In re U.S. Truck Co.

47 B.R. 952, 1985 U.S. Dist. LEXIS 21470
CourtDistrict Court, E.D. Michigan
DecidedMarch 22, 1985
DocketBankruptcy Nos. 82-03561, 84-CV-3920
StatusPublished

This text of 47 B.R. 952 (In re U.S. Truck Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re U.S. Truck Co., 47 B.R. 952, 1985 U.S. Dist. LEXIS 21470 (E.D. Mich. 1985).

Opinion

ORDER VACATING ORDER AND OPINION APPOINTING TRUSTEE

PHILIP PRATT, District Judge.

On August 30, 1984 and September 7, 1984, the Bankruptcy Court entered Findings of Fact and Conclusions of Law Appointing Trustee, reported In re U.S. Truck, 44 B.R. 311 (Bankr.E.D.Mich.1984). The motion to appoint the trustee was initially brought by the Creditors’ Committee. The Bankruptcy Court had determined that the debtor-in-possession’s relationship with the Central Group, a term used to represent several related trucking companies,1 and other circumstances would preclude the debtor from implementing a feasible plan of reorganization. This decision was immediately appealed to this Court and the appointment of the trustee was stayed pending the submission of briefs and arguments. On November 1, 1984, the Court heard oral arguments concerning U.S. Truck’s motion to stay the appointment during the appeal period. The Court took the matter under advisement. The Court also instituted a series of status conferences with the parties in an effort to resolve the case.

During the following month the debtor and the parties made substantial progress toward a resolution of differences and formulating a feasible plan of reorganization. On December 11, 1984, the Court withdrew the reference to the Bankruptcy Court because circumstances in the Bankruptcy Court threatened the progress of the proceedings.2 Shortly thereafter the debtor and the Creditors’ Committee reached agreement on a reorganization plan. On December 14, 1984, the Court approved the Fourth Amended Disclosure Statement. On February 4, 1985, the Court confirmed the Fifth Amended Plan of Reorganization, reported at 47 B.R. 932 (E.D.Mich.1985).

Thereafter, Central Transport filed motions to vacate the order appointing the trustee and withdrawing or suppressing publication of the order and opinion. The debtor in possession joined in the motions. The Creditors’ Committee, Central States, Southeast and Southwest Areas Pension and Health and Welfare Funds and the Teamsters National Freight Industry Negotiating Committee objected to these motions and oral arguments were heard on March 18, 1985.

The responding parties first argue that Central Transport has no standing to raise the issues, since having been denied permission to intervene by the Bankruptcy Judge, it is not a party to the litigation. However, there can be no dispute that the debtor in possession who joined in the motions does have standing. Moreover, the question of standing need not be decided. By virtue of the motions, this Court’s attention was focused on the anomaly of having under advisement an appeal of the Bankruptcy Judge’s order appoint[954]*954ing a trustee and yet having confirmed a plan of reorganization. Under such circumstances, interests of finality and clarity prompt the Court sua sponte to consider the issues raised.

The situation presents an interesting and novel problem which arises because of the peculiar relationships created by the Bankruptcy Act. Thus, while this Court acted as an appellate court for the review of the Bankruptcy Judge’s findings of fact and conclusions of law and its resultant appointment of a trustee, and while the appeal thereon was pending, this Court took charge of the entire case by virtue of its withdrawal of the reference to the Bankruptcy Court. Yet, the appeal is still pending even though this Court, by its confirmation of the plan of reorganization, has implicitly found that there is no need for the appointment of a trustee. Merely to dismiss the appeal, however, may carry with it the implication, at the very least, that the Bankruptcy Judge’s order has continuing validity. At the same time, to conduct an appellate review to determine the validity or lack of validity of that order would be an unwarranted expenditure of judicial time and resources on a matter which is essentially moot. See e.g., Allen v. Wright, — U.S. -, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); Young v. Klutznick, 652 F.2d 617 (6th Cir.1981).

Nor is there any profit to be gained by such a review. As is evident from a comparison of the Bankruptcy Judge’s opinion with this Court’s opinion, there were significant differences in the respective findings of fact and conclusions of law. This in appreciable measure is attributable to changes in circumstances and a fuller development of the evidence, in addition to changes in the positions of various parties through the negotiations and conferences with this Court. In addition, the hearings before the Bankruptcy Judge were heated and prolonged, frequently extending well into the nighttime hours, and, in some respects may have been hurried because of the impending date of the Bankruptcy Judge’s resignation. To revisit that conflict would undoubtedly vent some spleens but would add nothing to the orderly process of this case, especially since under a more benevolent atmosphere and the efforts of various parties, a resolution was achieved.

The Court is aware, of course, that this Court’s order confirming the plan of reorganization is on appeal. If the order is reversed, this Court could then be required to reconsider the issue of the appointment of a trustee. However, it would necessarily do so with the recognition of substantial changes in the circumstances considered by the Bankruptcy Judge in August and September of 1984. Thus, his findings and conclusions would be only peripherally relevant, if at all, to such a determination. Certainly this Court would be remiss if it ignored such changes and simply reverted to the original appeal and its now superseded context.

The critical factor, however, is that regardless of the validity of the Bankruptcy Judge’s findings and conclusions, this Court's confirmation of the plan of reorganization is antithetical to the appointment of a trustee. The confirmation, by clear implication, overturns the order appointing a trustee, which is, after all, only an interlocutory order, and deprives it of any force or effect.

Consequently, the Order and Opinion Appointing a Trustee is vacated and set aside. See e.g., United States v. Munsingwear, 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950); Gjertsen v. Board of Commissioners, 751 F.2d 199 (7th Cir.1984).

The movants also request that this Court order the suppression of the Order and Opinion Appointing a Trustee and order that it not be published in the hard cover volume of West’s Bankruptcy Reporter service. It already has been published in the service’s advance sheets.

Another anomaly is presented to the Court since the movants take inconsistent positions. On the one hand, they request that the Order and Opinion of the Bankruptcy Judge be vacated as being moot, and on the other, urge suppression of the [955]*955Order and Opinion on the grounds that it is erroneous. Thus the Court is asked to review the appeal on its merits for one purpose and to decline a review for another purpose. The positions taken by the mov-ants are inimical internally and also inimical to the foregoing ruling of the Court.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Near v. Minnesota Ex Rel. Olson
283 U.S. 697 (Supreme Court, 1931)
United States v. Munsingwear, Inc.
340 U.S. 36 (Supreme Court, 1950)
New York Times Co. v. United States
403 U.S. 713 (Supreme Court, 1971)
Allen v. Wright
468 U.S. 737 (Supreme Court, 1984)
Matter of US Truck Co., Inc.
47 B.R. 932 (E.D. Michigan, 1985)
Matter of US Truck Co., Inc.
44 B.R. 311 (E.D. Michigan, 1984)
Young v. Klutznick
652 F.2d 617 (Sixth Circuit, 1981)

Cite This Page — Counsel Stack

Bluebook (online)
47 B.R. 952, 1985 U.S. Dist. LEXIS 21470, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-us-truck-co-mied-1985.