JWL Entertainment Group, Inc. v. Solby+Westbrae Partners, 19 SHC, Corp.
778 F.3d 1172
| 11th Cir. | 2015Background
- Consolidated bankruptcy appeals over ownership of three debtors Fisher Island, Little Rest, and Mutual Benefits (the Alleged Debtors) between Redmond Group and Zeltser Group.
- Involuntary Chapter 11 petitions were filed March 17, 2011, targeting all three Alleged Debtors for approximately $32 million in debt.
- Gibraltar court found Valmore Trust funded assets for Badri’s family; Valmore Trust ownership favored Redmond; Gibraltar judgment deemed Valmore Trust valid.
- Examiner’s November 2011 report concluded Valmore Trust owned Fisher Island and Little Rest; Kayley/Mutual Benefits ownership assigned to Test Trust; Zeltser’s ownership theory deemed inconsistent.
- Bankruptcy court sua sponte granted summary judgment (Jan 20, 2012) in Redmond’s favor on Fisher Island/Little Rest ownership, based on Valmore Trust ownership.
- Mutual Benefits case proceeded to trial (April 2013); Redmond won; district court and Eleventh Circuit affirmed all orders, rejecting Zeltser challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court had authority to enter final judgment on ownership under Stern | Zeltser argues Stern deprives final judgment power in core ownership | Redmond argues ownership is core and consented to by Zeltser; Stern does not bar here | Bankruptcy court had authority to enter final judgment on ownership |
| Whether ownership issue could be decided as a contested matter without adversary proceedings/joinder | Zeltser claims need for joinder of indispensable parties; improper contested matter | Redmond contends contested matter procedure adequate; joinder not required | Ownership issue properly adjudicated as contested matter; no error in bypassing adversary proceeding |
| Whether the January 20, 2012 summary judgment on Fisher Island/Little Rest was proper | Zeltser asserts lack of notice/Procedural defects; genuine issues of material fact | Redmond shows no genuine issues; Zeltser waived by not briefing earlier | Summary judgment proper; no genuine disputes of material fact |
| Standing of non-party appellants to challenge summary judgment in Fisher Island/Little Rest | Fisher Limited, Grosvenor, Areal seek standing notwithstanding lack of appearance | Standing requires person aggrieved; non-parties lack financial stake | Non-party appellants lack standing; appeals dismissed as to them |
| Whether final judgment in Mutual Benefits was permissible without joinder/adversary proceeding | Zeltser argues lack of in personam/in rem jurisdiction without indispensable parties | Ownership determined by trial; continuances denied; evidence supports Davis’s authority | Final judgment proper; ownership found in Davis’s authority; no reversible error |
Key Cases Cited
- Stern v. Marshall, 564 U.S. __ (2011) (constitutional limits on bankruptcy court final judgments in non-claims contexts)
- Northern Pipeline Construction Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982) (public rights and core/non-core distinctions in bankruptcy)
- Katchen v. Landy, 382 U.S. 323 (1966) (priority/issues resolving claims tied to bankruptcy proceedings)
- Langenkamp v. Culp, 498 U.S. 42 (1990) (bankruptcy-related claims may involve final determinations if tied to restructuring)