Court Opinion

ID: 36901
Source: CourtListenerOpinion
Date Created: 2010-04-25 19:46:25+00
Date Added: 2024-06-11T17:15:31.394968
License: Public Domain

United States Court of Appeals
                                                              Fifth Circuit
                                                           F I L E D
                  UNITED STATES COURT OF APPEALS
                           FIFTH CIRCUIT                  November 17, 2004
                        ___________________
                                                       Charles R. Fulbruge III
                            No. 03-21104                       Clerk
                        ___________________

                         In the Matter of:

         JACOBO XACUR, FELIPE XACUR, and JOSE MARIA XACUR,

                                                           Debtors,
                         JOSE MARIA XACUR,

                                                          Appellant,

                              versus

                     W. STEVE SMITH, TRUSTEE,

                                                          Appellee.

           Appeal from the United States District Court
                for the Southern District of Texas
                          Nos. H-03-1590
                               H-03-1591
                               H-03-1592

Before BARKSDALE and PICKERING, Circuit Judges, and LYNN,* District

Judge.

PER CURIAM:**

*
     District Judge of the Northern District of Texas, sitting by
designation.
**
     Pursuant to 5TH CIR. R. 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this opinion should not be published and is not precedent except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 5TH CIR. R. 47.5.4.
     Jose Maria Xacur contests an order (1) holding him in civil

contempt      for    failing       to    comply    with     a   bankruptcy   court’s

preliminary injunction and (2) imposing sanctions.                    AFFIRMED.

                                            I.

     Jose Maria Xacur is a Mexican national who, with his brothers,

reputedly      owns    and     controls          several     multi-million    dollar

corporations in Mexico.             Xacur is a large shareholder of several

companies which, taken together, are described as “the Procter and

Gamble of Mexico”.           (When deposed in 1997, Xacur acknowledged

owning a substantial stake in several companies:                    a 30% share in

Hidrogenadora Nacional, S.A. de C.V.; a 30% share in Proteneinas y

Aceites del Bajo; and, together with his wife, a 50% share in

Rangel Development, Inc.                In addition, evidence obtained from a

suspension of payments proceeding in Mexico indicated that Xacur

owned 239 shares of Series A stock and 4,700,898 shares of Series

B stock in Promotor Hinsa, S.A. de C.V.                   He also held 2,998 shares

of Series A stock and 2,985,286 of Series B stock in Detergentes y

Jabones Sasil.)

     On 18 September 1996, a group of Xacur’s creditors placed

Xacur   and    two    of     his    brothers       into    involuntary   Chapter   7

bankruptcy.     W. Steve Smith was appointed interim trustee for the

bankruptcy estate (the Trustee).

     On 12 September 1997, the Trustee commenced an adversary

proceeding against Xacur, seeking to compel, inter alia: (1) the

filing of bankruptcy schedules and a statement of affairs; and (2)
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the surrender and turnover of certain assets, including substantial

realty and personalty, as well as stock certificates of several

companies controlled by Xacur and his family.             That same day, the

bankruptcy court entered a temporary restraining order, requiring

Xacur,   inter   alia,    to   turn   over   to   the   Trustee    all   stock

certificates and other evidence of ownership in Xacur’s companies.

On 24 September 1997, the bankruptcy court entered a preliminary

injunction requiring Xacur, within 15 days, to turn over the stock

certificates he owned and to file bankruptcy schedules and a

statement of affairs.

     Xacur failed to comply.      On 19 August 1999, the Trustee moved

for civil contempt against Xacur, seeking money sanctions, Xacur’s

incarceration,    and    attorney’s   fees.       Xacur    obtained   several

continuances of the hearing on the Trustee’s motion.              During that

period, Xacur asserted generally that he could not comply with the

preliminary injunction because:        it would subject him to criminal

liability for violating Mexican court orders; and a bankruptcy

discharge would not be recognized by Xacur’s Mexican creditors

without obtaining an express agreement in which the creditors

agreed to recognize the discharge.

     On 9 December 1999, after Xacur obtained new counsel, the

bankruptcy court was advised that Xacur and the Trustee were

attempting to resolve the impasse.           Consequently, the bankruptcy

court removed the contempt motion from the court’s calendar.               In

                                      3
the months that followed, the Trustee and Xacur attempted to

resolve Xacur’s concerns.

     On 8 September 2000, however, the Trustee requested that the

contempt motion be restored to the bankruptcy court’s calendar.   A

hearing was held on 16 July 2001, at which both sides presented

evidence.     On 11 October 2001, the bankruptcy court entered an

order finding Xacur in contempt of court for failing to comply with

the preliminary injunction, imposed a sanction of $5,000 for each

day that Xacur failed to comply, and awarded attorney’s fees in the

amount of $158,626.50.

