In re City of Sioux City Iowa v Midland Marina Inc., 032601 FED8, 00-6031

Docket Nº:00-6031
Party Name:In re City of Sioux City Iowa v Midland Marina Inc.
Case Date:February 21, 2001
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

In re: Midland Marina, Inc., Debtor.

City of Sioux City, Iowa, Respondent-Appellant,

v.

Midland Marina, Inc., Movant-Appellee.

No. 00-6031 NI

No. 00-6034 NI

No. 00-6080 NI

United States Bankruptcy Appellate Panel FOR THE EIGHTH CIRCUIT

Submitted: February 21, 2001

Filed: March 26, 2001

Appeals from the United States Bankruptcy Court for the Northern District of Iowa

Before KOGER, Chief Judge, WILLIAM A. HILL, and DREHER, Bankruptcy Judges.

WILLIAM A. HILL, Bankruptcy Judge.

The City of Sioux City ("City") previously obtained relief from the automatic stay in the debtor's chapter 11 bankruptcy case, and the order granting that relief was the subject of the parties' prior appeal and cross-appeal. While those appeals were pending before this Court, the bankruptcy court(FN1) dismissed the debtor's chapter 11 case. As a result, this Court dismissed the pending appeals as moot on July 24, 2000. However, those appeals have been reinstated and consolidated with the City's present appeal of the bankruptcy court's decision to dismiss the case. For the reasons set forth below, we affirm the bankruptcy court's dismissal of the debtor's case, thus rendering moot the appeals concerning relief from the automatic stay.

BACKGROUND

In late 1991, debtor Midland Marina, Inc. entered a lease with the City for the right to possess specified waterfront land for the purpose of operating a marina. Subsequently, the debtor and the City became embroiled in a dispute as to their respective rights and obligations under the lease. The debtor eventually filed a chapter 11 bankruptcy petition on December 8, 1999.

After sixty days had passed postpetition without assumption or rejection of the marina lease by the debtor, the City filed a motion for relief from the automatic stay, asserting that it was entitled to possession of the leased property by operation of 11 U.S.C. § 365(d)(4). By order dated March 31, 2000, the bankruptcy court granted the City's motion for relief from stay. The debtor appealed the relief from stay order to this Court, asserting that 11 U.S.C. § 365(d)(2) governed the time for assumption or rejection of the marina lease because various items of personal property were included in the lease. The City cross-appealed, seeking an order directing the debtor to immediately surrender the leased premises.

Prior to oral argument of the foregoing appeals regarding relief from stay, the debtor moved the bankruptcy court to dismiss its chapter 11 case pursuant to 11 U.S.C. § 1112(b). On June 7, 2000, the bankruptcy court conducted a hearing concerning the debtor's motion to dismiss. At that hearing, the City conceded that sufficient cause existed to dismiss or convert the case, and the debtor's counsel filed several pleadings which purported to be consents to dismissal on behalf of several creditors. Furthermore, the bankruptcy court admitted these consents to dismissal into evidence over the City's hearsay objection.

On July 6, 2000, the bankruptcy court entered an order dismissing the case. As a result, we subsequently dismissed the appeals that were pending at that time as moot by order dated July 24, 2000, specifying that those appeals could be reinstated if the City appealed the bankruptcy court's order of dismissal and obtained a stay pending appeal. The City subsequently satisfied those conditions for reinstatement. As a result, we vacated our order of July 24, 2000, and reinstated the prior appeals concerning relief from the automatic stay, consolidating them with the City's present appeal from the bankruptcy court's order of dismissal.

The City argues that the bankruptcy court erred in failing to convert the case to chapter 7, that the bankruptcy court erred in admitting the consents to dismissal into evidence, and that dismissal of the bankruptcy case does not render moot the appeals regarding relief from the automatic stay. The debtor asserts that the bankruptcy court's dismissal should be affirmed and that the appeals concerning relief from stay are, therefore, moot.

STANDARD OF REVIEW

On appeal, we review the bankruptcy court's findings of fact for clear error and its conclusions of law de novo. Fed. R. Bankr. P. 8013; Hatcher v. U. S. Trustee (In re Hatcher), 218 B.R. 441, 445 (B.A.P. 8th Cir. 1998) (citations omitted); Gourley v. Usery (In re Usery), 123 F.3d 1089, 1093 (8th Cir....

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