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Wilbar Realty, Inc. v. Pennsylvania Infrastructure Investment Authority

March 10, 2006

WILBAR REALTY, INC., APPELLANT,
v.
PENNSYLVANIA INFRASTRUCTURE INVESTMENT AUTHORITY, APPELLEE.



The opinion of the court was delivered by: Judge Caputo

MEMORANDUM

Presently before the Court is Appellee's Motion to Dismiss (Doc. 9). For reasons set forth below, I will deny the motion. The Court has jurisdiction pursuant to 28 U.S.C. § 158(a).

BACKGROUND

Wilbar Realty, Inc. is the debtor in a Chapter 11 bankruptcy case (Case No. 5-00-01242) pending in the United States Bankruptcy Court for the Middle District of Pennsylvania (the "Bankruptcy Court"). From the date of filing the Bankruptcy Case, on April 7, 2000, Wilbar operated as a debtor-in-possession until October 14, 2003. On October 14, 2003, the Bankruptcy Court issued an order appointing Robert P. Sheils, Esq., ("Trustee") as trustee for Wilbar.

Prior to the appointment of the trustee, on April 30, 2001, Wilber filed a complaint against Pennsylvania Infrastructure Investment Authority ("PENNVEST") in the Bankruptcy Court seeking to avoid PENNVEST's lien, in an amount in excess of $1,300,000.00, on Wilbar's revenues. PENNVEST filed a related cross-appeal. The Bankruptcy Court held proceedings on the motions over four days. On March 16, 2005, the Bankruptcy Court issued a decision entering judgment in favor of PENNVEST.

On March 25, 2005, Wilbar filed an a notice of appeal of the Bankruptcy Court's March 16, 2005 order. The notice of appeal was filed by David A. Harris, Esq., and Kimberly D. Borland, Esq., who had been retained by Wilbar while Wilbar was a debtor-in-possession. David Harris, Esq., and Kimberly Borland, Esq. had not been retained by the Trustee in connection with this matter, and the Trustee did not file an appeal of the Bankruptcy Court's March 16, 2005 order. PENNVEST filed a Motion to Dismiss Wilbar's appeal on May 12, 2005. (Doc. 9.)

On May 19, 2005, United States Bankruptcy Court Judge John J. Thomas approved the application of the Trustee to sell the assets of Wilbar for the amount of $1,625,000.00.

On June 6, 2005, Bankruptcy Judge Thomas, upon application by the Trustee, appointed Kimberly D. Borland, Esq. as special counsel for the Trustee in connection with the prosecution of the present appeal of the Bankruptcy Court's March 16, 2005 decision. (Doc. 20-2, at 1.)

On June 10, 2005, the Trustee filed a motion with the Court seeking permission to join Wilbar's Notice of Appeal. (Doc. 21.) I granted the Trustee's motion for joinder on June 30, 2005. (Doc. 24.)

DISCUSSION

PENNVEST asserts that no valid timely appeal has been taken from the Bankruptcy Court's March 16, 2005 decision and, therefore, this Court is without jurisdiction to hear Wilbar's appeal. Specifically, PENNVEST argues that pursuant to Rule 2012(a) of the Federal Rules of Bankruptcy Procedure*fn1 the Trustee was automatically substituted in place of Wilbar as a party in the relevant proceeding, and, as such, the Trustee was the only party having standing to appeal the Bankruptcy Court's March 16, 2005 decision. The parties agree that the Trustee did not file any appeal within the ten-day time limit required by Rule 8002 of the Federal Rules of Bankruptcy Procedure. Wilbar, however, argues that: (1) its notice of appeal was filed within the tenday time limit; (2) the appeal cannot be dismissed because the Trustee has ratified Wilbar's Notice of Appeal; and (3) Wilbar is entitled to file the Notice of Appeal on its own behalf as a "person aggrieved" by the Bankruptcy Court's March 16, 2005 decision.

Since I find, for the following reasons, that Wilbar is a "person aggrieved" by the Bankruptcy Court's March 16, 2005 decision, I need not determine whether the Trustee was the only party with standing to appeal or whether the Trustee has ratified Wilbar's Notice of Appeal.

1. "Person Aggrieved"

The "person aggrieved" rule states that only those whose pecuniary interests are directly and adversely affected by a bankruptcy court order that "diminishes their property, increases ...


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