Peter Ullrich v. Kenneth A. Welt, 810 F.3d 781

Nica Holdings, Inc. (Nica) assigned its assets to Kenneth Welt via a Florida Assignment for the Benefit of Creditors (ABC) after its Nicaraguan tilapia farm failed; Nica’s principal remaining assets were (a) litigation against Welt (the Adversary Proceeding) and (b) a malpractice claim against Squire Sanders.
Welt, as ABC assignee, later purported to file a voluntary Chapter 7 petition for Nica; Leslie Osborne was appointed Chapter 7 trustee. Ullrich (an investor) challenged Welt’s authority to file and moved to dismiss.
The trustee intervened, removed Ullrich’s state suit, and negotiated an Adversary Settlement that (among other things) gave Welt a personal bar order in exchange for subordination of Welt’s administrative claims and Welt’s funding contribution; Ullrich objected and proposed a competing settlement offer.
Bankruptcy Court approved the Adversary Settlement and later approved a separate Malpractice Settlement with Squire Sanders that paid the estate $210,000 plus retained Welt’s $50,000 contribution; no creditors received distributions.
On appeal, the Eleventh Circuit considered (1) whether the appeal was equitably moot given settlement consummation, and (2) whether an ABC assignee (Welt) had authority under Florida law to unilaterally file a bankruptcy petition on behalf of the assignor.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Equitable mootness of appeal	Ullrich argued settlements and consummation prevent effective relief	Appellees argued settlements were consummated and relief would disrupt third parties	Not equitably moot: settlements not substantially consummated, funds remain in estate, relief still possible
Authority to file bankruptcy	Ullrich: ABC assignee lacked authority to file Chapter 7 absent explicit authorization	Appellees/Bankruptcy Ct.: ABC agreement’s broad POA and statutory form language implicitly authorized filing	Reversed: Florida ABC assignee lacks authority to file bankruptcy absent specific, plain authorization; Welt lacked authority
Jurisdiction to decide authority-to-file	Ullrich argued Bankruptcy Ct. lacked jurisdiction; alternatively that petition was unauthorized	Appellees argued question was waived or barred	Federal courts may decide their own jurisdiction; court addressed and decided the authority question on merits
Effect of settlements/dismissals and statute of limitations	Ullrich contended dismissals and settlements harmed estate and creditors; statute limitations might bar revival	Appellees relied on finality of settled and dismissed claims	Court remanded for dismissal of bankruptcy; suggested equitable tolling or revival of claims may mitigate statute-bar problems because bankruptcy was unauthorized

Brown v. Gore (In re Brown), 742 F.3d 1309 (11th Cir. 2014) (standard of review for bankruptcy appeals)
First Union Real Estate Equity & Mortg. Invs. v. Club Assocs. (In re Club Assocs.), 956 F.2d 1065 (11th Cir. 1992) (equitable mootness multifactor framework)
Miami Ctr. Ltd. P’ship v. Bank of N.Y., 820 F.2d 376 (11th Cir. 1987) (equitable mootness concerns where sales and redeployments would be disrupted)
Miami Ctr. Ltd. P’ship v. Bank of N.Y., 838 F.2d 1547 (11th Cir. 1988) (discussion of appellate relief that would ‘knock the props out’ under bankruptcy transactions)
Russo v. Seidler (In re Seidler), 44 F.3d 945 (11th Cir. 1995) (failure to obtain a stay does not automatically render appeal moot)
United States v. Ruiz, 536 U.S. 622 (2002) (federal courts have authority to determine their own jurisdiction)
Price v. Gurney, 324 U.S. 100 (1945) (state law determines who may authorize a corporation to file bankruptcy)
Sandvik v. United States, 177 F.3d 1269 (11th Cir. 1999) (equitable tolling principles)