16-12 33

In Re : 11 East 36th, LLC



### U N I T E D S TAT E S C O URT O F A P P EA L S F O R T H E S E C O

ND C I R C U I T 

## S UM M ARY O RD E R

R UL I N G S B Y S U

M M A R Y OR D E R D O NO T H

A V E PR E C E D E N T I A

L E F FE C T . C I T

A T I O N T O A S U

M M A R Y OR D E R F I L E D ON OR AF T E R J

A N U A R Y 1, 2007, I S PE R M I T T E D A

N D I S GO

V E R NE D B Y F E D E R

A L R U L E O F A P PE L L

A T E P R O C E D UR E 32. 1 AND TH IS CO UR T ’ S L O C

A L R U L E 32.1.1. WHE N C I T I NG A S U M M A R Y OR D E R I N A D O C U M E N T F I L E D W I T H T H I S C OUR T , A P

A R T Y M U S T C I T E E I T HE R T HE F E D E R A L A P P E N

D I X OR A

N E L E C T R O N I C DA T A B A S E ( W I T H T HE NO T

A T I O N “ S U M M A R Y OR D E R ”). A P

A R T Y C I T I N G A S U

M M A R Y OR D E R M U S T S E R V E A C O P Y O F I T O

N A NY P A R T Y NO T R

E PR E S E N T E D B Y C OU

N S E L . 1 At a state d ter m of the U nited Stat es Co urt o f App eals 2 for t he Se cond Circu it, h eld a t the Thur good Marsh all U nited 3 State s Cou rthou se, 4 0 Fol ey Square, in t he Ci ty of New York, 4 on th e 16 day of De cembe r, tw o tho usand sixt een. th 5 6 PRESE NT: DENNI S JAC OBS, 7 JOSÉ A. CA BRANE S, 8 BARRI NGTOND. PARKER , 9 Circu it Ju dges, 10 11 - - - - - - - - - - - - - - - - - - - -X IN RE : 11 EAST 36TH, LLC, 12 13 Debto r, 14 VICTO RIA G UTHRI E, 15 Claim ant-A ppell ant, 16 17 18 -v.- 16-12 33 19 20 11 EA ST 36 TH, L LC, MORGANLOFT S, LL C, 21 Debto rs-Ap pelle es, 22 23 - - - - - - - - - - - - - - - - - - - -X 24 25 FOR A PPELLANT: ANTHO NY F. GIUL IANO, Pryo r & 26 Mande lup, L.L.P ., We stbur y, Ne w 27 York. 28

11 FOR A PPELL EES: JONAT HAN S . PAS TERNA K, De lBell o 2 Donne llan Weing arten Wise & 3 Wiede rkehr , LLP , Whi te Pl ains, 4 New Y ork. 5 6 Appea l fro m jud gment of t he Un ited State s Dis trict 7 Court for the S outhe rn Di stric t of New Y ork ( Torre s, J. , 8 Gross man, B.J.) . 9 UPON DUE C ONSID ERATI ON, I T IS HEREB Y ORD ERED, ADJU DGED 10 AND D ECREE D that the judgm ent o f the dist rict court be 11 AFFIR

MED . 12 Victo ria G uthri e app eals from the j udgme nt of the 13 Unite d Sta tes D istri ct Co urt f or th e Sou thern Dist rict of 14 New Y ork ( Torre s, J. , Gro ssman , B.J .) ex pungi ng he r cla im 15 and d eclin ing t o con sider her const ructi ve tr ust a rgume nt. 16 We as sume the p artie s’ fa milia rity with the u nderl ying 17 facts , the proc edura l his tory, and the i ssues pres ented for 18 revie w. W e aff irm t he di stric t cou rt’s judgm ent b ecaus e 19 Guthr ie ca n no longe r sue eith er in re m or in pe rsona m , and 20 becau se sh e has waiv ed he r con struc tive trust clai m. 21 In 20 07, G uthri e mor tgage d a c ondom iniumand loane d the 22 proce eds t o the Morg an In vestm ent F und, LLC ( the “ Morga n 23 Fund” ). W hen t he lo an wa s abo ut to matu re, G uthri e agr eed 24 to ex tend it if she recei ved a dditi onal secur ity. Avi 25 Bobke r, wh o man aged the M organ Fund , arr anged for sever al 26 other enti ties contr olled by h is fa mily to si gn pl edge

