Court Opinion

ID: 22016
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:51:05+00
Date Added: 2024-06-11T15:04:44.280340
License: Public Domain

REVISED - September 22, 2000

               IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT

                         _____________________

                              No. 99-20576
                         _____________________

In The Matter Of:    CPDC INC
                              Debtor
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JOSEPH ZER-ILAN; IDEAL SYSTEMS INC
                              Appellants

          v.

GARY FRANKFORD; BEN B FLOYD
                                 Appellees

_________________________________________________________________

           Appeal from the United States District Court
                for the Southern District of Texas
_________________________________________________________________

                            August 3, 2000

Before KING, Chief Judge, and GARWOOD and DeMOSS, Circuit Judges.

KING, Chief Judge:

     Appellants Joseph Zer-Ilan and Ideal Systems, Inc. appeal

from the district court’s dismissal of their bankruptcy appeal.

Because we find that the district court abused its discretion, we

reverse the district court’s judgment and reinstate the appeal.

               I.    FACTUAL AND PROCEDURAL BACKGROUND
     CPDC, Inc. (“CPDC”) is a Texas corporation.   In May 1995,

CPDC filed for Chapter 11 protection in the United States

Bankruptcy Court for the Southern District of Texas.   On

September 11, 1995, Appellants Joseph Zer-Ilan and Ideal Systems,

Inc. (“Ideal Systems”) (collectively, “Appellants”) each filed a

proof of claim for an approximately $2.4 million secured claim.1

The claim was based on a series of transactions between Ronald

Sexton, CPDC’s director and president (who also owned one-third

of CPDC’s stock), and Zer-Ilan that occurred in August 1994.2

     On August 23, 1996, Appellee Gary Frankford, as creditor and

representative of CPDC, instituted an adversary proceeding to

determine the allowability of Appellants’ claim pursuant to 11

U.S.C. § 502.   Appellee Ben Floyd, the bankruptcy trustee for

CPDC (collectively with Frankford, “Appellees”), intervened in

the action.   The first amended complaint asserted that the loan

     1
        On October 27, 1995, Zer-Ilan filed an amended proof of
claim restating the amount of the claim as “[u]ndetermined but
believed to be in excess of $1,275,000.00.” Ideal Systems did
not file another proof of claim.
     2
        These transactions were comprised, in part, of (1) a
$1,075,000 secured promissory note from Sexton to Zer-Ilan
executed on August 2, 1994 and modified to include CPDC as
successor borrower on August 23, 1994; (2) a deed of trust
executed by Sexton as grantor on behalf of Zer-Ilan on August 2,
1994 and modified to include CPDC as successor grantor on August
23, 1994; (3) a $200,000 secured promissory note executed August
2, 1994 between CPDC as pledgor and Zer-Ilan as secured party;
(4) a consulting agreement dated August 2, 1994 between CPDC and
Ideal Systems; and (5) a security agreement (stock pledge) dated
August 2, 1994 between Sexton, Don Seerfried and Shelton Smith as
pledgors and Zer-Ilan as secured party.

                                 2
transactions between Zer-Ilan, Ideal Systems, CPDC, and Sexton

violated Texas usury laws, and therefore that Zer-Ilan’s claims

should be disallowed and three times the excess interest awarded

as damages.    Appellees also sought to have Zer-Ilan’s claim

subordinated, to avoid a postpetition foreclosure sale by Zer-

Ilan of real property belonging to CPDC, and to recover 199

performing notes transferred prepetition from Sexton to Zer-Ilan.

Appellees also requested reasonable expenses and attorney’s fees.

     The parties filed cross-motions for summary judgment, both

of which were denied by the bankruptcy court on November 22,

1996.    The parties resubmitted their motions after discovery was

completed.    On September 2, 1997, the bankruptcy court granted

Appellees’ motion for partial summary judgment on their usury

claim and denied Appellants’ cross-motion.     The summary judgment

order disallowed Appellants’ claims against the estate in their

entirety and extinguished Appellants’ security interests in the

estate’s assets.    The court also dismissed Appellees’ claim for

equitable subordination as moot.3     The only remaining fact

question, the issue of damages, was tried before a jury.        The

jury determined that Appellants had provided $40,000 worth of

services pursuant to the consulting agreement.

