Court Opinion

ID: 49265
Source: CourtListenerOpinion
Date Created: 2010-04-26 00:18:11+00
Date Added: 2024-06-11T09:26:52.164952
License: Public Domain

[DO NOT PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT                        FILED
                                                                  U.S. COURT OF APPEALS
                                                                    ELEVENTH CIRCUIT
                                                                         APR 7, 2006
                                      No. 05-11830
                                                                     THOMAS K. KAHN
                                                                          CLERK
                        D. C. Docket No. 04-80680 CV-WPD
                           BKCY No. 00-35179-BKC-PGH

In Re: EMPIRE OF CAROLINA, INC.,
       EMPIRE INDUSTRIES, INC.

                    Debtors.
__________________________________________________________________

ALPHA INTERNATIONAL,
                                                                Plaintiff-Appellant,

                                          versus

GENERAL FOAM PLASTICS,
                                                                Defendant-Appellee.

                     Appeal from the United States District Court
                         for the Southern District of Florida

                                     (April 7, 2006)

Before ANDERSON and DUBINA, Circuit Judges, and ALBRITTON*, District
Judge.
__________________
*Honorable William H. Albritton, III, United States District Judge for the Middle District of
Alabama sitting by designation.
PER CURIAM:

                                    I. BACKGROUND

       Appellant, Alpha International (“Alpha”), appeals the district court’s

affirmance of three orders1 of the U.S. Bankruptcy Court for the Southern District

of Florida, which, among other things, permitted Appellee, General Foam Plastics

Corp. (“GFP”), to intervene as a third party without being bound by the resulting

orders.

       This litigation arises out of the bankruptcy court, with Alpha attempting to

clarify the terms of a 2001 Asset Purchase Agreement (“APA”) in which it

purchased substantially all the assets of two businesses in bankruptcy, Empire of

Carolina, Inc. and Empire Industries, Inc. (“Debtors”). Alpha attempted to do so

by stipulation with the Debtors, which was incorporated into a Final Judgment in

the bankruptcy court. GFP, who was opposing Alpha in separate litigation, feared

the language in the Final Judgment could harm its interest in the other litigation

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        The first order on appeal is an Order Granting Motion of GFP for Rehearing, to Vacate Final
Judgment, and for Intervention and Granting in Part and Denying in Part Alpha’s Motion to Reopen
Adversary Proceeding, Amend Stipulation, and for Entry of Amended Stipulation of Judgment
(“Rehearing Order”). The second order on appeal is an Amended Final Judgment. The third order
on appeal is an Order Denying Alpha’s Motion to Amend the Rehearing Order and the Amended
Final Judgment (“Order Denying Amendment Motion”).

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and moved to intervene. The bankruptcy court permitted intervention, and altered

the Final Judgment according to GFP’s wishes. On appeal, the district court, in a

26-page opinion, affirmed the bankruptcy court’s orders.

                                     II. ISSUES

      The issues presented on appeal are (1) whether GFP was properly permitted

to intervene; (2) whether the district court’s interpretation of the Asset Purchase

Agreement was correct; (3) whether GFP’s limited intervention required it be

bound by the Amended Final Judgment and whether the bankruptcy court abused

its discretion in permitting such limited intervention; and (4) whether the form of

the Amended Final Judgment was in full accord with the decision of the

bankruptcy court.

                         III. STANDARDS OF REVIEW

      Factual and legal determinations made by the bankruptcy court are

independently reviewed by this court, using the same standards of review as the

district court. In re Int'l. Admin. Servs. Inc., 408 F.3d 689, 698 (11th Cir. 2005).

“We review the findings of fact made by the bankruptcy court for clear error. A

factual finding is not clearly erroneous unless this court, after reviewing all of the

evidence, [is] left with the definite and firm conviction that a mistake has been

committed. This court conducts a de novo review of determinations of law,

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whether from the bankruptcy court or the district court." Id. (citations and internal

quotations marks omitted).

       Issues relating to mandatory intervention are subject to de novo review.

Loyd v. Alabama Dep't of Corr., 176 F.3d 1336, 1339 (11th Cir. 1999). Issues

relating to permissive intervention are reviewed for abuse of discretion. Purcell v.

BankAtlantic Fin. Corp., 85 F.3d 1508, 1513 (11th Cir. 1996).

                                      IV. DISCUSSION

       The bankruptcy court did not address whether it granted GFP the right to

intervene under mandatory intervention principles or permissive intervention

principles.2 On appeal, the district court ruled that intervention was proper under

either standard. Because we conclude that intervention was proper under

permissive standards, we hold that the district court did not abuse its discretion.

       Federal Rule of Bankruptcy Procedure 7024(b) incorporates Federal Rule of

Civil Procedure 24(b), and provides that a court may allow permissive intervention

when an applicant’s claim or defense and the main action have a question of law

or fact in common. Purcell v. BankAtlantic Fin. Corp., 85 F.3d at 1513 (analyzing

       2
         GFP actually intervened on two aspects of the litigation– to contest the representation that
it consented to the Final Judgment, and to contest the language amending the APA. Alpha does not
contest that it was proper for the court to permit intervention as to the consent, but argues that
intervention as to the APA was improper.

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denial of intervention under Fed. R. Civ. P. 24). “[O]ur task is not to determine

whether the factors of Rule 24(b) were present, but is rather to determine whether

the trial court committed a clear abuse of discretion in denying the motion. We

must affirm under the abuse of discretion standard unless we at least determine

that the district court has made a clear error of judgment, or has applied an

incorrect legal standard." Id. (citations and internal quotation marks omitted).

      Suffice it to say that we conclude from the record that GFP was properly

permitted to intervene on a limited basis in the adversary action between Alpha

and the Debtors. GFP was a substantial creditor of the Debtors. As such, it had an

interest in assuring that the original APA and sale order approving it were not

modified unless Alpha and the Debtor first sought relief from the final sale order,

approving the original APA, and the order dismissing the Debtors’ bankruptcy

cases in February 2003. Additionally, Alpha’s final judgment improperly recited

that GFP consented to the final judgment; this misrepresentation needed to be

corrected. Moreover, Alpha sued GFP in North Carolina with respect to the

intellectual property claims that it seeks to expand in the present litigation.

Therefore, given its interest as a creditor, Alpha’s misrepresentation as to its

consent, and the pending North Carolina action involving intellectual property

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claims, GFP had a sufficient interest to support permissive intervention under

Bankruptcy Rule 7024.

      Concerning the remaining issues presented in this appeal, we affirm the

district court’s disposition of them based upon its well-reasoned order affirming

the orders of the bankruptcy court filed on February 28, 2005.

      AFFIRMED.

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