Opinion
Case No. 07-10416 (KJC)
2013-09-30
In re NEW CENTURY TRS HOLDINGS, INC, et al. Debtors
CHAPTER 11
(Jointly Administered)
(Re: D.I. 11160)
MEMORANDUM ORDER DENYING REQUEST BY
ANITA B. CARR FOR ACCOUNTING AND AFFIDAVIT
This Memorandum Order constitutes the findings of fact and conclusions of law required by Fed.R.Bankr.P. 7052. This Court has jurisdiction to decide the motion before it pursuant to 28 U.S.C. § 1334 and §157(a). This is a core proceeding pursuant to 28 U.S.C. §157(b)(1) and (b)(2)(A).
BY: KEVIN J. CAREY, UNITED STATES BANKRUPTCY JUDGE
Currently before the Court is the "Request for Accounting and Affidavit" (D.I. 11160) (the "Request") filed by Anita B. Carr on May 16, 2013. Alan M. Jacobs, in his capacity as Liquidating Trustee of the New Century Liquidating Trust (the "Trustee"), filed an objection to the Request (D.I. 11202).
Background
In October 2009, Ms. Carr filed an adversary complaint alleging a number of claims against the Debtors arising out of a loan transaction between Ms. Carr and Debtor Homel23 Corporation entered into on or about January 25, 2006. On or about October 5, 2010, the Trustee and Ms. Carr entered into a Settlement Agreement, in which the Trustee agreed to pay a settlement sum of $60,000 "in full and final satisfaction of the Causes of Action and any other claim(s) that [Ms. Carr] may have against the Debtors or the Trust." See Carr v. New Century TRS Holdings, Inc. (In re New Century TRS Holdings, Inc.), 2011 WL 1792544, *1 (Bankr. D.Del. May 10, 2011). On November 2, 2010, Ms. Carr filed aNotice of Voluntary Dismissal of the adversary proceeding. (Adv. No. 09-52251, D.I. 52). On November 3, 2010, the Adversary Proceeding was closed.
The Memorandum was amended by Order dated May 19, 2011, which corrected the amount of the settlement payment from $65,000 to $60,000. (Adv.No. 09-52251, D.I. 80).
On December 13, 2010, Ms. Carr filed a request to stay dismissal of the adversary proceeding, arguing that she had obtained new evidence demonstrating that the Trustee made false representations to induce her to enter into the Settlement Agreement. On May 10, 2011, this Court issued a Memorandum and Order (the "May 10, 2011 Decision") denying her request to stay dismissal of the adversary proceeding, deciding that "there is no credible evidence of any misrepresentation by the Trustee in the record" and "[t]he record establishes that any claims regarding the validity of the Assignment were known to - - and asserted by - - [Ms. Carr] prior to the signing of the Settlement Agreement and, therefore, were included in the release." Carr, 2011 WL 1792544 at *4. Ms. Carr filed two motions for reconsideration of the May 10, 2011 Decision, which were denied. Carr v. New Century TRS Holdings, Inc. (In re New Century TRS Holdings, Inc.), 2011 WL 6097910 (Bankr. D.Del. Dec. 7, 2011) (denying first motion for reconsideration), 2012 WL 38974 (Bankr. D.Del. Jan. 9, 2012) (denying second motion for reconsideration). Ms. Carr filed an appeal. The United States District Court for the District of Delaware affirmed the May 10, 2011 Decision. Carr v. Jacobs (In re New Century TRS Holdings, Inc.), 2013 WL 1196605 (D.Del. Mar. 25, 2013) reconsicl denied 2013 WL 1680472 (D.Del. Apr. 17, 2013).
Ms. Carr filed an appeal of the orders of the Delaware District Court which is currently pending before the Third Circuit Court of Appeals.
Discussion
Ms. Carr lacks standing to bring her Request. To appear and be heard in a bankruptcy case, a party must establish standing under either (i) Article III of the United States Constitution (which is required for all litigants in all federal cases), or (ii) Bankruptcy Code §1109. In re Global Indus. Tech., Inc., 645 F.3d 201, 210-11 (3d Cir. 2011). The Third Circuit decided that the boundaries for both Article III standing and standing under the Bankruptcy Code are coextensive. Id. at 211.
Bankruptcy Code §1109(b) provides:
A party in interest, including the debtor, the trustee, a creditors' committee, an equity security holders' committee, a creditor, an equity security holder, or any indenture trustee, may raise and may appear and be heard on any issue in a case under this chapter.11 U.S.C. §1109(b).
"A party seeking constitutional standing must demonstrate an 'injury in fact' that is 'concrete', 'distinct and palpable', and 'actual or imminent.'" Id. at 210 citing Whiimore v. Arkansas, 495 U.S. 149, 155., 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990). The Third Circuit further decided:
The party must establish that the injury fairly can be traced to the challenged action and is likely to be redressed by a favorable decision. We have noted thatId. at 210 (internal quotations and citations omitted). Similarly, Bankruptcy Code §1109 grants standing to a "party in interest", which has been described as "anyone who has a legally protected interest that could be affected by a bankruptcy proceeding." In re James Wilson Associates, 965 F.2d 160, 169 (7th Cir. 1992).
the contours of the injury-in-fact requirement, while not precisely defined, are very generous. The standard is met as long as the party alleges a specific, identifiable trifle of injury or a personal stake in the outcome of the litigation.
In Global Indus., the Third Circuit adopted the Seventh Circuit's "party in interest" test as set forth in James Wilson. Global Indus., 645 F.3d at 210-11.
In her Request, Ms. Carr asks this Court to order the Trustee to provide information related to a "Corporation Assignment Deed of Trust" dated May 22, 2007, which falls after the filing of the Debtors' chapter 11 bankruptcy petitions. This Court has already decided that Ms. Carr's claims regarding the assignment of the deed of trust were released in her settlement with the Trustee. Ms. Carr's claims against the Debtors' estate and the Liquidating Trust were settled and paid. She has no injury that can be addressed in this bankruptcy case. [remainder of page intentionally left blank]
Even if Ms. Carr had standing to assert her Request, it would denied. Her Request is similar to the Request for Accounting and Affidavit filed by Danefoid Wright (D.I. 11156). Mr. Wright's Request for Accounting and Affidavit was denied by this Court for reasons stated on the record at a hearing on September 12, 2013. (See D.I. 11258). Ms, Can's Request would also be denied for the same reasons.
Conclusion
For the reasons set forth above, it is hereby ORDERED that the Ms. Carr's Request for Accounting and Affidavit is DENIED.
BY THE COURT:
____________________
KEVIN J. CAREY
UNITED STATES BANKRUPTCY JUDGE
cc: Alan M. Root, Esquire