     3
        Appellees had moved to sever and abate their equitable
subordination and fraudulent conveyance claims on July 11, 1997.
The court accepted the nonsuit at a status hearing held on July
24, 1997, but did not issue a separate order.

                                  3
     On February 3, 1999, the bankruptcy court entered a final

judgment against Appellants.     In their motion for entry of final

judgment, Appellees submitted a calculation of actual damages in

the amount of $1,797,605.28.4    The court adopted Appellees’

calculation and awarded them $1,797,605.28 in actual damages,

$380,691.75 in attorney’s fees, costs of court, and post-judgment

interest to Floyd as trustee of the estate.

     On February 12, 1999, Appellants filed a notice of appeal of

the bankruptcy court’s judgment with the clerk of the bankruptcy

court.    On February 22, Appellants filed their designation of

record excerpts in accordance with Federal Rule of Bankruptcy

Procedure 8006.    However, Appellants failed to file a statement

of issues, also required by Rule 8006, at the same time.     On

February 22, Appellee Frankford also filed a notice of cross-

appeal.    On March 4, Appellees filed a designation of record

excerpts and statement of issues to be presented on cross-appeal.

On the same day, Appellants’ counsel contacted Appellees’ counsel

“to discuss the issues on appeal and to coordinate the

preparation of the record.”     According to Appellants’ counsel,

Appellees’ attorney stated at that time that Appellees would not

     4
        The document attached to Appellees’ motion indicated that
they had arrived at this figure by adding the interest on the
$1,075,000 note, the difference between the $750,000 consulting
fee and the value of services rendered under that agreement, and
the difference between the fair market value of the performing
notes received by Zer-Ilan and the amount he paid for those
notes; subtracting the maximum allowed interest on the $1,075,000
notes from this sum; and trebling the resulting $599,201.76.

                                   4
designate additional record excerpts other than those previously

designated for the purposes of their cross-appeal.

     On March 15, Appellants’ designated record excerpts were

filed with the clerk of the bankruptcy court.       Among the filings

were five documents, four of which were volumes of trial

transcripts, that had not been previously identified in the

record designation.    Furthermore, three documents identified on

the original record designation were not included in the record

excerpts presented to the clerk.       A letter to the clerk

accompanying the filings listed all of the record excerpts

submitted to the clerk, including the transcripts.       The appeal

was placed on the docket of the United States District Court for

the Southern District of Texas.

     On March 25, 1999, Appellees filed a motion to dismiss the

appeal.    The motion was predicated on the fact that Appellants

had failed to file a statement of the issues on appeal.         On April

6, Appellants filed their statement of issues on appeal,

accompanied by a motion for leave of court to file it.         On the

same day, Appellants filed their response to Appellees’ motion to

dismiss.    Appellants argued that, prior to dismissing the appeal,

the district court should (1) make a finding of bad faith or

negligence; (2) consider whether the delay prejudiced other

parties; or (3) indicate that it considered the impact of

sanctions and available alternative sanctions.       Appellants

maintained that their counsel “innocently neglected” to file the

                                   5
statement of issues.   They further contended that there was

evidence of neither bad faith nor prejudice.   They also pointed

to the fact that they had complied with the rule when notified of

their dereliction.   In addition, they argued that under Fifth

Circuit precedent, dismissal is a penalty of last resort, and

inappropriate in their case.5

     After receiving the statement of issues, Appellees contended

in their reply brief on the motion to dismiss the appeal that the

record was deficient and that they would require extra time to

designate additional record excerpts.   They anticipated a delay

of approximately three months, which, they claimed, increased the

risk that Zer-Ilan, whose Texas assets were insufficient to

satisfy the judgment, would transfer his assets out of

California, where he resided.

