Dondero v. Debtor Highland Capital Management LP, 3:20-cv-03390

Highland Capital Management filed Chapter 11 in October 2019; Acis filed a proof of claim and later settled with Highland. The bankruptcy court approved that settlement via a Rule 9019 order (the 9019 order).
Highland’s Fifth Amended Plan (confirmed Feb. 2021) transferred all “Estate Claims,” including potential claims against James Dondero, to a Claimant Trust and Litigation Sub‑Trust.
Dondero appealed the 9019 order in April 2021 and initially had three live proofs of claim that could be affected by the order.
Trustee Marc Kirschner later filed an adversary action against Dondero seeking, among other relief, a declaration that Dondero is Highland’s alter ego and therefore liable for debts approved by the 9019 order.
On February 1, 2022 Dondero withdrew his remaining proofs of claim; Highland moved to dismiss the appeal as constitutionally moot for lack of bankruptcy standing.
The district court granted the motion and dismissed the appeal on March 18, 2022, holding Dondero no longer a “person aggrieved” because he lacks a direct, adverse, pecuniary interest in the 9019 order.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Dondero has bankruptcy‑appeal standing (is a “person aggrieved”) to pursue the appeal of the 9019 order after withdrawing his proofs of claim	Dondero: He faces potential liability in the Kirschner adversary proceeding that seeks to hold him liable for amounts awarded under the 9019 order; overturning the order would materially reduce his potential liability and defense costs	Highland: Withdrawal of all claims means the 9019 order no longer directly, adversely, and pecuniarily affects Dondero; any connection through the separate adversary proceeding is indirect and speculative	The court held Dondero lacks standing; the appeal is moot and dismissed for lack of jurisdiction

In re Halo Wireless, Inc., 684 F.3d 581 (5th Cir. 2012) (judicial‑notice standard and consideration of subsequent events on mootness)
In re Manges, 29 F.3d 1034 (5th Cir. 1994) (review of subsequent events bearing on mootness)
In re Coho Energy, Inc., 395 F.3d 198 (5th Cir. 2004) (bankruptcy standing requires direct, pecuniary impact)
Matter of Technicool Sys., Inc., 896 F.3d 382 (5th Cir. 2018) (order must directly burden appellant’s pocket to confer standing)
Matter of Dean, 18 F.4th 842 (5th Cir. 2021) (reiterating the ‘‘person aggrieved’’ direct, adverse, pecuniary test)
Goldin v. Bartholow, 166 F.3d 710 (5th Cir. 1999) (mootness divests court of jurisdiction when party loses standing)
Arizonans for Official Eng. v. Arizona, 520 U.S. 43 (U.S. 1997) (standing must exist throughout litigation)
Rohm & Hass Tex., Inc. v. Ortiz Bros. Insulation, Inc., 32 F.3d 205 (5th Cir. 1994) (speculative or indirect injury insufficient for bankruptcy standing)