Highland Captl v. Highland Captl Mgmt, No. 22-10189 (5th Cir. 2023)
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Following the bankruptcy court’s confirmation of its reorganization plan, Highland Capital Management, L.P. filed a motion with the bankruptcy court seeking entry of an order authorizing the creation of an indemnity subtrust. Over several objections, the bankruptcy court entered an order approving the motion. Several objectors appealed, arguing that the order impermissibly modified the plan. Dugaboy, NexPoint, and HCMFA (collectively, “Appellants”), as well as Dondero, objected to the motion, arguing that it was a modification to the Plan requiring solicitation, voting, and confirmation under § 1127(b) of the Bankruptcy Code. The bankruptcy court disagreed and granted the motion in an order authorizing the creation of the Indemnity Sub-Trust on July 21, 2021 (the “Order”). The district court affirmed the bankruptcy court’s order and dismissed several of Appellants from the appeal. Appellants then sought review in this court.
The Fifth Circuit dismissed in part and affirmed in part the district court’s judgment. The court explained that Appellants’ statement of the issues on appeal includes the district court’s affirmance of the Order; however, it does not include the district court’s partial dismissal of the appeal on the basis that HCMFA and Dugaboy lacked standing. Therefore, Appellants did not preserve for appeal a challenge to the district court’s partial dismissal below for lack of standing. The appeals of HCMFA and Dugaboy remain dismissed below and, for this reason, they must be dismissed from the current appeal as well.
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