Case ID: br_570/html/0085-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

IN RE: Sean DUNNE, Debtor. Gayle Killilea Dunne, Appellant, v. Richard M. Coan, Trustee, Appellee, Ulster Bank Ireland Limited, National Asset Loan Management Limited, Creditors.
    No. 16-1778-bk
    United States Court of Appeals, Second Circuit.
    March 28, 2017
    APPEARING FOR APPELLANT: ALEC P. OSTROW, Becker, Glynn, Muffly, Chassin & Hosinski LLP, New York, New York.
    APPEARING FOR APPELLEE: TIMOTHY D. MILTENBERGER, Coan, Lew-endon, Gulliver & Miltenberger, LLC, New Haven, Connecticut.
    PRESENT: REENA RAGGI, DEBRA ANN LIVINGSTON, SUSAN L. CARNEY, Circuit Judges.
   SUMMARY ORDER

Plaintiff Gayle Killilea Dunne (“Killi-lea”), the wife of the Chapter 7 Debtor, Sean Dunne, appeals from the, district court’s affirmance of the bankruptcy court’s grant of the Trustee’s motion for relief from the automatic stay nunc pro tunc with regard to litigation commenced by the equivalent of the trustee in the debtor’s Irish bankruptcy case, the “Official Assignee,” against Killilea (the “OA litigation”). In addition to granting relief from the stay, the bankruptcy court ruled that Killilea lacked standing to challenge the Trustee’s motion. The district, court affirmed the grant of relief from the stay but declined to reach the question of Killi-lea’s standing. Killilea here argues that she has standing to challenge the bankruptcy court’s order and that the order manifests abuse of discretion in several respects.

Because standing is a question of law, our review is de novo, see In re Lehman Bros. Holdings Inc., 761 F.3d 303, 308 (2d Cir. 2014), and because we conclude that Killilea lacks appellate standing, we dismiss her appeal, leaving in place the order of the bankruptcy court lifting the automatic stay. We assume the parties’ familiarity with the facts and procedural history of this case, which we reference only as necessary to explain our decision to dismiss for lack of bankruptcy appellate standing.

As this court has explained, although “[t]he current Bankruptcy Code prescribes no limits on standing beyond those implicit in Article III of the United States Constitution!;,] ... for practical reasons this Court and others have adopted the general rule, loosely modeled on the former Bankruptcy Act, that in order to have standing to appeal from a bankruptcy court ruling, an appellant must be a person aggrieved— a person directly and adversely affected pecuniarily by the challenged order of the bankruptcy court.” In re DBSD N. Am., Inc., 634 F.3d 79, 88-89 (2d Cir. 2011) (citations, footnote, and internal quotation marks omitted). As such, to pursue this appeal, Killilea must establish, in addition to Article III standing, that the bankruptcy court’s order caused her a “direct” and “financial” injury. See id.; Kane v. Johns-Manville Corp., 843 F.2d 636, 642 n.2 (2d Cir. 1988) (stating that this limitation is “more exacting” than Article III standing because constitutional injury in fact need not be financial and need be fairly traceable only to alleged illegal action); see also In re Barnet, 737 F.3d 238, 242 (2d Cir. 2013) (explaining that appellate standing rule is “rooted in a concern that freely granting open-ended appeals to those persons affected by bankruptcy court orders will sound the death knell of the orderly disposition of bankruptcy matters” (internal quotation marks omitted)).

The principal purpose of an automatic stay is to protect the debtor and “to preserve the property of the debtor’s estate for the benefit of all the creditors.” In re AMR Corp., 730 F.3d 88, 112 (2d Cir. 2013) (internal quotation marks omitted). Killilea is neither a creditor nor a co-debtor of the estate at issue. She asserts no direct pecuniary interest in the bankruptcy proceeding. Moreover, the possibility that Killilea could suffer financial injury as a result of a future adverse decision in the no-longer-stayed OA litigation is not directly attributable to the bankruptcy court order, but remote and speculative. See, e.g., In re Barnet, 737 F.3d at 243 (stating that “potential harm” from a bankruptcy court order is inadequate for appellate standing). Indeed, the challenged stay order dictated no relief that directly and adversely affected Killilea’s pecuniary interests. See id. (explaining that pecuniary harm required for bankruptcy appél-late standing must be evident in “relief directed by a Bankruptcy Court”). Thus, the mere fact that the bankruptcy court lifted the automatic' stay despite Killilea’s objection is not enough, by itself, to demonstrate her direct, financial injury. Accordingly, Killilea lacks standing to appeal the bankruptcy court’s order, and we therefore DISMISS her appeal for lack of bankruptcy appellate standing. 
      
      . While in light of our’decision on appellate standing we need not address Killilea’s standing in the bankruptcy court, we note that we have long held that only creditors and the debtor (or, equivalently, the trustee) have party-in-interest standing to request relief from the automatic stay or challenge a bankruptcy settlement. See In re Refco, Inc., 505 F.3d 109, 116-17 (2d Cir. 2007); In re Comcoach Corp., 698 F.2d 571, 573-74 (2d Cir. 1983).