Dutch Inn of Orlando, Ltd., In re

• Decision Date: 27 March 1980
• Docket Number: No. 78-3827,78-3827
• Citation: 614 F.2d 504
• Parties: In re DUTCH INN OF ORLANDO, LTD., Debtor. Donald SCHUPAK et al., Plaintiffs-Appellants, v. DUTCH INN OF ORLANDO, LTD., et al., Defendants-Appellees. Summary Calendar. *
• Court: U.S. Court of Appeals — Fifth Circuit

Page 504

614 F.2d 504

6 Bankr.Ct.Dec. 186

In re DUTCH INN OF ORLANDO, LTD., Debtor Donald SCHUPAK et al., Plaintiffs-Appellants, v. DUTCH INN OF ORLANDO, LTD., et al., Defendants-Appellees.

No. 78-3827

Summary Calendar. ^*

United States Court of Appeals Fifth Circuit.

March 27, 1980.

Gary L. Blum, New York City, Mitchell W. Herzog, New Orleans, La., for plaintiffs-appellants.

Sibley, Giblin, Levenson & Glaser, Irving M. Wolff, Miami, Fla., Whitaker & Koepke, Orlando, Fla., for defendants-appellees.

Appeal from the United States District Court for the Middle District of Florida.

Before CHARLES CLARK, VANCE and SAM D. JOHNSON, Circuit Judges.

PER CURIAM:

This appeal arises out of the unsuccessful attempt of a group of individual investors, collectively known as the "Schupak group" (Schupak), to purchase the assets of Dutch Inn of Orlando, Ltd. (Dutch Inn), a limited partnership that owned a leasehold interest in real property adjacent to Disney World in Orange County, Florida, on which it operated a six-hundred room motel. Specifically, Schupak seeks the reversal of the Bankruptcy Judge's orders (1) dismissing an adversary proceeding it instituted seeking specific performance and (2) enjoining the continued prosecution of a New York state court action in which it sought to prevent a third party from purchasing the debtor's assets. We affirm.

The Dutch Inn filed a petition in bankruptcy seeking an arrangement under Chapter XII of the Bankruptcy Act, 11 U.S.C. §§ 801-926 (repealed 1979), on July 2, 1976. At that time it had defaulted on the first and second mortgages on the hotel property and was in arrears on the rent it owed to the owner of the property subject to its leasehold. The bankruptcy court adjudicated Dutch Inn to be a bankrupt on February 2, 1978, but stayed the administration of the bankruptcy proceedings pending appeal, conditioned on the posting of a cash supersedeas bond. During this time period, Dutch Inn began negotiating with Schupak for the sale of its assets. These negotiations resulted in a "letter of intent" signed by the parties evidencing their desire to consummate a sale of the assets. The bankruptcy judge permitted Dutch Inn to file a third amended plan of arrangement, which the sale of its assets to Schupak would fund, and scheduled a confirmation hearing.

Although Schupak deposited the funds necessary to carry out the sale with the court, no finalized agreement between Dutch Inn and Schupak was ever submitted for court approval. Instead Dutch Inn executed an agreement to sell its assets to a group of investors known as the "Schottenstein group" (Schottenstein), filed a fourth amended plan of arrangement, and sought the bankruptcy court's approval of the sale. Following attempts by Schupak to prevent the consummation of a sale of the debtor's assets to any purchaser other than itself, the bankruptcy court granted Dutch Inn's application for a temporary restraining order prohibiting Schupak from contacting Schottenstein or interfering with Dutch Inn's negotiations with Schottenstein. Schupak then initiated an adversary proceeding seeking specific performance by Dutch Inn of its alleged agreement to sell all its assets to Schupak an injunction against the sale of the assets to Schottenstein, money damages for breach of contract, and rejection of Dutch Inn's proposed plan of arrangement.

On July 7, 1978, the bankruptcy court dismissed Schupak's claim for specific performance for failure to state a claim for which...