In Re: Ernie Haire Ford, Inc., d.b.a. Ernie Harie Megavolume Superstore, d.b.a. BigDog Motorcycles of Tampa, d.b.a. Quicklane Tire & Auto Center, d.b.a. Ernie Haire Used Car Supercenter of Tampa, d.b.a. Ernie Haire Used Car Auto Mall, d.b.a. Indian Motorcycle of Tampa, Debtor. BENJAMIN ATKINSON, Plaintiff - Appellant, versus ERNIE HAIRE FORD, INC., Defendant - Appellee.
No. 13-11810
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
September 4, 2014
Non-Argument Calendar. D.C. Docket No. 8:12-cv-01494-MSS, Bkcy No. 8:08-bk-18672-MGW. [PUBLISH]
(September 4, 2014)
Before WILSON, PRYOR and ROSENBAUM, Circuit Judges.
WILSON, Circuit Judge:
Appellant Benjamin Atkinson appeals from the district court‘s affirmance of the bankruptcy court‘s orders granting Appellee Ernie Haire Ford, Inc.‘s (Debtor) motion to modify its Second Amended and Restated Chapter 11 Plan (Second Plan) and confirming the Debtor‘s Third Amended Plan of Reorganization (Third Plan). Because Atkinson‘s interest in avoiding liability is not an interest protected or regulated by the Bankruptcy Codе, he has failed to satisfy our person aggrieved standard. Accordingly, we affirm.
I.
The Debtor, a licensed Ford dealer operating in Hillsborough County, Florida, filed for Chapter 11 bankruptcy on November 24, 2008. The Debtor‘s Second Plan was confirmed by the bankruptcy court on October 14, 2009. Among оther things, the Second Plan empowered a liquidating agent, at its discretion, to sue third parties alleged to owe money to the bankruptcy estate. The Second Plan also provided that “[a]ll Litigation not already pending at the time of the Effective
Appellant Benjamin Atkinson is a former creditor2 who was employed by the Debtor from 1999 through 2005. On December 30, 2011, well after the passage of the Litigation Bar Date, the liquidating agent named Atkinson as a defendant in 16 adversary proceedings alleging claims of fraud and misappropriation related to Atkinson‘s employment. Atkinson moved to enjoin the liquidating agent from proceeding with these claims on the grounds that they were filed after the Litigation Bar Date. In response, the Debtor filed a motion to modify the Second Plan that sought to amend the definition of the Litigation Bar Date to allow the аdversary proceedings against Atkinson to go forward. The
The bankruptcy court determined that a modification could occur based on its finding that the Second Plan had not been substantially consummated because the Debtor still controlled a number of assets—valued between two and three million dollars—that were required to be sold under the Second Plan. The Debtor subsequently filed its Third Plan, which modified the Litigation Bar Date to allow the advеrsary proceedings against Atkinson to go forward. The bankruptcy court confirmed the Third Plan at a hearing on June 5, 2012 and entered an order (Confirmation Order) on June 21, 2012.
On appeal, the district court affirmed the bankruptcy court‘s grant of the motion to modify and subsequent confirmation of the Third Plan. Atkinson now appeals to this court.
II.
We review questions of law decided by the district court de novo. Westwood Cmty. Two Ass‘n. v. Barbee (In re Westwood Cmty. Two Ass‘n.), 293 F.3d 1332, 1334 (11th Cir. 2002).
III.
Due to the nature of bankruptcy proceedings, which “often involve numerous creditors who are dissatisfied with any comprоmise that jeopardizes the
The person aggrieved doctrine limits the right to appeal a bankruptcy court order to “those parties having a direct and substantial interest in the question being appealed.” Id. at 1335 (internal quotation marks omitted). We have held that this
A number of our sister circuits have held that bankruptcy court orders that merely allow adversаry proceedings to move forward do not cause adversary defendants the type of direct harm necessary to satisfy the person aggrieved standard. See Moran v. LTV Steel Co. (In re LTV Steel Co.), 560 F.3d 449, 453 (6th Cir. 2009) (holding “that the burden of defending a lawsuit, however onerous or unpleasant, is [not] the sort of direct and immediate harm that makes a party ‘aggrieved.‘“); H.K. Porter Co., 45 F.3d at 743 (“Consistent with the view that appeal from bankruptcy proceedings is denied to marginal parties in bankruptcy proceedings who face potential harm incident to the bankruptcy court‘s order but are not directly affected, сourts have recognized that an order which simply allows a lawsuit to go forward does not necessarily aggrieve the potential defendant . . . .” (citation and internal quotation marks omitted)); In re El San Juan Hotel, 809 F.2d
Moreover, the Second, Sixth, and Seventh Circuits have recognized that a person is not “aggrieved” when the interests harmed by a court order are not interests thе Bankruptcy Code seeks to protect or regulate. See In re LTV Steel Co., 560 F.3d at 454 (noting that the interest of an adversary defendant in avoiding liability is not protected by the Bankruptcy Code); Kabro Assocs. of West Islip, LLC v. Colony Hill Assocs. (In re Colony Hill Assocs.), 111 F.3d 269, 273–74 (2d Cir. 1997) (finding that a party who was not allowed to bid on a debtor‘s assets at auction could appeal the order approving the transaction because attacks on the inherent fairness of a bankruptcy proceeding are “within the zone of interests
The person aggrieved standard was developed as an answer tо the argument that the failure to limit who can appeal a bankruptcy court‘s order would cause “bankruptcy litigation [to] become mired in endless appeals brought by the myriad of parties who are indirectly affected by every bankruptcy court order.” Kane, 843 F.2d at 642. Since the рurpose of adopting this heightened standard was to ensure that the goals of bankruptcy were not derailed by a flood of appeals, it only makes sense to exclude appeals from those parties who do not suffer a direct harm to interests the Bankruptcy Code seeks to protect or regulate—that is, appeals that do not further the goals of bankruptcy. Allowing appeals from parties who have suffered only an indirect harm or who hold interests outside the scope of the Bankruptcy Code would defeat the very purpose underlying our person aggrieved standard.
Atkinson relies on this right to differentiate himself from the normal аdversary defendant. He argues that he has suffered a direct harm because the bankruptcy court‘s order does more than simply allow litigation to proceed against him. Instead, the order hampered Atkinson‘s ability to defend against liability by removing a defense that would have оtherwise been available to him—the right to seek an injunction because a claim was initiated after passage of the Litigation Bar Date. This, he contends, is enough to make him a person aggrieved. See In re LTV Steel Co., 560 F.3d at 454 (noting that an order allowing litigation to proceed “did not impаir appellants’ ability to defend themselves” because all defenses were still available (internal quotation marks omitted)); H.K. Porter Co., 45 F.3d at 743 (finding that an order did not directly harm an adversary party‘s interest in defending against liability because the order did not prevent him from asserting any claims or defеnses); In re El San Juan Hotel, 809 F.2d at 155 (same).
Atkinson‘s reliance on the right to seek an injunction bestowed on him by the Second Plan only serves to highlight that he is not a person aggrieved. Importantly, Atkinson‘s right originates in the Second Plan, not the Bankruptcy Code. Even if we considered his interest in avoiding litigation by enjoining a lawsuit as different from his interest in avoiding liability, we would not deem Atkinson a person aggrieved because his interest is not protected by the
AFFIRMED.
11
Notes
In its order approving the Second Plan, the bankruptcy court set the definition of “Effective Date” as “the date 10 (tеn) calendar days following the date upon which this Confirmation Order is signed by this Court.” The order was signed October 14, 2009, making the Effective Date October 24, 2009.