     Appellants timely filed their brief on appeal.6   On May 13,

1999, the district court dismissed the appeal without ruling on

Appellants’ motion for leave to file the statement of issues.     In

     5
        Appellants also argued that dismissal was inappropriate
under either Federal Rule of Bankruptcy Procedure 8001(a) or
9006(b)(1).
     6
          Appellants had received an extension of time to file
their brief. The brief was mailed on the due date, May 6, 1999,
and thus was deemed timely filed pursuant to Rule 8008. See FED.
R. BANKR. P. 8008(a). Appellants also filed a supplemental
designation of materials for the record, which consisted of
Appellants’ brief in support of their second motion for summary
judgment and a transcript of a pretrial conference before the
bankruptcy court.

                                 6
its entirety, the memorandum opinion (“Opinion on Dismissal”)

read as follows:

     The Top Ten[] reasons the appeals of Joseph Zer-Ilan
     and Ideal Systems, Inc., must be dismissed are that
     they:

          10.   Failed to file their statement of the issues
                for appeal on time;

          9.    Failed to move for an extension of time to
                file their statement;

          8.    Delayed six weeks to move for leave to file
                their statement late, and only after
                notification from their opposing party;

          7.    Notified their opposing party six weeks late
                of their issues for appeal;

          6.    Delivered five documents to the clerk that
                they failed to designate on time;

          5.    Failed to move for an extension of time to
                deliver their five non-designated documents
                to the clerk;

          4.    Failed to notify their opposing party that
                they had delivered five non-designated
                documents to the clerk;

          3.    Delayed eleven weeks to move for leave to
                supplement their record for appeal with the
                five non-designated documents;

          2.    Failed to deliver three documents to the
                clerk that they had designated on time; and

     the number one reason their appeal will be dismissed,

          1.    Failed to file their appellate brief on time,
                after being given a 30-day extension.

     On May 21, Appellants filed a motion for relief from the

dismissal order/motion for rehearing.   In their motion,

Appellants argued, inter alia, that they had timely filed their

                                 7
appellate brief, which negated the district court’s “number one”

reason for dismissing the appeal.    Appellants also attached an

affidavit by their lead appellate counsel, in which she asserted

that the failure to file the statement of issues “was due to

counsel’s inadvertence,” but “was not intentional and was not for

purposes of delay.”   They also noted that the filing of a

statement of issues is a requirement “peculiar to a bankruptcy

appeal,” which counsel had overlooked.    Appellees conceded that

the Appellants’ brief was timely filed, but asserted that

dismissal was appropriate because the district court had found

nine instances of carelessness, consistently dilatory conduct,

lack of candor, negligence, and bad faith by Appellants.

     On May 28, 1999, the district court issued an opinion and

order denying reinstatement of the appeal (“Opinion on

Reinstatement”).   The district court found that even though

Appellants’ brief was timely filed, Appellants had “repeatedly

failed to follow the rules of procedure.”    The district court

explained:

          Litigants must follow the rules, meet the
     deadlines, and, if necessary, ask for an extension
     before the deadline. . . .

          The court does not know why the appellants did and
     did not do anything, and it is their responsibility to
     meet the rules or to explain the extraordinary
     circumstances that interfered with their ability to
     meet them. Neither the court nor the appellees have
     the burden of proving that the failures prejudiced
     them. Only if there is an extraordinary circumstance,

                                 8
     then the significance of the prejudice is weighed to
     determine whether equity should intervene.

          The right to an appeal is conditioned on
     appellants’ meeting the rules. Dismissal of an appeal
     is not punishment; it is the natural consequence of the
     appellants’ choices . . . .

(Emphasis in original).   The district court also rejected the

argument that Appellants should not be penalized for their

counsel’s errors.   It therefore declined to reinstate the appeal.

