United States District Court, W.D. Pennsylvania
ARTHUR J. SCHWAB, District Judge.
Before the Court is Appellant/Debtor's (hereinafter "Rock Airport's") Appeal from the Bankruptcy Court's Order dated August 8, 2014, filed at document number 832. See Bankruptcy No. 09-23155-CMB, doc. no. 832. In this Appeal, Rock Airport contends that Appellee (hereinafter "MSA") did not have standing to file a plan of reorganization in the bankruptcy case. See doc. no. 6. MSA counters that Rock Airport's appeal has been rendered moot by two subsequent Bankruptcy Court Orders, both entered on September 16, 2014, the first of which confirmed the Trustee's plan of liquidation, and the second which approved the sale of Rock Airport's assets free and clear of all liens, claims, and encumbrances. See doc. no. 7.
I. Jurisdiction and Standard of Review
This Court has jurisdiction over this appeal pursuant to 28 U.S.C. § 158(a). A District Court sits as an appellate court in bankruptcy proceedings. In re Michael, 699 F.3d 305, 308 n.2 (3d Cir. 2012).
The standards of review that apply to this case are as follows:
First, this Court cannot disturb the factual findings of a bankruptcy court unless they are clearly erroneous. In re Gray, 558 Fed.Appx. 163, 166 (3d Cir. 2014); see also Accardi v. IT Litig. Trust (In re IT Group, Inc.), 448 F.3d 661, 667 (3d Cir. 2006). A factual finding is "clearly erroneous" if the reviewing court is "left with a definite and firm conviction that a mistake has been committed." In re W.R. Grace & Co., 729 F.3d 311, 319, n.14 (3d Cir. 2011); see also Gordon v. Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005). Under the clearly erroneous standard, it is the responsibility of an appellate court to accept the ultimate factual determinations of the fact-finder unless that determination is either: (1) completely devoid of minimum evidentiary support displaying some hue of credibility or (2) bears no rational relationship to the supportive evidentiary data." DiFederico v. Rolm Co., 201 F.3d 200, 208 (3d Cir. 2000) (citations omitted).
Second, this Court exercises plenary, or de novo, review over any legal conclusions reached by the bankruptcy court. In re Ruitenberg, 745 F.3d 647, 650 (3d Cir. 2014); see also Am. Flint Glass Workers Union v. Anchor Resolution Corp., 197 F.3d 76, 80 (3d Cir. 1999).
Third, if the Bankruptcy Court's decision is a mixed question of law and fact, this Court must break down the determination and apply the appropriate standard of review to each. In re Montgomery Ward Holding Corp., 326 F.3d 383, 387 (3d Cir. 2003). The Court should "apply a clearly erroneous standard to integral facts, but exercise plenary review of the court's interpretation and application of those facts to legal precepts." In re Nortel Networks, Inc., 669 F.3d 128, 137 (3d Cir. 2011) (citation omitted).
Finally, this Court reviews a bankruptcy court's exercise of discretion for abuse. In re Friedman's Inc., 738 F.3d 547, 552 (3d Cir. 2013). A bankruptcy court abuses its discretion when its ruling rests upon an error of law or a misapplication of law to the facts. In re O'Brien Environmental Energy, Inc., 188 F.3d 116, 122 (3d Cir. 1999).
II. Factual and Procedural Background
Because this Court has written several extensive Opinions this year in several related cases - see case nos. 14-cv-0085 (Court Opinion at doc. no. 6), 14-cv-0086 (Court Opinion at doc. no. 6), 14-cv-0091 (Court Opinion at doc. no. 12), 14-cv-1105 (Court Opinion at doc. no. 3), and 14-cv-1314 (Court Opinion at doc. no. 4) - it will not belabor the underlying facts.
The relevant facts of importance to this appeal are as follows:
This Appeal was taken from a Bankruptcy Court Order that denied in part Rock Airport's Motion for Limited Reconsideration of a prior (July 21, 2014) Order that had approved MSA's Amended Disclosure Statement to Accompany Plan, and simultaneously scheduled a plan confirmation hearing. See doc. no. 832 in Bankruptcy docket no. 09-23155-CMB, (hereinafter "Order Number 832"). The Bankruptcy Court's July 21, 2014 Order held that MSA had standing to advance its own Reorganization Plan, and Rock Airport's Motion for Reconsideration of that Order, sought clarification as to MSA's standing.
The Bankruptcy Court, in Order Number 832, began by acknowledging that Rock Airport's Motion for Reconsideration sought clarification of the Bankruptcy Court's July 21, 2014 Order to the extent it "implicitly" ruled that MSA had standing to prosecute its own Reorganization Plan. See doc. no. 832 in Bankruptcy docket no. 09-23155-CMB, p. 2. The Bankruptcy Court noted that it held a hearing on this Motion for Reconsideration on August 6, 2014, and entered Order Number 832, granting Rock Airport's request for clarification. The Bankruptcy Court "clarified" its prior (July 21, 2014) Order by "explicitly" ruling that MSA was a party in interest. As ...