3 F.3d 49 (2nd Cir. 1993), 1151, In re Integrated Resources

Docket Nº:1151, Docket 92-5086.
Citation:3 F.3d 49
Party Name:In re INTEGRATED RESOURCES, INC., also doing business as IRI Services, Inc., Debtor. The OFFICIAL COMMITTEE OF SUBORDINATED BONDHOLDERS, Appellant, v. INTEGRATED RESOURCES, INC., Bankers Trust New York Corporation, Appellees.
Case Date:August 13, 1993
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 49

3 F.3d 49 (2nd Cir. 1993)

In re INTEGRATED RESOURCES, INC., also doing business as IRI

Services, Inc., Debtor.

The OFFICIAL COMMITTEE OF SUBORDINATED BONDHOLDERS, Appellant,

v.

INTEGRATED RESOURCES, INC., Bankers Trust New York

Corporation, Appellees.

No. 1151, Docket 92-5086.

United States Court of Appeals, Second Circuit

August 13, 1993

        Argued March 10, 1993.

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        Martin S. Siegel, New York City (Edward S. Weisfelner, Carole L. Fern, John P. Biedermann, Berlack, Israels & Liberman, of counsel), for appellant.

        Thomas J. Moloney, New York City (Shari Siegel, Cleary, Gottlieb, Steen & Hamilton, of counsel), for appellee Bankers Trust New York Corp.

        Brian E. O'Connor, New York City (Myron Trepper, Daniel J. Aaron, Willkie Farr & Gallagher, of counsel), for appellee Integrated Resources, Inc.

        Before: CARDAMONE and MAHONEY, Circuit Judges, and KEENAN, [*] District Judge.

        MAHONEY, Circuit Judge:

        The Official Committee of Subordinated Bondholders (the "Committee") appeals from a judgment entered on November 24, 1992 in the United States District Court for the Southern District of New York, Michael B. Mukasey, Judge, that affirmed an order entered November 27, 1991 in the United States Bankruptcy Court for the Southern District of New York, Cornelius Blackshear, Bankruptcy Judge. The appealed orders approved, as modified, an expense reimbursement and breakup fee arrangement entered into between appellees Bankers Trust New York Corporation ("Bankers Trust") and Integrated Resources, Inc. ("Integrated") in connection with a proposal by Bankers Trust

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to fund Integrated's bankruptcy reorganization.

        Because the order from which the Committee appeals is not "final" within the meaning of 28 U.S.C. Sec. 158(d) (1988), 1 the appeal is dismissed for lack of appellate jurisdiction.

Background

        This appeal arises out of Integrated's ongoing Chapter 11 bankruptcy proceedings. In view of our determination to dismiss, we provide only a brief description of the underlying events.

        On February 13, 1990, Integrated filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code. Integrated thereafter considered the alternatives of an internally funded plan of reorganization and a plan funded by third parties. In an attempt to locate outside funding, Integrated contacted numerous third parties with whom, if substantial interest was expressed, it entered into confidentiality agreements to permit potential sources of funding to conduct due diligence regarding Integrated.

        By the fall of 1991, Integrated considered its negotiations with Bankers Trust to be the most advanced compared to those with other interested parties. After further negotiations and completion of its initial investigation, Bankers Trust submitted a letter of intent dated November 8, 1991 (the "Letter of Intent") that outlined the terms of a proposed funding by Bankers Trust of Integrated's reorganization. Bankers Trust advised Integrated that it would not proceed further with a funding effort unless the Letter of Intent was accepted by Integrated.

        Integrated, together with committees representing senior and bank creditors in the Integrated reorganization proceeding (the "Senior Committees"), acceded to Bankers Trust's request and agreed to the Letter of Intent. The Letter of Intent provided, inter alia, that Bankers Trust would receive reimbursement of up to $1,500,000 for expenses incurred in connection with its business review of Integrated and development of the proposal tendered in the Letter of Intent. The Letter of Intent also required Integrated to pay Bankers Trust a breakup fee ranging from $500,000 to $9,000,000 in the event that a refunding pursuant to the Letter of Intent was not ultimately consummated for any reason other than a material breach or abandonment of the Letter of Intent by Bankers Trust, or its failure to obtain necessary regulatory approvals.

        The amount of the breakup fee would depend upon the events that caused the refunding contemplated by the Letter of Intent not to occur and the future progress of the parties in achieving a definitive agreement. The Letter of Intent required approval of its compensation provisions by the bankruptcy court no later than November 25, 1991, and barred Integrated from entering into an alternative refunding transaction with any third party unless that transaction "shall have a value to the...

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