Sears, et al. v. Badami, No. 11-2282 (8th Cir. 2013)
Annotate this CaseAppellants appealed the district court's dismissal of all of their appeals concerning the purchase agreements to jointly-owned property and the underlying bankruptcy court orders. The property was owned by Sears Cattle and AFY, a debtor in bankruptcy. The court concluded that 11 U.S.C. 363(m) mooted the Tract 1 appeal. Appellants' failure to preserve their appeal of the district court's holding that Sears Cattle did not object to the motion to pay funds precluded the court from addressing Sears Cattle's appeal of the order to pay funds to the district court. Accordingly, the court affirmed the district court's holding that Sears Cattle could not appeal the order. Because the Sears could not assert a direct interest in the litigation, they lacked appellate standing for bankruptcy purposes under the shareholder standing rule. Accordingly, the district court did not err in finding the Sears lacked standing to appeal the order to pay funds. Because AFY was not a debtor-in-possession, the trustee had standing to move to convert. The court rejected the Sears' remaining arguments. Accordingly, the court affirmed the judgment of the district court.
Court Description: Civil case - Bankruptcy. The district court properly determined that the provisions of 11 U.S.C. Sec 363(m)mooted the appeal from the bankruptcy court's order permitting the trustee to assume the purchase agreement for a tract of property; appellants failed to preserve their appeal of the district court's holding that Sears Cattle did not object to the motion to pay funds; because the Sears appellants cannot assert a direct interest in the litigation, they lack appellate standing for bankruptcy purposes under the shareholder standing rule; the trustee had standing to move to convert the proceeding from a Chapter 11 to a Chapter 7 as debtor was not a debtor-in-possession; the possible solvency of debtor's estate does not give the Sears appellants standing to challenge the conversion order; all of the Sears appellants' other standing arguments regarding the conversion order are rejected, and the district court correctly determined they lacked standing to appeal the conversion order.
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