* Pursuant to Local Rule 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in Local Rule 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 95-10490

_____________________

In the Matter of: GREAT PLAINS PIPELINE CONSTRUCTION,

INC.,

Debtor

NORTHWEST PIPELINE CORP.,

Appellant,

v.

BILLIE W. SCHELL; DOLLIE SCHELL, Individually and as

Trustee of the Billy and Dollie Schell Children’s

Trust; GREAT PLAINS EQUIPMENT, INC.; FLOYD D. HOLDER,

Chapter 7 Trustee for Great Plains Pipeline

Construction, Inc.; WEST TEXAS PIPELINE CONSTRUCTION,

INC.; CLARK L. BESACK; CHRISTIE L. BESACK, Individually

and as Trustee of the Clark and Christie Besack

Children’s Trust,

Appellees.

_________________________________________________________________

Appeal from the United States District Court

for the Northern District of Texas

(5:95-CV-22-C)

_________________________________________________________________

October 17, 1996

Before KING, DAVIS, and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:*
2

Northwest Pipeline Corporation (“Northwest”) appeals the

district court’s affirmance of an order of the bankruptcy court

which approved a compromise and settlement of three adversary

proceedings brought by the Chapter 7 trustee, Floyd Holder,

against several insider defendants. Northwest contends that the

bankruptcy court erred in its application of the standards for

approval of a compromise and settlement and in its inclusion in

its order of language precluding refiling by any party in

interest of the causes of action brought by the trustee. During

oral argument this court was advised that Northwest had settled

its claims and causes of action against the debtor, Great Plains

Pipeline, Inc. (“Pipeline”), and was no longer a creditor of the

bankruptcy estate. We therefore ordered supplemental briefing on

the issue of Northwest’s standing to bring this appeal. After

consideration of the supplemental briefs, the original briefs,

and the record on appeal, we conclude that Northwest lacks

standing for the following reasons.

Standing to appeal a bankruptcy order is limited to “persons

aggrieved” by the order. Rohm & Hass Texas, Inc. v. Ortiz Bros.

Insulation, Inc., 32 F.3d 205, 210 n.18 (5th Cir. 1994); In re El

San Juan Hotel, 809 F.2d 151, 154 (1st Cir. 1987). To qualify as

a “person aggrieved,” a party must show that it is “‘directly and

adversely affected pecuniarily’” by the order appealed, or that

the order diminishes its property, increases its burdens, or

impairs its rights. Cajun Elec. Power Coop., Inc. v. Central La.
3

Elec. Co, Inc., 69 F.3d 746, 749 (5th Cir.)(quoting In re El San

Juan Hotel, 809 F.2d at 154), withdrawn in part, 74 F.3d 599 (5th

Cir. 1995), cert. denied, 64 U.S.L.W. 3741 (U.S. Oct. 7, 1996)

(No. 95-1727). Appellate standing in the bankruptcy context is

limited to persons whose interests are directly affected in order

to prevent bankruptcy proceedings from becoming mired in

protracted litigation on behalf of any number of parties who may

be indirectly involved or affected by each decision of the

bankruptcy court. In re El San Juan Hotel, 809 F.2d at 154; Kane

v. Johns-Manville Corp., 843 F.2d 636, 642 (2d Cir. 1988); In re

Fondiller, 707 F.2d 441, 443 (9th Cir. 1983).

Northwest asserts three bases for its standing as a “person

aggrieved.” First, Northwest argues that it has an interest in

the assets of the bankruptcy estate because it is a codebtor with

Pipeline as to the claims of several subcontractors and suppliers

who have filed mechanic’s and materialmen’s liens on the pipeline

owned by Northwest. Northwest states that in order to remove the

liens, it will have to pay whatever debts are not satisfied by

Pipeline. Therefore, Northwest argues, its property is

diminished by the trustee’s failure to reach an appropriate

compromise because every dollar that the bankruptcy estate is not

able to pay the subcontractors and suppliers is another dollar

that Northwest must pay.

Northwest’s argument does establish a theoretical link

between its pecuniary interest and the assets of the bankruptcy
 

1 It is clear that these creditors have filed lawsuits

against Northwest for the claims in question. Northwest does not

argue here that any recovery by a subcontractor or supplier would

entitle Northwest to be subrogated to the rights of the

subcontractor or supplier against the debtor.

