These four related appeals arise from a long-running and acrimonious business dispute between appellants Patti Lardas and her nephew Danny Christofalos on one side and appellees Slavko Grcic and associates on the other. Appeal Nos. 15-1685 (Lardas I) and 15-1704 {Cohen) were consolidated for oral argument, which took place on October 28, 2015. Appeal No. 16-4210 {Lardas II) concerns the district court’s denial of a motion by Christofalos to reopen proceedings in Lardas I, and we treat it as a successive appeal. Appeal No. 16-2913 {Kienlen) is also successive to the earlier consolidated appeals. We can decide Kienlen and Lardas II without further oral argument. The briefs and record adequately present the facts and legal issues, and oral argument would not significantly aid our decision-making process. See Fed. R. App. P. 34(a)(2)(C). We affirm the judgments and orders on appeal in Lardas I, Lardas II, and Kienlen, and we dismiss the appeal in Cohen as moot.
I. Lardas I (No. 15-1685)
In Lardas I, a diversity jurisdiction action, plaintiff Patti Lardas brought claims of fraudulent inducement and breach of contract against defendants Slavko Grcic; his sons, Milovan arid Draza Grcic; Thomas Karacic; and Karacic’s employer, the Amalgamated Bank of Chicago.
The crux of Lardas’s controlling amended complaint is that the Grcics tricked her into participating in a global settlement agreement pursuant to .which, among other things, her nephew Christofalos was to receive a 99% interest in an entity called Wauconda Shopping Plaza, LLC (“WSP”), with Slavko Grcic retaining a 1% interest in the entity as well as a lien on Christofa-los’s interest. According to Lardas, the Grcics hatched an elaborate scheme— along with Karacic and the Amalgamated Bank* — to force WSP to default on a loan and, ultimately, to foreclose on Christofa-los’s 99% stake and have the Grcics take control.
The defendants moved to dismiss, arguing that Lardas lacked standing to pursue her claims. Though the defendants cited Federal Rule of Civil Procedure 12(b)(6), the district court reviewed their motion pursuant to Rule 12(b)(1). In so doing, the court treated the motion as a facial attack on Lardas’s standing; accepting as true the factual allegations in the amended complaint as well as the contents of the settlement agreement appended to the complaint. The court took no additional evidence. See Apex Digital, Inc. v. Sears, Roebuck & Co.,
To pursue a civil claim in federal court, a plaintiff must allege and then prove that she has standing — i.e., that she suffered a concrete and particularized injury-in-fact that is traceable to the defendant’s conduct and that is likely to be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc.,
In a post-judgment motion for reconsideration, which the district court correctly treated as a motion under Federal Rule of Civil Procedure 59(e), Lardas argued for the first time that Christofalos was a third-party beneficiary of her settlement agreement with the Grcics, such that the alleged scheme to deprive Christofalos of his interest in WSP in turn deprived Lardas of the benefit of her bargain. As a procedural matter, Lardas should have raised this argument during the initial briefing on defendants’ motion to dismiss. Rule 59(e) does not entitle a party to advance after judgment a non-jurisdictional argument that could have been presented prior to judgment. See Bordelon v. Chicago School Reform Board of Trustees,
In any event, the new argument is without merit. Christofalos wás himself a party to the same settlement agreement — not a third-party beneficiary — and he paid $600,000 for the LLC membership interest he- acquired from Slavko Grcic. Even if we assume that Christofalos might have had his own claims against Grcic or others arising from the settlement agreement (and any such claims would have wound up in his bankruptcy estate, addressed in the other related appeals), Lardas has alleged no injury personal to her. Nor has she offered any plausible reason why she should be able to assert a claim on behalf of Christofalos. Lardas lacks standing to pursue the claims she asserts, and the district court correctly dismissed her case. That dismissal is AFFIRMED.
II. Cohen (No. 15-1701)
Before Grcic and his associates could perfect their supposed scheme to acquire Christofalos’s interest in WSP, Christofa-los filed for bankruptcy protection. Cohen represents a challenge by Christofalos to a bankruptcy court order issued under 11 U.S.C. § 363(b) authorizing the trustee to sell Christofalos’s interest in WSP, as well as any interest he might have in the Lar-das litigation and a separate state court case. The buyers? None other than the Grcics, who paid $15,000 for these assets in
Christofalos’s appeal of the sale order rests on two rather remarkable premises. He argues first that by listing his stake in WSP as an exempt asset worth just one dollar, he actually was putting all interested parties on notice that he sought an “unlimited exemption” for that property, regardless of what the property might be worth or what it might potentially sell for. He argues second that the Grcics paid too much for the assets they acquired — the implication being that the bankruptcy court should have ordered the trustee to drive an easier bargain and settle for less money for the estate’s creditors in the process. The bankruptcy court rejected Christofalos’s arguments on their merits, and the district court affirmed.
