In Re Richard H. Friedberg , 634 F. App'x 333 ( 2016 )

15-779
In re Richard H. Friedberg
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
New York, on the 24th day of February, two thousand sixteen.
PRESENT:
RALPH K. WINTER,
PETER W. HALL,
CHRISTOPHER F. DRONEY,
Circuit Judges.
_____________________________________
In re: Richard H. Friedberg,
Debtor.
Richard H. Friedberg,
Debtor-Appellant,
v.
15-779
Melissa Zelen Neier,
Chapter 7 Trustee-Appellee.
_____________________________________
FOR DEBTOR-APPELLANT: Richard H. Friedberg, pro se, Vero
Beach, FL.
FOR APPELLEE: Melissa Zelen Neier, Esq., Ivey,
Barnum & O’Mara LLC, Greenwich,
CT.
Appeal from a judgment of the United States District Court for the District of Connecticut
(Covello, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Debtor-Appellant Richard H. Friedberg, proceeding pro se, appeals the judgment of the
district court affirming the bankruptcy court’s order approving a settlement of all claims against
his bankruptcy estate. We assume the parties’ familiarity with the underlying facts, the
procedural history of the case, and the issues on appeal.
We conduct a plenary review when a bankruptcy appeal reaches us after district court
review of the bankruptcy court order, assessing the bankruptcy court’s legal conclusions de novo
and its factual findings for clear error. In re N. New England Tel. Operations LLC, 795 F.3d 343,
346 (2d Cir. 2015).
“[T]o have standing to appeal from a bankruptcy court ruling, an appellant must be a
person aggrieved—a person directly and adversely affected pecuniarily by the challenged order of
the bankruptcy court.” In re Barnet, 737 F.3d 238, 242 (2d Cir. 2013) (internal quotation
omitted). “[A] Chapter 7 debtor is a ‘party in interest’ and has standing to object to a sale of the
assets, or otherwise participate in litigation surrounding the assets of the estate, only if there could
be a surplus after all creditors' claims are paid.” In re 60 E. 80th St. Equities, Inc., 218 F.3d 109,
115 (2d Cir. 2000).
Upon review, we conclude that the bankruptcy court correctly held that Friedberg lacked
standing to oppose the approval of the settlement agreement because he had no pecuniary interest
directly and adversely affected by the bankruptcy court’s order adopting the settlement. The
settlement provided for the distribution to Friedberg’s creditors of the proceeds from the sale of the
estate’s real property in Cortland Manor, New York (the “Property”). The Property was sold for
$2.3 million. After accounting for administrative expenses, just over $1.9 million remained for
distribution to creditors pursuant to the proposed settlement. This amount was far less than the
allowed creditor claims against the estate; the priority claim of Marianne Howatson alone was for
$2.725 million. The bankruptcy court therefore found that a surplus after payment of the
creditors’ claims was a mathematical impossibility. This finding was not error, much less clear
error. Consequently, Friedberg could not have received a distribution from the estate regardless
of the terms of the settlement. His only other interest in the settlement proceedings was an
exemption he had claimed, which was provided for in the settlement agreement. Absent an
adversely affected pecuniary interest, Friedberg lacked standing to oppose the settlement. See In
re Barnet, 737 F.3d at 242–43; In re 60 E. 80th St. Equities, Inc., 218 F.3d at 115–16.
Friedberg argues that he has standing based on the surplus that he imagines would have
remained had the Property been sold for what he believes was its true value. This argument is
without merit. The assertions regarding the Property’s “true” value are conclusory and
speculative. They are, moreover, irrelevant to this appeal. Friedberg’s arguments do not relate
to the reasonableness of the bankruptcy court’s approval of the settlement, but to the validity of the
auction sale that produced the proceeds distributed by the agreement. However, he has already
unsuccessfully appealed the bankruptcy court’s order authorizing the sale of the Property. The
district court dismissed that appeal as barred by 11 U.S.C. § 363(m). “Th[at] section creates a
rule of ‘statutory mootness,’ which bars appellate review of any sale authorized by 11 U.S.C. §
363(b) or (c),” as was the case here, “so long as the sale was made to a good-faith purchaser and
was not stayed pending appeal.” In re WestPoint Stevens, Inc., 600 F.3d 231, 247 (2d Cir. 2010)
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(internal citations omitted). When § 363(m) is applicable, courts “may neither reverse nor modify
the judicially-authorized sale.” Id. at 248 (emphasis omitted). Here, the sale of the Property was
not stayed pending appeal, and, as found by the district court, there is no basis upon which to
conclude that the purchaser was not a purchaser in good faith. Consequently, the sale of the
Property is immune to Friedberg’s challenge, and he cannot rely on its alleged deficiencies to cure
his lack of standing.
We have considered all of Friedberg’s arguments and find them to be without merit.
Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O=Hagan Wolfe, Clerk
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