Appellants timely appeal to this court.7

                          II.   DISCUSSION

     Appellants argue on appeal that the district court abused

its discretion in dismissing the appeal because it failed to

consider (1) the egregiousness of the conduct and the explanation

offered by the offending party; (2) the equity of dismissing a

client’s appeal because of a lawyer’s conduct; (3) the efficacy

of lesser sanctions; and (4) prejudice to the appellee and bad

faith by the appellant.   Further, Appellants maintain that the

uncontroverted record demonstrates that the late filing was

neither due to bad faith nor part of a pattern of dilatory

conduct, but rather the result of an inadvertent mistake of

counsel.   Appellants also contend that dismissal is only proper

when the facts are much more egregious than those present here.

     7
        Appellants’ Notice of Appeal states that Appellants
appeal both the district court’s original order on dismissal, and
subsequent order denying reinstatement.

                                  9
Finally, they assert that Appellees suffered no prejudice.

Appellees argue that the district court’s decision should be

affirmed because Appellants’ failure to plausibly explain their

breaches of procedure supports a finding of negligence,

indifference, or bad faith; and because they have suffered

prejudice.   In the alternative, Appellees contend that Appellants

waived all of their issues on appeal by failing to file a

statement of issues.8

                        A.   Standard of Review

     We review actions taken by the district court in its

appellate role for an abuse of discretion.        See In re Braniff

Airways, Inc., 774 F.2d 1303, 1305 (5th Cir. 1985) (citing

Pyramid Mobile Homes, Inc. v. Speake, 531 F.2d 743, 746 (5th Cir.

1976) (per curiam) (internal citations omitted)).       A district

court abuses its discretion when its decision is based on an

erroneous view of the law.     See In re Sealed Appellant, 194 F.3d
8
        Appellees also argue that because Zer-Ilan was out of the
country and had a bench warrant for his arrest issued by the
bankruptcy court in connection with the enforcement of the
underlying bankruptcy judgment after the notice of appeal had
been filed with this court, this court should dismiss the appeal
based on the fugitive disentitlement doctrine. Appellees filed a
separate motion to dismiss the appeal advancing the same
argument. Appellants argue in their reply brief that the
fugitive disentitlement doctrine is inapplicable because Zer-Ilan
has since appeared before the bankruptcy court and purged the
contempt order. Appellees later withdrew their motion,
consistent with Appellants’ assertion. Consequently, we decline
to address the application of the fugitive disentitlement
doctrine to this appeal.

                                   10
666, 670 (5th Cir. 1999) (citations omitted).          Furthermore, this

court has held that, in reviewing a district court’s dismissal of

a bankruptcy appeal for non-jurisdictional defects under Federal

Rule of Bankruptcy Procedure 8001(a), we should “review the

district court’s action with attention to ‘the prejudicial effect

of delay on the appellees and the bona fides of the appellant.’”

Braniff, 774 F.2d at 1304 (citing Pyramid, 531 F.2d at 746)

 B. Discretion to Dismiss a Bankruptcy Appeal Under Rule 8001(a)

     Federal Rule of Bankruptcy Procedure 8006 requires

appellants to “file with the clerk and serve on the appellee a

designation of the items to be included in the record on appeal

and a statement of the issues to be presented” within 10 days of

filing a notice of appeal.        FED. R. BANKR. P. 8006.   Rule 8006

further requires appellants to “provide to the clerk a copy of

the items designated” and arrange for any transcripts to be

delivered to the clerk.        See id.     The rule also instructs all

parties to “take any other action necessary to enable the clerk

to assemble and transmit the record.”           Id.

     Commentators have explained that the purpose of the record

designation requirement is to provide the reviewing court with an

adequate basis for evaluating the appellant’s claims on appeal.

See 10 COLLIER   ON   BANKRUPTCY ¶ 8006.03[1] (15th ed. 2000).   The

burden of creating an adequate record rests with the appellant,

who may not urge an issue on appeal if he has failed to provide

                                      11
the appellate court with the requisite record excerpts.            See id.;

Pyramid, 531 F.2d at 745 (citations omitted).            Likewise, the

purpose of the statement of issues is “principally to identify

the portions of the testimony below that should be included in

the record on appeal.”        Editors’ Comment, NORTON BANKRUPTCY RULES

PAMPHLET 1999-2000 EDITION 559 (2d ed. 1999); In re Bishop, Baldwin,

Rewald, Dillingham & Wong, Inc., 104 F.3d 1147, 1148 (9th Cir.

