Radnor Holdings Corp v. , 629 F. App'x 277 ( 2015 )

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
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No. 14-3794
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In re: RADNOR HOLDINGS CORPORATION, et al.
Debtors
MICHAEL T. KENNEDY,
Appellant
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Appeal from the United States District Court
for the District of Delaware
(D.C. Civil Action No. 1-13-cv-01398)
District Judge: Honorable Sue L. Robinson
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Submitted Under Third Circuit LAR 34.1(a)
November 19, 2015
Before: AMBRO, NYGAARD, and RENDELL, Circuit Judges
(Opinion filed: December 10, 2015)
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OPINION*
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AMBRO, Circuit Judge
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Radnor Holdings Corporation filed for Chapter 11 bankruptcy protection in 2006.
The Bankruptcy Court authorized Skadden, Arps, Slate, Meagher & Flom LLP to serve
as bankruptcy counsel and approved Skadden’s final fee application in June 2013.
Michael Kennedy had filed objections to the final fee application and appealed to the
District Court. It affirmed the decision of the Bankruptcy Court and Kennedy has
appealed pro se the District Court’s order.1 We affirm.
I.
After filing for bankruptcy, Radnor applied to the Bankruptcy Court for an order
authorizing it to retain Skadden. The United States Trustee objected because Skadden
had disclosed that it represented Tennenbaum Capital Partners LLC in unrelated matters.
At the time, Tennenbaum owned stock in Radnor and controlled one of Radnor’s four
board seats. In September 2006, the Bankruptcy Court conducted a hearing and entered
an order approving Skadden’s application. Based on Skadden’s disclosures, the Court
concluded that Tennenbaum was not a significant client and that Skadden’s relationship
with it was not a disabling conflict of interest. Shortly thereafter, Tennenbaum purchased
all of Radnor’s stock and assets through a bankruptcy sale after attempts at a restructuring
proved unsuccessful.
Fast forward to November 2012, when Skadden filed its final fee application.
Kennedy (then represented by counsel) filed written objections. After a two-day
evidentiary hearing and post-hearing briefing, the Bankruptcy Court overruled Kennedy’s
objections and approved the fee application.
1
Kennedy was a lawyer and member of the Pennsylvania bar from 1998 to 2003.
2
On appeal by Kennedy, the District Court affirmed the Bankruptcy Court’s
decision. He now appeals to us.2
II.
“Our review of the District Court’s decision effectively amounts to review of the
[B]ankruptcy [C]ourt’s opinion in the first instance.” In re Hechinger Inv. Co. of
Delaware, 298 F.3d 219, 224 (3d Cir. 2002). We review the latter’s factual findings for
clear error, any questions of law de novo, and the approval of the fee application for
abuse of discretion. Zolfo, Cooper & Co. v. Sunbeam-Oster Co., 50 F.3d 253, 257 (3d
Cir. 1995).
III.
Kennedy argues that the Bankruptcy Court abused its discretion in granting the fee
application because Skadden’s pre-retention disclosures failed to comply with
Bankruptcy Rule 2014. Under that Rule, a debtor’s application to employ an attorney
shall state, “to the best of the applicant’s knowledge,” the attorney’s “connections with
the debtor, creditors, [and] any other party in interest.” Fed. R. Bank. P. 2014. Kennedy
alleges that Skadden failed to disclose in its application to the Bankruptcy Court certain
investments in Tennenbaum and its affiliates. The Bankruptcy Court disagreed. After
reviewing all the evidence and conducting an in-person hearing, it found that Skadden
had not misrepresented its relationship with Tennenbaum. Kennedy has not shown that
2
The District Court had jurisdiction over the final order of the Bankruptcy Court under
28 U.S.C. § 158(a). We have jurisdiction over the District Court’s order per 28 U.S.C.
§ 158(d).
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this finding was clearly erroneous and, absent any violation of Rule 2014, the Bankruptcy
Court did not abuse its discretion in approving the fee application.
Kennedy also contends that Bankruptcy Court erred in 2006 in approving Skadden
as bankruptcy counsel because it was not disinterested, as required by 11 U.S.C. § 327.
But any challenge to the Bankruptcy Court’s initial approval of Skadden is not properly
before us because Kennedy never appealed the retention order or previously identified the
order as an issue for this appeal. Shareholders v. Sound Radio, Inc., 109 F.3d 873, 879
(3d Cir. 1997) (“The failure to file a timely notice of appeal creates a jurisdictional defect
barring appellate review.”); F/S Airlease II, Inc. v. Simon, 844 F.2d 99, 104 (3d Cir.
1988) (holding Bankruptcy Court order approving retention of a law firm retroactively
was appealable order). Kennedy asserts that we have jurisdiction because the Bankruptcy
Court “reaffirmed” the 2006 order in 2013 when it approved the final fee application.
Nowhere in the Bankruptcy Court’s opinion, however, did it purport to reaffirm an earlier
order.
Kennedy next claims that the Bankruptcy Court’s factual findings in its 2013
opinion were clearly erroneous because it failed to consider evidence of Skadden’s
willful misconduct. This is incorrect. The Bankruptcy Court noted that it had considered
the entire record before approving the fee application, and Kennedy is unable to identify
any particular evidence that was omitted. In effect, he is arguing that the Bankruptcy
Court did not construe the evidence in order to reach his desired conclusions. This is not
a ground for reversal. In re Myers, 491 F.3d 120, 126 (3d Cir. 2007) (“The [B]ankruptcy
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[C]ourt is best positioned to assess the facts, particularly those related to
credibility . . . .”).
Finally, Kennedy argues that the Bankruptcy Court abused its discretion in
denying his motion to vacate the sale and confirmation orders entered in Radnor’s
bankruptcy. The Court denied the motion as time-barred in April 2013 and Kennedy
never appealed the order or raised this issue for appeal. Accordingly, any challenge to
that denial is not properly before us. Shareholders, 109 F.3d at 879.
* * * * *
We thus affirm the decision of the District Court affirming the ruling of the
Bankruptcy Court.
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