IN RE: HUMAN HOUSING HENRIETTA HYATT, LLC, CLEARVIEW EASTERN FUND, LLC; PAULETTE LONG; CLARISSE CLEMONS-FERRARA v. ELIZABETH Z. WOODWARD, Trustee - Articles

All Content

IN RE: HUMAN HOUSING HENRIETTA HYATT, LLC, CLEARVIEW EASTERN FUND, LLC; PAULETTE LONG; CLARISSE CLEMONS-FERRARA v. ELIZABETH Z. WOODWARD, Trustee

Posted by: Azya Thornton on Jan 21, 2025

Court: 6th Circuit Court (Published Opinions)

Attorneys 1: ARGUED: Peter M. Gannott, GANNOTT LAW GROUP, PLLC, Louisville, Kentucky, for Appellants.

Attorneys 2: ARGUED: Andrew D. Stosberg, GRAY ICE HIGDON, PLLC, Louisville, Kentucky, for Appellee.

Attorneys 3: ON BRIEF: Peter M. Gannott, GANNOTT LAW GROUP, PLLC, Louisville, Kentucky, for Appellants.

Attorneys 4: ON BRIEF: Andrew D. Stosberg, GRAY ICE HIGDON, PLLC, Louisville, Kentucky, for Appellee.

Judge(s): GREGG, GUSTAFSON, and MASHBURN, Bankruptcy Appellate Panel Judges

Court Appealed: United States Bankruptcy Court for the Western District of Kentucky at Louisville

RANDAL S. MASHBURN, Chief Bankruptcy Appellate Panel Judge. An effort to raise an issue for the first time at the appellate level is destined for failure. That lesson applies here, resulting in affirmance of the bankruptcy court. A Chapter 11, Subchapter V, debtor’s owners and a related, non-creditor third-party appealed orders approving the sale of the debtor’s real property pursuant to a confirmed plan that allowed the plan trustee wide discretion in conducting a sale. The owners failed to participate in the bankruptcy sale proceedings in any meaningful way. Although the related third-party participated, it was merely as a competing bidder in the context of a private sale, with only its desire to purchase the debtor’s assets arguably being impaired by the sale orders. Therefore, it lacks standing to appeal the orders. The third-party did make an untimely and untested allegation of having pre-existing purchase contracts for some of the properties. To the extent the alleged contractual interest shows an impaired pecuniary interest and thus standing, the third-party did not preserve its appeal rights. Neither the third-party nor the debtor’s owners obtained a stay of the sale orders. On appeal, appellants seek a complete reversal of the sale orders and the consummated sales. By not obtaining a stay, appellants are limited on appeal by 11 U.S.C. § 363(m) to challenging the purchasers’ good faith. All appellants waived any such argument by not raising it during the bankruptcy court proceedings. Similarly, the Appellants waived any challenge to the Howe Compensation Orders by not objecting to the relief requested in the bankruptcy court proceedings. The Howe Compensation Orders are also affirmed.

Attachments: