13‐2023

Papas v. Residential Capital LLC

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.  CITATION TO A SUMMARY ORDER

FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE

PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.  WHEN CITING A SUMMARY ORDER IN A DOCUMENT

FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC

DATABASE (WITH THE NOTATION “SUMMARY ORDER”).   A PARTY CITING A SUMMARY ORDER MUST SERVE

A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley

Square, in the City of New York, on the 27th day of March, two thousand

fourteen.

PRESENT:

RALPH K. WINTER,

RICHARD C. WESLEY,

SUSAN L. CARNEY,

Circuit Judges.

_________________________________________

In Re:  Residential Capital, LLC.

_________________________________________

Paul N. Papas,

                     Claimant‐Appellant,

v. 13‐2023

Residential Capital, LLC,

                     Debtor‐Appellee.

_________________________________________

FOR APPELLANT: Paul N. Papas, pro se, Phoenix, AZ
FOR APPELLEE: Stefan W. Engelhardt, Morrison & Foerster LLP, New

York, NY, Mark A. Hearron, Morrison & Foerster,

Washington, D.C.

Appeal from a judgment of the United States District Court for the Southern

District of New York (Buchwald, J.).

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the appeal is DISMISSED as moot.

Appellant Paul Papas, proceeding pro se, appeals from the judgment of the

district court affirming a bankruptcy court order, which denied Appellant’s

motion to convert the Chapter 11 reorganization proceedings of Appellee

Residential Capital, LLC, to a Chapter 7 liquidation, pursuant to 11 U.S.C. §

1112(b).  We assume the parties’ familiarity with the case.

In the bankruptcy context, a case may be equitably moot when, “even

though effective relief could conceivably be fashioned, implementation of that

relief would be inequitable.” In re Chateaugay Corp., 988 F.2d 322, 325 (2d Cir. 1993)

(“Chateaugay I”).  Generally,  an appeal is equitably moot once the debtor’s plan of

reorganization has been “substantially consummated.”  See Frito–Lay, Inc. v. LTV

Steel Co. (In re Chateaugay Corp.), 10 F.3d 944, 952–53 (2d Cir. 1993) (“Chateaugay

II”).  A plan is substantially consummated when all or substantially all of the

proposed transfers in a plan are completed, the successor company has assumed

the business or property dealt with in the plan, and the distributions contemplated

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by the plan have begun.  See 11 U.S.C. § 1101(2).  Here, Appellee auctioned off

substantially all of its assets in October 2012; it made most of the transfers

contemplated in its confirmed reorganization plan, transferred control of its

business and property to the Liquidating Trust, and began distributions in

December 2013.  Accordingly, its reorganization plan is substantially

consummated.

Relief from a consummated plan is inequitable if it would “unravel intricate

transactions” or if the party seeking to undo the plan did not seek a stay below.

Chateaugay II, 10 F.3d at 952‐53.  Here, Appellant asks us to unwind all of the

transactions that have already occurred.  Moreover, although Appellant asked the

district court to stay the bankruptcy proceedings, he did not make his request in

accordance with local court rules or first seek a stay in the bankruptcy court as

required by Federal Rule of Bankruptcy Procedure 8005.

For the foregoing reasons, the appeal is DISMISSED as moot with

prejudice.

FOR THE COURT:

Catherine O’Hagan Wolfe, Clerk

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