In Re: Integra Realty Resourses et al. v. Fidelity Capital Appreciation Fund, RACQUEL-DIVISION
| Citation | 262 F.3d 1089 |
| Decision Date | 21 December 1983 |
| Docket Number | RACQUEL-DIVISION |
| Parties | (10th Cir. 2001) In re: INTEGRA REALTY RESOURCES, INC.; INTEGRA - A HOTEL AND RESTAURANT COMPANY; BHC OF DENVER, INC., Debtors. JEFFREY A. WEINMAN, as Trustee for the Integra Unsecured Creditors' Trust, Plaintiff - Appellee, v. FIDELITY CAPITAL APPRECIATION FUND, Defendant - Appellee, AD HOC PROTECTIVE COMMITTEE FOR SHOW BIZ STOCKHOLDERS; RODNEY J. AXTELL, individually and as custodian for JONATHAN AXTELL; MARY E. AXTELL; EUNICE H. BECK; ROBERT R. BECK; RICHARD H. BECK; ELEANOR S. BECK; MICHAEL BENENSON; KERRI BENESON, as Trustees; JULIUS B. BINDER, as Trustee; BINDERS' BIG MEN'S STORE, INC.; JAMES BOGEAZIS; JOSEPH M. COCQUOYT; MAURICE GARDLER; DAVID GARDNER; MARTIN GREENBERG; LEON GREDAHL; ROBERT J. HARRIS; MICHAEL J. HAYES; EDWARD HERZIG; RODNEY WILLIAM KENNOW; RICHARD O. JACOBSON; FERN LAZAR; MURRAY LAZAR; KATHRYN L. LUDGREN; JOSEPH MASTRANGELO; CHARLES H. MORIN; HERBERT NADLER; ROCHELLE NADLER; FRANK NICHOL; BARBARA NICHOL; ROBERT V. PALAN, individually and as custodian for David Barry; CHARLES POTTER;OF BINDER'S BIG MEN'S STORE; GLADYS RYAN; DONALD J. RESNICK; RACHNALL SCHLAFSTEIN; SYDELLE SCHECHTER; JOHN T. SHEEHY; CARL SCHECHTER; SEIDMAN & SEIDMAN, PC PROFIT SHARING TRUST; JAMES R. SHAPIRO; LEON D. SHELDAHL; IRVING SIROTA; E. THOMAS SPENGLER; HJALMAR J. SUNDIN, as Trustee; FREDERICK K. WATSON, JR.; BEN WONG, JR.; BENJAMIN B. WONG; GRACE C. WONG; VANCE E. VORHEES; LAWRENCE ZUCKER, and any and all additional parties who either have joined or will join the said Committee, Defendants - Appellants. JEFFREY A. WEINMAN, as Trustee for the Integra Unsecured Creditors' Trust, Plaintiff - Appellee, v. FIDELITY CAPITAL APPRECIATION FUND, Defendant - Appellee, AD HOC PROTECTIVE COMMITTEE FOR SHOW BIZ STOCKHOLDERS; RODNEY J. AXTELL, individually and as custodian for JONATHAN AXTELL; MARY E. AXTELL; KAMAL BARSOUM; EUNICE H. BECK; ROBERT R. BECK; RICHARD H. BECK; ELEANOR S. BECK; MICHAEL BENENSON; KERRI BENESON, as Trustees; JULIUS B. BINDER, as Trustee; BINDERS' BIG MEN'S |
| Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Appeal from the United States District Court for the District of Colorado. (D.C. No. 94-WM-2581) [Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted] I. Walton Bader, Bader and Bader, White Plains, New York, for the Defendants-Appellants in case numbers 99-1344, 99-1416, 99-1477, 99-1468, and 99-1546.
James S. Dittmar, Hutchins, Wheeler & Dittmar, P.C., Boston, Massachusetts (Tucker K. Trautman, Dorsey & Whitney, Denver, Colorado and Richard R. Lavin, FMR Corp., Boston, Massachusetts, with him on the briefs), for Defendant-Appellee Fidelity Capital Appreciation Fund.
John C. Smiley, Harold G. Morris, Jr., Patrick D. Frye of Lindquist, Vennum & Christensen, P.L.L.P., Denver, Colorado, filed a brief on behalf of the Plaintiff-Appellee Jeffrey A. Weinman.
Jeffrey J. Greenbaum, Sills Cummis Radin Tischman Epstein & Gross, P.A., Newark, N.J. (Steven J. Gorelick, Sills Cummis Radin Tischman Epstein & Gross, P.A., Newark, N.J.; and Chesley K. Culp III and Dianne M. Kueck, Moye, Giles, O'Keefe, Vermeire & Gorrell, LLP, Denver, Colorado, with him on briefs), for Defendants-Appellants in case numbers 99-1483, 99-1498 and 99-1523.
Before EBEL and ANDERSON, Circuit Judges,and BRORBY, Senior Circuit Judge.
The defendant class action giving rise to the multiple appeals addressed in this opinion was filed under the federal Bankruptcy Code, 11 U.S.C. 105, 544, 550, 1123 and 1145, to recover the value of assets of a bankrupt corporation which were spun off to shareholders prior to the bankruptcy. The events giving rise to the action began in 1988, when Integra Realty Resources, Inc. ("Integra"), a hotel and restaurant company, spun off its restaurant business to its shareholders to form ShowBiz Pizza Time, Inc. ("ShowBiz"), a separate corporation. At the time, Integra was experiencing significant business losses and it declared bankruptcy in 1992. In 1994, Integra's unsecured creditors filed suit against all shareholders who received ShowBiz stock to recover the value of the shares for Integra's estate.
The case was initially assigned to a bankruptcy court, which certified the suit as a mandatory defendant class action pursuant to Rule 23(b)(1) and designated seven representative defendants, including Fidelity Capital Appreciation Fund ("Fidelity"),1 Integra's largest shareholder at the time of the spinoff, to act on behalf of the class defendants. In addition, the court appointed Fidelity's counsel to act as sole counsel for the class in spite of objections that Fidelity itself raised to serving as a class representative. Following the certification of the class, the district court withdrew its reference of the case to the bankruptcy court except for pretrial procedures. Fidelity filed an unsuccessful motion to dismiss the suit, and then negotiated a settlement allowing individual defendant shareholders either (1) to accept the agreement and pay damages; (2) to accept the agreement and raise a limited number of individual defenses; or (3) to opt out of the settlement and continue litigating the case before the district court. The district court approved the settlement agreement, and the vast majority of class defendants either accepted the settlement or entered into individual settlement agreements with the unsecured creditors.
Following entry of final judgment implementing the settlement by the district court, several appeals were nonetheless filed challenging the court's approval of the settlement agreement and numerous underlying orders. Eight separate appeals were consolidated into two appeals for the purposes of briefing and oral argument under Rule 3(b)(2) of the Federal Rules of Appellate Procedure. These two appeals have been further consolidated for disposition within this opinion.2 Appellants challenge, inter alia, the propriety of certifying the suit to a bankruptcy judge for pretrial proceedings, the bankruptcy court's decision to certify a class under Rule 23(b)(1)(A) of the Federal Rules of Civil Procedure, and Fidelity's adequacy as a class representative. For reasons stated herein, we DISMISS each of the appeals for lack of standing.
This appeal arises from Integra's December 1988 spinoff of ShowBiz Pizza Time, Inc. to its shareholders. Integra, which owned a ninety-percent stake in ShowBiz, issued shareholders a dividend of 0.429 ShowBiz shares for each share of Integra owned by the recipient. At the time of the spinoff, Integra was controlled by the Hallwood Group Inc. ("Hallwood")...
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