NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 14-3923

_____________

IN RE: NEW CENTURY TRS HOLDING, INC., et al.,

Debtors

ALAN M. JACOBS, IN HIS CAPACITY AS LIQUIDATING TRUSTEE 

TO NEW CENTURY LIQUIDATION TRUST,

Appellant

On Appeal from the United States District Court

for the District of Delaware

(District Court No.: 1-13-cv-01719)

District Judge: Honorable Sue L. Robinson

Argued on July 16, 2015

(Filed: August 10, 2015)

Before: HARDIMAN, VANASKIE, and RENDELL, Circuit Judges

Ralph N. White (ARGUED)

Molly S. White

5948 Doraville Drive

Port Orange, FL 32127

Pro Se Appellees
2

Michael D. DeBaecke, Esq.

Bonnie G. Fatell, Esq.

Alan M. Root, Esq.

Blank Rome

1201 Market Street

Suite 800

Wilmington, DE 19801

Mark S. Indelicato, Esq. (ARGUED)

Hahn & Hessen

488 Madison Avenue

New York, NY 10022

Counsel for Appellant

Irv Ackelsberg, Esq. (ARGUED) 

Langer, Grogan & Diver

1717 Arch Street

Suite 4130, The Bell Atlantic Tower

Philadelphia, PA 19103

Counsel for Amicus

O P I N I O N*

RENDELL, Circuit Judge:

The parties to this appeal seek a ruling as to whether the District Court properly 

concluded that the Bankruptcy Court erred in determining that the notice of the bar date 

by publication given to unknown creditors of the Debtors comported with due process. 

Appellees, Molly S. White and Ralph N. White (the “Whites” or “Appellees”), and 

amicus urge that we should uphold the District Court. At the same time, they argue that 

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not 

constitute binding precedent.
3

the notice to Appellees was unconstitutional because one of the Debtors and Appellees 

were parties to a mortgage loan that Appellees contend was fraudulent and Appellees 

were clearly known to the Debtors and thus entitled to actual notice. Appellees’ claims 

against the Debtors were set forth in a late-filed proof of claim. Appellees contest the 

notification aspect of the claim process and have also filed an adversary proceeding in the 

Bankruptcy Court (the “Adversary Proceeding”), which is currently pending.1 

In connection with a motion to dismiss in the Adversary Proceeding, the 

Bankruptcy Court issued an opinion that did not dismiss the case entirely, in which the 

Bankruptcy Judge ruled that Appellees were unknown creditors.2 Appellees and amicus 

 

1 The Adversary Proceeding, White v. New Century TRS Holdings, Inc., No. 10-55357 

(Bankr. D. Del. filed Nov. 15, 2010), was brought by the Whites against the Debtors and 

included claims for monetary damages and for rescission and declaratory relief regarding 

the Whites’ ongoing mortgage obligation based on fraud and deceptive practices. The 

Bankruptcy Court granted in part and denied in part the Trustee’s motion to dismiss the 

Whites’ adversary action. The Bankruptcy Court granted the dismissal of the Whites’ 

nonmonetary claims for rescission and declaratory relief for lack of subject matter 

jurisdiction. The Trustee also argued that the Bar Date Order barred the Whites’ 

monetary claims. The Bankruptcy Court denied this portion of the motion in a two-part 

ruling: First, the Bankruptcy Court ruled that the Whites were properly classified as 

“unknown creditors.” Second, the Bankruptcy Court declined to dismiss the monetary 

claims on the ground that there was insufficient information to determine whether the 

publication satisfied due process. The Whites have filed two timely motions for 

reconsideration of the dismissal decision, addressed to issues other than the “unknown” 

creditor ruling. The second such motion remains pending.

2 The Bankruptcy Judge was presented with the Whites’ argument that they were known 

creditors because their identity was ascertainable from the Debtors’ books and records. 

The Bankruptcy Judge disagreed with that argument because the Whites’ names and 

address in the Debtors’ loan files only suggested that they were known customers, not 

known creditors. Because the Whites did not allege that, at the time of the Bar Date 

Notice, a review of the Debtors’ records would have revealed any potential claims held 

by the Whites, the Bankruptcy Court concluded that the Whites were unknown creditors 

at the time the Bar Date Notice was served. (App. 132-33.)
4

challenge that ruling, urging that the Debtors knew that the borrowers were potential 

claimants in light of the subprime nature of the loans and the fact that at least one class 

action was filed alleging bait-and-switch tactics vis-à-vis interest rates. See Grimes v. 

