Sandra Cotton, Inc. v. Bank of New York, CIV-85-1322E.
| Decision Date | 22 June 1988 |
| Docket Number | No. CIV-85-1322E.,CIV-85-1322E. |
| Citation | 87 BR 272 |
| Parties | SANDRA COTTON, INC., Appellant, v. BANK OF NEW YORK, Appellee. |
| Court | U.S. District Court — Western District of New York |
Jack L. Getman, David R. Knoll, Buffalo, N.Y., for appellant.
Marvin R. Baum, Buffalo, N.Y., for appellee.
This is an appeal from an Order of the Bankruptcy Court lifting the automatic bankruptcy stay on certain of the real properties of the debtor Sandra Cotton Inc. The stay was lifted upon a motion by the Bank of New York which held a mortgage on the properties. The Bankruptcy Court found that the debtor had no equity in the collateral. A request for a stay pending the appeal was denied by this Court August 14, 1986, 64 B.R. 262 (1986), and a motion to vacate that Order was denied April 24, 1987. The issues now before this Court, even before the merits of the appeal can be addressed, are (1) whether the appeal has been perfected pursuant to Bankruptcy Rule 8006, 11 U.S.C., (2) whether Jack Liffiton as a shareholder of the debtor corporation can intervene and be heard on this appeal and (3) whether anyone except the Trustee in Bankruptcy of the debtor can represent the interests of the debtor.
Nearly three years have passed since the September 27, 1985 filing of the Notice of Appeal and the Record still lacks a transcript of the Bankruptcy Court proceeding. Bankruptcy Rule 8006 provides in pertinent part that, "if the record designated by any party includes a transcript of any proceeding or a part thereof, he shall immediately after filing the designation deliver to the reporter and file with the clerk of the bankruptcy court a written request for the transcript and make satisfactory arrangements for payment of its cost." Neither Liffiton nor the attorney he recently has retained to try to represent the debtor corporation on this appeal has taken the steps necessary to have the transcript ordered and filed. The Trustee of the debtor's estate has refused to pay for the transcript and this Court is not now going to involve itself in questioning his judgment. Suffice it to say that this appeal does not appear necessary or in the best interests of the debtor. Accordingly, the appeal must be dismissed for the "appellant's" failure to perfect the Record on Appeal.
Liffiton has repeatedly tried to represent the debtor corporation on various matters before this Court but such requests have been repeatedly denied because he is not an attorney. He now claims that, as a shareholder of the corporation, he has a right to intervene on behalf of himself and to be heard on this appeal. See 11 U.S.C. § 1109(b). This section provides that a party in interest, including an equity security holder, has a right to appear and be heard on any issue in a case under Chapter 11 of the Bankruptcy Code. Apart from the fact that this case is now a Chapter 7 case, after its conversion from Chapter 11, Liffiton can not now be allowed to intervene and be heard on this appeal inasmuch as he did not first seek to intervene in the Bankruptcy Court. Without first having sought to intervene in the original proceeding, Liffiton can not now be granted standing to appear on the appeal from an order entered in the original proceeding. Accordingly, Liffiton will not be allowed to intervene and be heard on this appeal.
Lastly is the question whether anyone besides the Trustee in Bankruptcy can proceed on behalf of and represent the debtor corporation. An attorney apparently retained by Liffiton to appear on its behalf argues that he has the right to represent the ongoing "residue" of the corporation which will remain after the bankruptcy has ended. The attorney for the Trustee maintains that only the Trustee and his attorney can represent the debtor and that there is no "residue" to...
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