We do not reach the merits. Chris-tofalos’s challenge to the trustee’s sale is moot. See DJL Farm LLC v. U.S. Environmental Protection Agency,
Christofalos opposed the sale of his interest in WSP through a motion to compel the trustee to abandon that property and through an objection to the trustee’s motion to sell. The bankruptcy court denied the motion to compel abandonment and approved the sale over Christofalos’s objection. At that point, if Christofalos wanted to seek judicial review of the sale order, he should have moved for a stay pursuant to Federal Rule of Bankruptcy Procedure 8007(a)(1)(A), thereby preserving the status quo.
Under 11 U.S.C. § 363(m), the reversal on appeal of an authorized sale “does not affect the validity of a sale ... to an entity that purchased ... property in good faith ... unless such authorization and such sale ... were stayed pending appeal.” In light of this safe harbor provision, we have “repeatedly held that when a party challenges the bankruptcy court’s order approving the sale of estate property to a good faith purchaser, it must obtain a stay of that order pending appeal, lest the
The safe harbor in section 363(m) does not apply if the sale was not conducted in good faith. Hower v. Molding Systems Engineering Corp.,
Christofalos did not request a stay of the sale order. Instead, the sale was consummated, and the Grcics are now actively managing the shopping plaza and its tenants. Money has changed hands, years have passed, and third parties have acted in reliance on the sale.
Christofalos argues that the Grcics acted in bad faith by offering $15,000 for an asset he believes to have been underwater. Christofalos’s argument is not legally sound, and it makes no sense on the facts of this case. He cites no case or other authority for the proposition that a buyer who pays (in the debtor’s view) too much for an asset acts in bad faith toward the debtor or other creditors. There may be perfectly good reasons to pay something for a highly leveraged asset that is currently. worthless. Fair market values rise ,and fall, and the purchase allows the buyer to make an investment that may pay off if the value later rises.
As a factual matter, moreover, even if the shopping plaza was financially underwater in 2014, that is not the actual asset the trustee sold: rather, the trustee sold Christofalos’s interest in WSP, which was apparently encumbered only by the lien in Slavko Grcic’s favor, and which was part of a package. The package of assets the trustee sold included three separate assets of the bankruptcy estate: Christofalos’s interest in WSP and his interest in two lawsuits against the Grcics. The Grcics paid $15,000 not only to acquire WSP but also to terminate the litigation against them. Parties in civil cases often choose to pay relatively small sums to settle claims, even claims that seem far-fetched or vexatious. We cannot understand how, in paying $15,000 for two unliquidated claims and an asset that Christofalos swore was worth only one dollar, the Grcics could be the parties who might be deemed to have acted in bad faith. There is no evidence that their conduct in the bankruptcy proceedings perpetrated a fraud on anyone, amounted to collusion with the trustee, or caused an unfair disadvantage to other bidders, of which there were none. See In re Andy Frain Services, Inc.,
In its sale order, the bankruptcy court explicitly found that the Grcics were “good faith purchasers” and that the sale was “conducted at arms-length without fraud, collusion, or undue influence by the purchasers.” The bankruptcy court reached these findings after three hearings and the submission of affidavits by the Grcics, the contents of which Christofalos failed to rebut. These findings are renewable only for clear error, Hower,
In Kienlen, Christofalos challenges the bankruptcy court’s November 23, 2015 order following an adversary proceeding brought by J. Laurence Kienlen, a creditor. The bankruptcy court conducted a trial on the adversary complaint pursuant to Part VII of the Federal Rules of Bankruptcy Procedure, and it made findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a)(1). The court entered judgment in Kienleris favor, denying Christofalos’s petition for a Chapter 7 discharge. The court based its denial on 11 U.S.C. § 727(a)(4)(A), which authorizes denial of discharge where the debtor has “knowingly and fraudulently ... made a false oath or account.” See Stamat v. Neary,
In its order denying discharge, the bankruptcy court observed that Chris-tofalos made a “host of false statements and omissions in his schedules and statement of financial affairs.” For instance, the court found that Christofalos falsely represented that he had issued no financial statements to financial institutions within two years of his petition. Christofalos also grossly undervalued his real property located in Mundelein, Illinois. He failed to identify a source of rental income, omitted a property located in Florida, and falsely asserted that he had relinquished all interest in another property following his divorce. He also omitted a vehicle and falsely represented that he had no contingent and unliquidated claims. The bankruptcy court found as a matter of fact after trial that Christofalos knew these representations were false and that he made them with fraudulent intent. The court explained: “Christofalos could not have cared less whether his schedules and statement of financial affairs were accurate.”
