512 B.R. 126
Bankr. D.P.R.2014Background
- Cantera Dorado, Inc. (Debtor) filed Chapter 11 on December 3, 2012; creditor PRAPI moved to convert to Chapter 7 on January 22, 2014.
- Local rule warned that an unopposed conversion motion may be granted if no timely objection is filed; Debtor did not oppose within the notice period.
- Bankruptcy Court converted the case to Chapter 7 on February 11, 2014 and appointed a Chapter 7 trustee.
- Debtor filed post-judgment motions: a Rule 59 motion (denied), then a February 24, 2014 motion titled to amend or add findings under Fed. R. Bankr. P. 7052 (denied March 6, 2014). Debtor filed a notice of appeal the same day.
- Debtor moved in district court (April 15, 2014) for a stay pending appeal (to halt conversion or sale); trustee argued dismissal for lack of jurisdiction because the appeal was untimely.
- District court held it had jurisdiction (7052 motion tolled the appeal period), denied the stay (Debtor unlikely to succeed and failed other stay factors), and dismissed the appeal on the merits and for failure to file an appellate brief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court has jurisdiction over the appeal (timeliness) | Debtor: February 24 filing was a Rule 7052 motion to amend/add findings, which tolled the appeal period under Rule 8002 | Appellees: February 24 filing was a second motion for reconsideration (not a 7052 motion) and thus did not toll the appeal deadline | Held: The filing was a Rule 7052 motion; Rule 8002 tolls the appeal period, so jurisdiction exists |
| Whether a stay pending appeal should issue to block conversion or sale | Debtor: Urgent stay needed; has a confirmable plan; sale should be stayed | Trustee/PRAPI: Sale already executed; conversion appropriate based on Debtor’s failure to oppose | Held: Stay denied — Debtor failed to show likelihood of success and irreparable harm; sale already occurred |
| Whether conversion to Chapter 7 was erroneous | Debtor: Conversion was improper (implicit challenge to conversion decision) | Appellees: Conversion was proper; based on Debtor’s failure to timely oppose under Local Rule 9013‑1(c)(1) and § 1112 | Held: Conversion was within bankruptcy court’s discretion and resulted from Debtor’s failure to comply with local rules; appeal lacks merit |
| Whether appeal should be dismissed for procedural failures (briefing) | Debtor: (did not timely file brief or request extension) | Appellees: Failure to file brief warrants dismissal | Held: Appeal dismissed in its entirety for lack of merit and for failure to file required appellate brief |
Key Cases Cited
- Aybar v. Crispin-Reyes, 118 F.3d 10 (1st Cir. 1997) (successive motions should not toll appeal period; promotes finality)
- Wright v. Preferred Research, Inc., 891 F.2d 886 (11th Cir. 1990) (substance of motion controls characterization over label)
- Nat’l Metal Finishing Co. v. BarclaysAmerican/Commercial, Inc., 899 F.2d 119 (1st Cir. 1990) (Rule 52/7052 can be used to amplify findings to aid appellate review)
- Nken v. Holder, 556 U.S. 418 (2009) (stay factors and emphasis on likelihood of success)
- Esso Standard Oil Co. v. Monroig-Zayas, 445 F.3d 13 (1st Cir. 2006) (likelihood of success is critical for stay analysis)
- New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287 F.3d 1 (1st Cir. 2002) (discussion of stay standards)
- P.R. Hosp. Supply, Inc. v. Boston Scientific Corp., 426 F.3d 503 (1st Cir. 2005) (evaluating irreparable harm relative to chance of success)