1997) (citing NORTON BANKRUPTCY RULES PAMPHLET 1996-97 EDITION 594

(1996); 9 COLLIER   ON   BANKRUPTCY ¶ 8006-10 (1996)).

     Rule 8001(a) states that “[a]n appellant’s failure to take

any step other than timely filing a notice of appeal does not

affect the validity of the appeal, but is ground only for such

action as the district court . . . deems appropriate, which may

include dismissal of the appeal.”          As the language of the rule

makes clear, only the failure to file a notice of appeal, which

deprives the reviewing court of jurisdiction, mandates dismissal.

In contrast, the district court does not invariably dismiss for

breaches of other procedural rules, including Rule 8006.            See In

re Tampa Chain Co., Inc., 835 F.2d 54, 55 (2d Cir. 1987) (per

curiam) (citations omitted).        Rather, the court must exercise

discretion and consider what sanctions are appropriate.

Dismissal is a harsh and drastic sanction that is not appropriate

in all cases, even though it lies within the district court’s

discretion.   In addition, when, as here, an appeal is dismissed

because of an attorney’s error, the client is unduly punished for

                                      12
his attorney’s mistakes.   See Editors’ Comment, NORTON BANKRUPTCY

RULES at 523 (“While counsel for the appellant may be sanctioned,

a dismissal of the appeal would unfairly penalize the client.”);

In re Hill, 775 F.2d 1385, 1387 (9th Cir. 1985) (per curiam)

(finding an abuse of discretion when “the default was the fault

of the attorneys and not the litigant[, y]et the impact of the

sanction imposed is primarily against the client”).

     Here, the district court erred by failing to properly

exercise the discretion granted by Rule 8001(a).    The district

court’s Opinion on Reinstatement states that the dismissal of the

appeal was “the natural consequence” of Appellants’ failure to

follow the rules of bankruptcy procedure.    Further, the district

court stated that “[o]nly if there is an extraordinary

circumstance, then the significance of the prejudice is weighed

to determine whether equity should intervene.”     (Emphasis added).

This indicates that the district court incorrectly interpreted

the rule to mean that a district court has discretion to decide

not to dismiss an appeal when procedural rules have been

breached, rather than discretion to decide whether dismissal is

appropriate.   The district court’s interpretation presupposes,

contrary to the plain language of Rule 8001(a), that dismissal is

the norm rather than a possible sanction warranted only in

extreme cases.   Moreover, the opinion states that this negative

discretion may only be exercised upon a threshold showing of

extraordinary circumstances by the appellant.    This construction

                                13
of the rule is unsupported by the text of Rule 8001(a), its

commentary, or the caselaw interpreting and applying the rule.

Thus, the district court’s decision was based on an erroneous

view of the law and must be vacated as an abuse of discretion.

     Several of our sister circuits have established lists of

factors that a district court must consider in deciding whether

infractions of procedural rules (other than the failure to file a

notice of appeal) warrant dismissal under Rule 8001(a).     See,

e.g., In re SPR Corp., 45 F.3d 70, 72, 74 (4th Cir. 1995)

(district court should (1) make a finding of bad faith or

negligence; (2) give appellant notice or opportunity to explain

the delay; (3) consider possible prejudicial effect of delay on

other parties; and (4) consider the impact of the sanctions and

available alternatives);   In re Fitzsimmons, 920 F.2d 1468, 1474

(9th Cir. 1989) (district court must consider (1) alternative

sanctions and relative fault of the client and attorney unless

egregious circumstances exist; (2) the existence of bad faith,

which can constitute egregious conduct).   This court has thus far

declined to create a definitive test for the district courts in

our circuit.   Cf. In re M.A. Baheth Constr. Co., Inc., 118 F.3d
1082, 1084 (5th Cir. 1997), cert. denied by M.A. Baheth & Co. v.