On appeal, Christofalos quarrels with some of the bankruptcy court’s factual findings, but without citing record evidence.
That assertion is not plausible. If Christofalos had succeeded in concealing or misrepresenting his assets, he might well have obtained a discharge while at the same time retaining property that rightfully belonged to the bankruptcy estate for the benefit of his creditors. In any case, materiality in the bankruptcy context has a broad meaning: “a fact is material ‘if it bears a relationship to the debtor’s business transactions or estate, or concerns the discovery of assets, business dealings, or the existence and disposition of the debtor’s property.’ ” Stamat,
Christofalos pleads for clemency, contending that it was not he but his attorney who could not have “ ‘cared less’ about the accuracy of the schedules” and that it would be a “gross injustice to penalize Christofalos for the incompetence of his counsel.” The brief making this argument was filed by the same attorney, Maurice Salem, who accuses himself of incompetence. Whether attorney Salem committed malpractice or violated the Illinois Rules of Professional Conduct is not before this court. But Salem himself testified in the adversary proceeding that he reviewed the schedules and statement of financial affairs with his client, paragraph by paragraph. That evidently unrebutted testimony supports the bankruptcy court’s conclusion that Christofalos’s misstatements were not inadvertent but were intentional and' fraudulent. The denial of Christofalos’s petition for a Chapter 7 discharge is AFFIRMED. Given the gravity of the apparent misconduct here, we are referring this case to the United States Attorney for the Northern District of Illinois for further review.
IV. Lardas II (No. 16-1210)
In Lardas II, Christofalos appeals the denial of his “Motion to Reopen Case and Assign a Receiver” and his subsequent motion for reconsideration, both of which he filed in Lardas’s ease in district court while that case remained under advisement in this court in Appeal No. 15-1685. Christofalos cited no authority for his “Motion to Reopen.” Because he is no longer a plaintiff in his aunt’s case — the district court dismissed the original complaint and Lardas re-filed as sole plaintiff — we assume he sought both permissive intervention under Federal Rule of Civil Procedure 24(b) and then relief from a final judgment
The relief Christofalos seeks would be unusual under any circumstances. “Permissive intervention under Rule 24(b) is wholly discretionary,” Sokaogon Chippewa Community v. Babbitt,
Notes
. Christofalos was originally a co-plaintiff 'in this action, but the district court dismissed the initial complaint without prejudice. Lar-das filed an amended complaint as the sole plaintiff.
. Federal district courts exercise appellate jurisdiction over "final judgments, orders, and decrees” entered by bankruptcy judges in "cases and proceedings.” 28 U.S.C. § 158(a). Federal circuit courts of appeals in turn exercise appellate jurisdiction over "final decisions, judgments, orders, and decrees” entered by district judges in their appellate capacity. § 158(d)(1); see also Smith v. Capital One Bank (USA), N.A.,
. Christofalos designated only the adversary pleadings, the transcript of the bankruptcy court’s November 23, 2015 oral decision, and the bankruptcy court’s subsequent judgment as the record on appeal in the district court. He did not designate or otherwise produce any transcripts or exhibits from the trial, either in the district court or in this court. We cannot entertain claims that factual findings were clearly erroneous when the party claiming error fails to include in the appellate record the evidence we would need to evaluate the claim. See Fed. R. Bankr. P. 8009(a)(1)(A), (b)(1)(A) (providing that the bankruptcy appellant must designate items to be included in the record on appeal and must order transcripts of "such parts of the proceedings ... as the appellant considers necessary for the appeal”); see also Fed. R. Bankr. P. 8009(b)(5) ("If the appellant intends to argue on appeal that a finding or conclusion is unsupported by the evidence or is contrary to the evidence, the appellant must include in the record a transcript of all relevant testimony and copies of all relevant exhibits.”); cf. In reDomer,