White v. Univision of Virginia Inc.

401 F.3d 236
CourtCourt of Appeals for the Fourth Circuit
DecidedMarch 11, 2005
DocketNo. 04-1262
StatusPublished
Cited by1 cases

This text of 401 F.3d 236 (White v. Univision of Virginia Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
White v. Univision of Virginia Inc., 401 F.3d 236 (4th Cir. 2005).

Opinion

Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge MICHAEL and Judge DUNCAN joined.

OPINION

NIEMEYER, Circuit Judge:

In this Chapter 7 bankruptcy of Urban Broadcasting Corporation (“UBC”), Univision of Virginia, Inc. (“Univision”), a 45% owner of UBC’s stock, filed a claim to require UBC to buy its 45% equity interest in accordance with a put/call agreement between it and UBC. Because the bankruptcy estate had approximately $17.5 million in it after all creditors, except Uni-[239]*239vision, had been paid, Univision’s shares were worth about $7.86 million. Allowing Univision’s claim as a creditor under the put/call agreement therefore would yield Univision the same amount that it would receive if its claim were disallowed and it were paid as a 45% equity owner of UBC.

The bankruptcy court conducted a hearing on Univision’s claim on July 22, 2003. Theodore White, the owner of the remaining 55% of the shares of UBC, did not attend the hearing, nor did he submit any objection, despite the bankruptcy court’s order that he file any objection by July 3, 2003, or “be forever barred.” Following the hearing, the court allowed Univision’s claim as a creditor under the put/call agreement and authorized distribution of $7.86 million to Univision and the remaining distributable amount of $8.85 million (net of administrative expenses) to White.

White appealed the bankruptcy court’s July 22 allowance order, as well as two procedural orders relating to the July 22 allowance order, to the district court. With respect to the allowance order, White contended that Univision should have received the $7.86 million not as a creditor, but rather as a shareholder of UBC. Even though there would be no difference in the amount of distribution, White argued that a distribution to Univision as a creditor would have a greater res judicata effect in any subsequent court proceeding and thus would affect him adversely. White expressly told the court that he was intending to file a separate suit against Univision after the bankruptcy proceedings were completed.

On Univision’s motion, the district court dismissed White’s appeal on the ground that he had no standing to challenge the bankruptcy court’s order because he “failed to file an objection to the claim despite the bankruptcy court’s order to do so by July 3 ‘or be forever barred’ ” and also because he “failed to appear and object at the July 22 bankruptcy court hearing regarding Univision’s claim.” The court ruled alternatively:

Even assuming arguendo that White had standing to appeal, however, White’s failure to object despite specific direction by the bankruptcy court to do so is a “voluntary and intentional” relinquishment of his objection and hence a waiver. As a consequence, White is barred from attacking Univision’s claim and allowance order.

Although our reasoning differs somewhat from that advanced by the district court, we affirm the district court’s judgment on the grounds that (1) White was not “a person aggrieved” by the bankruptcy court’s order, as the term “person aggrieved” is'used to justify standing to appeal a bankruptcy order, and (2) in any event, White waived or forfeited the right to challenge the bankruptcy court’s July 22 order by failing to comply with the bankruptcy court’s June 5, 2003 order to file such a claim or “be forever barred” from doing so. In view of these conclusions, we also conclude that the bankruptcy court’s proeedúral orders were interlocutory and therefore not appealable to the district court.

I

Theodore White and Silver King Broadcasting of Virginia, Inc. (“Silver King”) formed UBC in 1989 to operate a Home Shopping Network-affiliated television station in the Washington, -D.C. area. In exchange for financing the initial construction of the station, Silver King received a 45% equity stake in UBC, and White, who was to serve as UBC’s CEO and general manager, received the remaining 55%. White and Silver King also entered into a “Right of First Refusal and Put and Call Agreement.” Under the terms of that [240]*240agreement, Silver King had a right to require UBC to purchase its shares on the occurrence of certain triggering events (a “put”), including UBC’s default on any loan agreements, UBC’s failure to affiliate with the Home Shopping Network, and UBC’s failure to perform its obligations under such an affiliation agreement. White had a “call” option on Silver King’s shares, which gave him the right to purchase Silver King’s stock in the event that Home Shopping Network defaulted on its compensation payments to UBC under an affiliation agreement.

Shortly after signing the put/call agreement, Silver King changed its name to HSN Broadcasting of Virginia, Inc., and the puVcall agreement was amended accordingly. Later, HSN Broadcasting of Virginia, Inc., became, by another name change, USA Station Group of Virginia, Inc. Yet later, USA Station Group of Virginia, Inc., was among the entities purchased by Univision Communications, Inc., and became Univision of Virginia, Inc. (“Univision”), the claimant in this case.

Almost from the beginning, UBC was marred by fighting between its equity owners and by problems with its affiliation agreement with Home Shopping Network. Construction-related disputes between the owners of UBC led UBC to file its first Chapter 11 bankruptcy in 1995, and shortly after UBC emerged from bankruptcy in 1996, litigation ensued in Virginia state court between UBC and Home Shopping Network when Home Shopping Network discontinued its affiliation payments to UBC. Both UBC and Home Shopping Network asserted that the other was in breach of their affiliation agreement, but Home Shopping Network ultimately prevailed, obtaining a declaratory judgment that it had not breached the agreement.

Because UBC was no longer receiving affiliation payments from Home Shopping Network, it was forced to file a second Chapter 11 bankruptcy proceeding in August 2000 — the bankruptcy that is at issue in this appeal. USA Station Group of Virginia (formerly Silver King) filed a motion to appoint a Chapter 11 trustee. To avoid the appointment of a trustee, however, UBC agreed to sell substantially all of its assets. The bankruptcy court conducted an auction in April 2001, and Univision Communications, Inc., was the highest bidder for the assets at $60 million. About that same time, Univision Communications, Inc., also completed its acquisition of USA Networks, Inc.’s broadcast television subsidiaries, and USA Station Group of Virginia, Inc., thereby became Univision of Virginia, Inc. (“Univision”). Thus, Univision became the presumptive successor-in-interest to Silver King’s 45% equity stake in UBC and the put/call agreement that White and UBC originally entered into with Silver King.

During the course of UBC’s Chapter 11 proceeding, Univision, as 45% owner of UBC, filed a proof of claim based on the put/call agreement, contending that triggering events had occurred and that UBC was therefore required to buy its 45% interest in UBC. UBC objected to the claim, primarily disputing Univision’s asserted status as a successor in interest to the put/call agreement.

Concerned with White’s control of the bankruptcy estate, the bankruptcy court appointed Stanley M. Salus as Chapter 11 trustee on December 19, 2001. The court concluded that “given the debtor’s failure to propose a confirmable plan, the best way at this point of getting creditors paid is ...

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401 F.3d 236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/white-v-univision-of-virginia-inc-ca4-2005.