Shimer v. Fugazy

982 F.2d 769, 1992 U.S. App. LEXIS 32917
CourtCourt of Appeals for the Second Circuit
DecidedDecember 17, 1992
DocketNos. 1418, 1655, Dockets 92-5005, 92-5007
StatusPublished
Cited by5 cases

This text of 982 F.2d 769 (Shimer v. Fugazy) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shimer v. Fugazy, 982 F.2d 769, 1992 U.S. App. LEXIS 32917 (2d Cir. 1992).

Opinion

KEARSE, Circuit Judge:

Defendants William D. Fugazy (“William Fugazy” or “William”), Fugazy Limousine Limited (“Limousine”), and Roy D. Fugazy (“Roy Fugazy” or “Roy”) (collectively the “Fugazy Parties”) appeal from an order entered in the United States District Court for the Southern District of New York, Kevin Thomas Duffy, Judge, affirming an order of the United States Bankruptcy Court for the Southern District of New York, Burton R. Lifland, Chief Judge, which, inter alia, (1) ruled that William Fugazy had improperly transferred a broadcast license that was property of the estate of bankruptcy Chapter 7 debtor Fugazy Express, Inc. (“Debtor”), to Limousine and Roy Fugazy, and (2) ordered the payment of damages, to be determined after an accounting, and attorneys’ fees to plaintiffs-appellees Zachary Shimer, who is [772]*772the Chapter 7 trustee of the Debtor (“Trustee”), and Metromedia Company ("Metromedia”). Resolution of the damages and fees issues has been stayed by the bankruptcy court pending the outcome of this appeal. On appeal, the Fugazy Parties contend that these orders should be reversed on the ground that the license was not properly regarded as property of the Debtor’s estate and that its transfer was properly approved by the pertinent regulatory authority. For the reasons below, we conclude that the order of the bankruptcy court was not a final order within the meaning of 28 U.S.C. § 158(a) (1988), that the order of the district court is therefore not sufficiently final to be appeal-able under 28 U.S.C. § 158(d) (1988) or 28 U.S.C. § 1291 (1988), and that the orders are not injunctive orders appealable under 28 U.S.C. § 1292(a)(1) (1988). Accordingly, we dismiss the appeal for lack of appellate jurisdiction.

I. BACKGROUND

Prior to July 1986, the Debtor was engaged in the business of selling and servicing franchises for livery and limousine services to independent limousine operators who conducted their operations using the “Fugazy” name. William Fugazy was chairman of the Debtor’s board of directors. Roy, William’s son, was formerly the Debtor’s vice president for marketing and is the controlling shareholder of Limousine.

A. The Events

Pursuant to its franchise agreements, the Debtor provided radio dispatching services for its franchisees. The dispatches were broadcast over several radio frequencies, for which the Debtor had obtained six licenses and permits from the Federal Communications Commission (“FCC”). In July 1986, the Debtor filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code (“Code”), 11 U.S.C. § 101 et seq. (1988), see id. §§ 1101-1174. In or about January 1987, William caused the Debtor to transfer its FCC license for the call sign KXY-610 and two specified frequencies (“KXY License” or “License”) to Limousine without consideration. Limousine applied to the FCC for, and in April 1987 received, approval of the transfer. The bankruptcy court had neither been asked to approve, nor been informed of, the transfer; the FCC had not been informed of the Debtor’s filing for bankruptcy.

In the meantime, in March 1987, the bankruptcy court entered an order converting the reorganization proceeding into one for liquidation under Chapter 7 of the Code, 11 U.S.C. §§ 701-766, and promptly appointed the Trustee to oversee the liquidation. In June 1987, a court-authorized auction was held, following which the Trustee sold and transferred all right, title, and interest in the Debtor’s six FCC licenses, including the KXY License, to Metromedia.

Metromedia soon discovered William’s purported prior transfer of the KXY License to Limousine, and in August 1987, the Trustee and Metromedia commenced the present adversarial proceeding against the Fugazy Parties, seeking, inter alia, a declaration that the purported transfer was null and void because it had occurred without the permission of the bankruptcy court, and an accounting.

William conceded that in making the transfer he had acted without authority. On the basis of this concession, the bankruptcy court promptly entered an order in September 1987, which was consented to by William, the Trustee, and Metromedia (“Consent Order”), declaring the assignment null and void and directing the Trustee to convey the License to Metromedia. William and Metromedia were also directed to send a copy of the Consent Order to the FCC and to take whatever actions were requested by the FCC to effectuate the order’s provisions. Counsel for Limousine and Roy Fugazy were present at all hearings relevant to the Consent Order. Immediately following entry of the order, Metromedia applied to the FCC to void the unauthorized assignment of the KXY License. Limousine opposed the application, and the FCC granted Limousine temporary [773]*773authorization to use the License pending resolution of the dispute.

In a letter dated October 26, 1988, the FCC refused to act on Metromedia’s request that the purported transfer to Limousine be voided, stating in pertinent part as follows:

While the rights and obligations of the various parties vis-a-vis each other may be somewhat complex, their obligations to the Commission are quite simple. Fugazy Express, Inc., licensee of record, assigned the license for KXY-610 to R.D.F. Limousine, who then became the licensee of record for our purposes. Information submitted to us, the Consent Order of the Bankruptcy Court in particular, casts doubt upon the validity of this transaction, and would under other circumstances require an administrative inquiry on our part. Here, however, the particular facts before us make such action unnecessary.
Affidavits submitted with the pleadings establish that KXY-610 ceased operations in December, 1986. Under Section 90.157 of our Rules, 47 C.F.R. § 90.157, the license for KXY-610 has therefore cancelled and must be returned to the Commission.

Though the FCC letter did not state specifically as of what date the KXY License had been cancelled, the cited regulation provided that for purposes of return of licenses to the Commission, a broadcast station is considered to have been permanently discontinued if it “has not operated for 1 year or more.” 47 C.F.R. § 90.157(c). It is undisputed that Limousine used the frequencies covered by the KXY License at least from the time of the unauthorized assignment until December 1, 1988, when Limousine obtained a new license from the FCC to use those frequencies under a new call sign.

B. The Decisions Below

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Related

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246 B.R. 743 (N.D. New York, 2000)
In Re Integrated Resources, Inc.
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In Re Fugazy Express, Inc.
982 F.2d 769 (Second Circuit, 1992)

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Bluebook (online)
982 F.2d 769, 1992 U.S. App. LEXIS 32917, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shimer-v-fugazy-ca2-1992.