New Century Mortg. Corp., 340 F.3d 1007 (9th Cir. 2003).3 Appellees have made known 

their intention to appeal the ruling that they were unknown creditors once the Adversary 

Proceeding is finally adjudicated.4 That may not happen, however, until we rule as to the 

propriety of notice by publication, because the Bankruptcy Judge indicated in his opinion 

that he will defer decision as to the dismissal of the Adversary Proceeding until the notice 

issue is resolved.5 

 

3 The Bankruptcy Court appointed an Examiner to investigate matters related to New 

Century. The Examiner’s report refers explicitly to these tactics: “A senior New Century 

officer noted in 2004 that borrowers would experience ‘sticker shock’ after the teaser 

rates expired.” Final Report of Michael J. Missal, Bankruptcy Court Examiner, at 3, In 

re: New Century TRS Holdings, Inc., No. 07-10416 (Bankr. D. Del. Mar. 26, 2008), ECF 

No. 5518.

4

In addition, at oral argument, the Whites pointed to the Debtors’ motion requesting the 

establishment of the Bar Date as only requesting publication notice “to provide notice of 

the Bar Dates to entities whose names and addresses are unknown to the Debtors.” (App. 

52 ¶ 19 (emphasis added).) The Whites construe this request as the Debtors conceding 

that actual notice was required to entities whose names and addresses were known to the 

Debtors. The Whites urge that their mortgage contracts provided the Debtors with this 

information, and therefore actual notice was required.

5 The Bankruptcy Judge’s opinion stated, in relevant part:

Although the Debtors arguably complied with the stated minimum 

requirements of the Bar Date Order, without a more fully developed factual 

record, I am unable to determine whether the publication notice was 

reasonably calculated to provide notice to consumer mortgagors like the 

Whites. At this stage in the proceeding, the Trustee has not met his burden 

of proving that publication in one national edition newspaper and one local 
5

Clearly, if the Whites were unknown creditors and the notice was sufficient to 

meet due process, the Whites will be barred from pursuing their claim and the Adversary 

Proceeding will be dismissed by the Bankruptcy Judge; if insufficient, the Adversary 

Proceeding, based on fraud, will proceed. In light of the vocal arguments of the Whites 

urging that they were known creditors entitled to actual notice, their standing to appeal to 

the District Court to challenge the notice to unknown creditors—and, as luck would have 

it, they were the only parties to appeal—is subject to question. And if they were known 

creditors, and we issued an opinion regarding the notice, it would be advisory. Review of 

the Bankruptcy Court’s ruling regarding the Whites’ status is stymied because the 

Bankruptcy Judge is awaiting the very ruling we question whether we can make based on 

the standing issue. Thus, this appeal presents unique practical, procedural, as well as 

legal issues.

A court has the duty to determine the standing of the parties before it. “[F]ederal 

appellate courts have a bedrock obligation to examine both their own subject matter 

jurisdiction and that of the district courts[, and] . . . standing is ‘perhaps the most 

important’ of jurisdictional doctrines.” Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 

280 (3d Cir. 2014) (quoting Pub. Interest Research Grp. of N.J., Inc. v. Magnesium 

Elektron, Inc., 123 F.3d 111, 117 (3d Cir. 1997)). We believe that the District Court here 

 

newspaper is sufficient to meet due process requirements as applied to the 

Whites as unknown creditors.

(App. 135 (footnote omitted).) The Bankruptcy Judge thereafter approved the 

publication notice pursuant to the Trustee’s motion, but that ruling is still not final, as it is 

the ruling presented on appeal to us.
6

should have addressed the issue of the Whites’ standing to appeal the Bankruptcy Court’s 

ruling on the notice to unknown creditors, i.e., decided whether the Whites were known 

or unknown, because only by doing so can it determine whether the Whites were parties 

aggrieved by the publication notice.6 If the District Court determines that the Whites 

were indeed unknown creditors, it can reenter its merits ruling. If it determines that they 

were known creditors, it should dismiss the appeal. Thus, we will vacate the District 

Court’s ruling on the merits and remand this matter to the District Court for further 

proceedings consistent with this opinion. 

 

6 The Third Circuit has held that only a “person aggrieved” by an order of the Bankruptcy 

Court has standing to appeal that order. See Gen. Motors Acceptance Corp. v. Dykes, 10 

F.3d 184, 188 (3d Cir. 1993). The “person aggrieved” rule states that only those whose 

pecuniary interests are directly and adversely affected by a Bankruptcy Court order that 

“diminishes their property, increases their burdens, or impairs their rights” may appeal. 

Travelers Ins. Co. v. H.K. Porter Co., 45 F.3d 737, 741-42 (3d Cir. 1995) (quoting Dykes, 

10 F.3d at 187). “[W]hether someone is a ‘person aggrieved’ is normally a question of 

fact to be determined by the district court.” Id. at 742 (citing Dykes, 10 F.3d at 188).