP 1999) (“Whenever findings of fact and conclusions of law are rendered orally on the record, it is mandatory that an appellant designate the transcript under Rule 8006. There is no other way for [217]*217an appellate court to be able to fathom the trial court’s action”).

The bankruptcy court specifically advised the parties of these procedural rules in a document entitled, “Notice to Parties Concerning Appeal.” That notice expressly called the parties’ attention to Bankruptcy Rule 8006, admonishing them that it was their duty “to insure that the record on appeal is complete,” and that an “incomplete record will otherwise be transmitted, for disposal as the District Court shall determine.” (No. 12-BK-46321, Doc. No. 145.)1

Metropolitan has failed to comply with Bankruptcy Rule 8006.2 Metropolitan did not ensure the preparation of the bankruptcy court’s August 15, 2013 hearing on its motion for reconsideration. To be sure, the record on appeal includes the bankruptcy court’s written order, dated August 28, 2013, denying Metropolitan’s motion for reconsideration. (See Doc. No. 1 (Notice of Appeal); id. (Att. 57 (8/28/13 Order)).) But that August 28th order states nothing more than the fact that Judge Stong held a hearing on August 15, 2013 to consider Metropolitan’s motion, and was denying that motion “in accordance with the determination by this Court and record of the hearing held” on August 15th. (Id.)

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Cite This Page — Counsel Stack

Bluebook (online)
518 B.R. 212, 2014 U.S. Dist. LEXIS 134094, 2014 WL 4802037, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-emmons-sheepshead-bay-development-llc-nyed-2014.