Schott, 522 U.S. 1092 (1998) (in determining whether to dismiss

appeal for failure to file statement of issues in accordance with

FED. R. APP. P. 6(b)(2)(ii), court considered “mitigating factors”

but did not establish list thereof).   However, we have upheld a

                                14
district court’s decision to dismiss a bankruptcy appeal under

Rule 8001(a) when the appellee has shown prejudice from the delay

and when the appellant has exhibited “obstinately dilatory

conduct.”   See Braniff, 774 F.2d at 1304 (citations omitted);

Pyramid, 531 F.2d at 746.

     Although we do not here establish a definitive list of

factors, we think that, in determining whether dismissal is an

appropriate sanction, a district court should keep in mind that

some infractions of the rules of bankruptcy procedure are

harmless and do not merit dismissal; that dismissal unfairly

punishes clients for the mistakes of their counsel in some cases;

and that the primary goal of courts as enforcers of the

bankruptcy rules should be to ensure the swift and efficient

resolution of disputes pertaining to the distribution of the

bankruptcy estate.   With these considerations in mind, we turn to

the record.

     As an initial matter, we note that several of the nine

remaining reasons justifying dismissal in the district court’s

original Opinion on Dismissal cannot withstand even a cursory

analysis.   First, Appellants contend, and Appellees do not

dispute, that the three designated record excerpts not filed with

the clerk consisted of (1) a notice of appeal mistakenly

designated as having been filed on November 5, 1998, actually

filed on November 5, 1996; (2) a motion for leave to file a

notice of appeal mistakenly designated as having been filed on

                                15
November 5, 1998, actually filed on November 5, 1996; and (3) a

second copy of a supplement to Appellants’ re-urged motion for

summary judgment that had been designated under two different

headings.   Thus, two of the designated documents that were not

filed do not exist as designated, and the third was a duplicate.

Second, Appellants’ letter to the bankruptcy clerk, which

accompanied the filings and listed the four volumes of

transcripts not previously designated, was copied to Appellees.

Appellees nowhere contend that they did not receive this letter

contemporaneously with the filings.   Third, it appears that the

motion for leave to supplement the record asserted by the

district court to have been filed eleven weeks late actually

pertained to a summary judgment brief and the transcript of a

pre-trial conference before the bankruptcy court, not to the five

nondesignated record excerpts filed with the clerk.   We fail to

see how these actions can reasonably be characterized as breaches

of procedure.

     Appellees, though they observe that the district court found

nine instances in which Appellants failed to follow bankruptcy

procedure, cite specifically to Appellants’ failure to (1) timely

file the statement of issues, (2) designate five filings, (3)

notify Appellees of the five nondesignated documents, and (4)

file three designated documents as a failure to follow the

bankruptcy rules.   Appellees assert that these actions

individually justify dismissal under Fifth Circuit caselaw and

                                16
evince negligence, indifference, or bad faith.   For the reasons

discussed above, we are unpersuaded that the latter two reasons

merit further consideration.   Thus, we conclude for the purposes

of the discussion to follow that, in deciding to dismiss the

appeal, the district court relied on Appellants’ defective

performance of two procedural requirements:   filing the statement

of issues and delivering previously designated documents.