4

estate. However, it is not clear from the record that the

subcontractors and suppliers do not have a direct right of action

against Northwest,1 in which case the ability of the estate to

satisfy these debts will in all likelihood have no bearing on the

amount paid by Northwest. Even assuming that Northwest had

established that the settlement approved by the bankruptcy court

adversely affected its economic interests, we still must

determine whether Northwest is the proper proponent of the rights

it seeks to assert. See Kane, 843 F.2d at 642. Northwest’s

claim is that the settlement generated insufficient funds to

satisfy creditors; since Northwest is no longer a creditor, this

claim effectively asserts the rights of those subcontractors and

suppliers who do maintain valid claims against the estate. It

would be inappropriate to permit Northwest, a third party, to

disturb a settlement based on the rights of creditors who

themselves are capable of asserting these rights, simply because

Northwest faces the prospect of potential collateral injury. See

id. at 643-44.

Second, Northwest claims that it is a “person aggrieved”

because it retains a right of subrogation against the estate for

debts owed to Hartford, which provided workers’ compensation
5

insurance to Pipeline during construction of the pipeline for

Northwest. Northwest contends that when it settled its claims

with the estate, it waived its share of any distribution from the

estate on any claims acquired through subrogation except for the

claims of Hartford. Because Northwest has been adjudged liable

to Hartford for over $300,000 in unjust enrichment, Northwest

contends that it continues to have an interest in the ability of

the estate to pay the outstanding premium owed to Hartford.

The trustee argues that Northwest is not entitled to

subrogation for the Hartford claim because Northwest absolutely

and unconditionally waived all claims against the debtor’s

estate. The trustee further argues that even if the settlement

between Northwest and the estate left a loophole for the Hartford

claim, and even if Northwest should eventually pay Hartford,

several provisions of the Bankruptcy Code nevertheless undermine

Northwest’s subrogation claim. Specifically, the trustee

contends that under 11 U.S.C. § 509(c), Northwest cannot recover

from the estate until the claims of Hartford are paid in full,

which is entirely unlikely; that Northwest should not be paid

until all the subcontractor and supplier claims are paid in full;

and that 11 U.S.C. § 509(b)(2) precludes Northwest’s subrogation

claim because Northwest received the consideration for the claim

held by Hartford.

This court cannot determine based on the present record

whether the settlement agreement between Northwest and the estate
6

preserved Northwest’s right of subrogation with respect to the

Hartford claim. Nor is it apparent at this juncture whether

Northwest, which is appealing the state court judgment in favor

of Hartford, will ultimately be held to pay such claim. Even if

Northwest did eventually pay Hartford, it is not clear whether

under the Bankruptcy Code Northwest would be entitled to

subrogation. Northwest’s standing argument is essentially that

its property will be diminished by the bankruptcy order in

question if Northwest is unsuccessful in its Hartford appeal, if

its settlement with the estate in fact carved out a right of

subrogation with respect to the Hartford claim, if the Bankruptcy

Code permits subrogation under the facts of this case, and if

Hartford is ever paid in full. In short, the sole certainty with

respect to this argument is that any claim that Northwest may

have as a subrogee is too remote and speculative to serve as the

basis for standing to appeal a settlement between the trustee and

various insiders.

Third, Northwest argues that it is a “person aggrieved”

because over broad language in the bankruptcy court’s order

prohibits Northwest from filing claims outside of bankruptcy

against the insiders. The relevant language in the order

provides, “It is further ordered that the above styled-adversary

proceedings are hereby dismissed, with prejudice, to refiling by

the Trustee and any other party in interest as to the causes of

action alleged in the Trustee’s Complaint.” Northwest contends
7

that by precluding any causes of action Northwest may have

against any of the insiders outside of bankruptcy, this order

impairs its rights.

This argument also represents one of Northwest’s two issues

on appeal. In its original brief, Northwest requested that this

court “make it clear that as the Bankruptcy Court pointed out . .

. , it ‘does not . . . [have] the authority to prohibit

creditors and parties in interest from asserting causes of action

other than causes of action asserted by the Trustee in the

adversary proceedings.’ . . . Furthermore, this Court should

make it clear that Northwest and other creditors have a right to

assert those causes of action which belong to the creditors and

not to the bankruptcy estate regardless of whether the Trustee

attempted to bring those actions before the Bankruptcy Court in

the adversary complaints.”

Northwest has not, however, provided this court with any

specifics as to any claims that it may hereafter bring against

the insiders, other than to say that such claims are related to

the transactions sued upon by the trustee. In essence, Northwest

asks this court to render an advisory opinion as to how the

language of the bankruptcy court’s order may be construed in the

face of a specific claim. We decline to do so.

For the foregoing reasons, we determine that Northwest is

without standing to bring this appeal, and the appeal is hereby

DISMISSED.