21 agree ments putt ing u p col later al in exch ange for t he lo an 2 exten sion. One enti ty th at si gned a ple dge a greem ent w as 11 3 East 36th, LLC (“11 East” ). 1 1 Eas t had a 10 0% in teres t in 4 an en tity calle d Mor gan L ofts, LLC (“Mor gan L ofts” ), an d 5 Morga n Lof ts in turn owne d sev eral condo miniu m uni ts. 11 6 East pledg ed it s own ershi p int erest in M organ Loft s as 7 secur ity f or th e Mor gan F und’s debt to G uthri e, an d Avi 8 Bobke r fil ed a UCC f inanc ing s tatem ent f or th e ple dge o n 9 Guthr ie’s behal f. 1 1 Eas t rec eived no b enefi t fro m the 10 trans actio n. 11 A few year s lat er, 1 1 Eas t and Morg an Lo fts h ave b oth 12 enter ed ba nkrup tcy, and G uthri e has file d a P roof of Cl aim. 13 Howev er, t he ba nkrup tcy c ourt disco vered that the finan cing 14 state ment was i ncons isten t wit h the pled ge: t he fi nanci ng 15 state ment descr ibed the c ollat eral as th e apa rtmen ts Mo rgan 16 Lofts owne d, bu t the coll atera l ple dged was a ctual ly 11 17 East’ s own ershi p int erest in t he Mo rgan Lofts enti ty it self. 18 The b ankru ptcy court foun d tha t the fina ncing stat ement was 19 "seri ously misl eadin g," t hat i t was ther efore inef fecti ve to 20 perfe ct Gu thrie 's se curit y int erest , and that Guth rie’s 21 resul ting unper fecte d cla im wa s avo ided under 11 U .S.C. § 22 544(a ). S he wa s lef t wit h no claimwhat soeve r, an d the 23 distr ict c ourt affir med.

31 Guthr ie do es no t app eal t he ho lding s tha t the UCC 2 state ment was m ateri ally misle ading , tha t her clai m was 3 there fore unper fecte d, or that it w as pr operl y avo ided under 4 the B ankru ptcy Code. Her argu ment on ap peal is th at he r 5 claimshou ld ha ve be en al lowed to p ersis t as an un secur ed 6 claim , rat her t han b eing expun ged. 7 As Gu thrie conc edes, she never had a rig ht to sue 11 8 East in pe rsona m for the d ebt o wed t o her by t he Mo rgan 9 Fund; and the b ankru ptcy court avoi ded h er ri ght t o pro ceed 10 in re m again st th e col later al (1 1 Eas t’s i ntere st in Morg an 11 Lofts ). G uthri e has fail ed to pers uade us th at an y oth er 12 claimagai nst t he ba nkrup tcy e state rema ins, and w e dec line 13 to lo ok fo r one . Si nce 1 1 Eas t rec eived no b enefi t fro m its 14 pledg e to Guthr ie, a nd in the absen ce of a cl ear r ight to a 15 claim , she has faile d to show why s he sh ould share , pari 16 passu , wit h the othe r uns ecure d cre ditor s of 11 Ea st. Even 17 if we coul d pos it so me so rt of non- in re m , non - in perso nam 18 claim , it is di fficu lt to see how t he ba nkrup tcy c ourt could 19 (othe r tha n by specu latio n) de termi ne th e dol lar v alue of 20 Guthr ie’s claim , giv en un certa inty as to whet her t he Mo rgan 21 Fund will defau lt, w hethe r the othe r ple dging enti ties can 22 pay, and w hethe r the star ting point for the v alue of a claim 23 shoul d be the v alue of th e Mor gan F und’s debt or t he va lue 24 of 11 East ’s in teres t in Morga n Lof ts, w hatev er th at ma y be. 41 The d istri ct co urt h ad di scret ion t o add ress Guthr ie’s 2 const ructi ve tr ust c laim despi te he r fai lure to ra ise i t 3 befor e the bank ruptc y cou rt. Davis v. S hah, 821 F .3d 2 31, 4 246 ( 2d Ci r. 20 16). It d id no t abu se it s dis creti on by 5 decli ning to do so: the f actua l pre dicat es fo r a 6 const ructi ve tr ust c laim are d isput ed, a nd th ere i s no 7 manif est i njust ice i n hol ding that she h as wa ived her c laim. 8 Id. 9 For t he fo regoi ng re asons , and find ing n o mer it in the 10 parti es’ o ther argum ents, we h ereby AFFIR M the j udgme nt of 11 the d istri ct co urt. 12 13 14 FOR T HE CO URT: 15 CATHE RINE O’HAG AN WO LFE, CLERK 16

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