     On 22 October 2001, pursuant to Bankruptcy Rule 9020, Xacur

filed objections to the contempt order.     At that time, Rule 9020

provided in relevant part:

            The [contempt] order shall be effective 10
            days after service of the order and shall have
            the same force and effect as an order of
            contempt entered by the district court,
            unless, within the 10 day period, the entity
            named therein serves and files objections
            prepared in the manner provided in Rule
            9033(b). If timely objections are filed, the
            order shall be reviewed as provided in Rule
            9033.

FED. R. BANKR. P. 9020(c) (prior to 1 Dec. 2001 effective date of

amendment).    Rule 9033(d) provides:

            The district judge shall make a de novo review
            upon the record or, after additional evidence,
            of any portion of the bankruptcy judge’s
            findings of fact or conclusions of law to

                                  4
             which specific written objection has been made
             in accordance with this rule.

FED. R. BANKR. P. 9033(d).

       On 1 December 2001, before the district court reviewed Xacur’s

objections, an amendment to Rule 9020 became effective.                   The rule

was amended to read: “Rule 9014 governs a motion for an order of

contempt made by the United States trustee or a party in interest”.

FED. R. BANKR. P. 9020. Rule 9014 establishes the general procedures

for contested matters before the bankruptcy court.

       The rule-change reflected that, previously, there had been

doubt whether the bankruptcy court possessed authority to hold

parties in civil contempt. See FED. R. BANKR. P. 9020 advisory

committee note to the 2001 amendments.            In the 1990s, however, many

circuit     courts,       including    ours,   held    bankruptcy    judges      are

authorized by statute to hold parties in civil contempt.                         See

Placid Refining Co. v. Terrebonne Fuel & Lube, Inc. (Matter of

Terrebonne Fuel & Lube, Inc.), 108 F.3d 609, 613 (5th Cir. 1997)

(bankruptcy     court      possesses    authority     to   hold   civil   contempt

proceedings) .       Because it was no longer perceived that immediate

review by a district court was required, the rule was changed.                   See

FED.   R.   BANKR.   P.    9020   advisory     committee    note    to    the   2001

amendments.      Under the amended rule, a party held in contempt

generally cannot obtain review of the contempt order until after a

final order is entered, at which time the bankruptcy may be

                                          5
reviewed by the district court.             See FED. R. BANKR. P. 9014; 28

U.S.C. § 158(a)(1).

      On 23 September 2002, based on the amendment to Rule 9020, the

district court held it lacked jurisdiction to conduct de novo

review of the contempt order.               Therefore, the district court

remanded   the     matter     to    the     bankruptcy      court       for    final

determination.      On   24   September     2002,     because     Xacur    had     not

complied with the preliminary injunction, the bankruptcy court

ordered Xacur’s incarceration.

      On 1 October 2003, the district court reviewed the contempt

order, the incarceration order, and the award of attorney’s fees,

and affirmed.      For that review, the district court applied the

following standards: factual findings were reviewed for clear

error;   the   injunction     and   the    contempt      order,   for     abuse    of

discretion; and conclusions of law, de novo.

                                      II.

      At issue is whether the district court improperly dismissed

Xacur’s objections to the bankruptcy court’s finding of contempt

and   improperly   declined    to   conduct     a   de    novo    review      of   the

bankruptcy court’s contempt finding.          In this regard, Xacur claims

the district court erred by ruling that, under Rule 9020, as

amended on 1 December 2001, it lacked jurisdiction to review

Xacur’s objections to the bankruptcy court’s contempt order. Xacur

maintains the district court improperly applied the amended rule

                                       6
retroactively because his objections had been filed before the

amended rule became effective.

     The Supreme Court order adopting the 1 December 2001 amendment

to Rule 9020 states that the amended rule “shall govern ... insofar

as just and practicable, [in] all proceedings then pending”.   H.R.

Doc. No. 107-60, at 3 (2001), reprinted in 121 S. Ct. 129 (2001).

Because Xacur’s objections to the contempt order were pending when

Rule 9020 was amended, the amended rule should apply to this case

unless it is not “just and practicable” to do so.

     In contending it is not proper to apply the amended rule,

Xacur asserts only that he was deprived of a de novo hearing by the

district court, and this deprived him of an important safeguard to

his rights.   Xacur makes no contention, however, that, had he

received a de novo hearing, he would have offered any additional

evidence or that there was any other reason why it was not “just

and practicable” to apply the amended rule and not hold the

hearing.   Even though the Trustee urged in response that the

contempt finding would withstand de novo review, Xacur did not

reply.

     Accordingly, Xacur fails to show improper application of

amended Rule 9020.   Therefore, his challenge to the order at issue

fails.

                                 7
                         III.

For the foregoing reasons, the judgment is

                                             AFFIRMED.

                           8