     We find nothing in the record that supports dismissal on the

basis of Appellants’ designation and filing of record excerpts

and late filing of the statement of issues.   Although the

statement of issues was not timely filed, Appellants did file

their appellate brief timely and prior to the district court’s

dismissal of the appeal.   Evidence relating to all four issues

raised on appeal was contained in the designated record.9

     9
        The issues on appeal were (1) whether the bankruptcy
court erred in granting summary judgment on Appellees’ usury
claim; (2) whether Frankford had standing to assert usury or
equitable subordination claim; (3) whether Appellees had proved
that equitable subordination was appropriate; and (4) whether the
bankruptcy court erred in calculating the amount of usurious
interest and in awarding attorney’s fees. The first three issues
had previously been argued at summary judgment, and the record
designations filed with the court contain the briefing and
evidence for those motions. The record also contains Appellees’
calculation of damages, which the bankruptcy court adopted in its
Final Judgment, the summary judgment evidence that formed the
basis of that calculation, and the trial transcript showing that
the bankruptcy court excluded controverting evidence on the fair
market value of the 199 performing notes. As far as the
attorney’s fees issue is concerned, we note that Appellants only
argued that the award of attorney’s fees to Frankford was
inappropriate because Frankford allegedly lacked standing. Thus,
that issue would not appear to require evidentiary support
independent of the evidence pertaining to Frankford’s standing.

                                17
Consequently, the district court has an adequate record upon

which to decide the merits of the appeal, and the purpose of Rule

8006 has therefore been satisfied despite Appellants’ failure to

strictly adhere to its technical requirements.   Furthermore, the

record does not indicate that Appellees’ ability to respond to

the appeal has been impaired in any way.   Appellees do not here

contend that they were prejudiced by the incomplete designation

of record excerpts.   Moreover, because Appellants filed their

brief and sufficient record excerpts in support thereof,

Appellees were placed on notice as to what issues they would be

required to defend, and have an adequate record on which to

defend them.   Furthermore, Appellees have not alleged that either

the bankruptcy estate or its creditors have suffered any injury

from the delayed filing of the statement of issues; and our

review of the record reveals none.10   See Braniff, 774 F.2d at

1304 (citing Pyramid, 531 F.2d at 746).    Thus, we conclude that

Appellees suffered no prejudice under these circumstances.

     10
        Appellees assert that they have been prejudiced because
Zer-Ilan’s conduct in the enforcement proceedings before the
bankruptcy court has created delays, increased costs, and
“threatened Floyd’s and Frankford’s legitimate efforts to enforce
the Bankruptcy Final Judgment.” Although we recognize that “time
is of the essence” in bankruptcy proceedings, the delay Appellees
refer to here did not result from Appellants’ prosecution of the
appeal, and in fact could have occurred whether or not Appellants
had filed an appeal at all. Therefore, this prejudice, if any in
fact occurred, does not justify a dismissal of the appeal. The
prejudice to Appellees’ interest in enforcing the judgment is
likewise outside the scope of the 8001(a) analysis.

                                18
     In addition, there is no evidence of either an intent to

delay or obstinately dilatory conduct on the part of Appellants

that could otherwise justify dismissal.    See Fitzsimmons, 920
F.2d at 1474 (finding that a district court was not required to

consider other factors when appellants had exhibited “bad faith

behavior”).    Rather, the record establishes that Appellants

timely filed their notice of appeal, record designation, and

appellate brief and complied with the rules of bankruptcy

procedure with regard to all other aspects of prosecuting their

appeal.   Cf. In re Champion, 895 F.2d 490, 492 (8th Cir. 1990)

(per curiam) (no abuse of discretion for dismissing appeal when

appellant had not filed a designation of record excerpts or

statement of issues nine months after filing of notice of

appeal); Greco v. Stubenberg, 859 F.2d 1401, 1403-04 (9th Cir.

1988) (no abuse of discretion for dismissing appeal when

appellant’s counsel repeatedly failed to order transcripts,

misrepresented to court that transcripts had been ordered, and

did not notify court of inability to do so for nine months);

Pyramid, 531 F.2d at 746 (“[F]or over four months after filing

its appeal appellant had made no effort to comply with the

Rules.”).

     In the absence of evidence of prejudice or obstinately

dilatory conduct, and given that the purpose of Rule 8006 has

been satisfied, we conclude that dismissal was not justified in

this case.    See In re Winner Corp., 632 F.2d 658, 661 (6th Cir.

                                 19
1980) (reinstating appeal when there was no evidence of bad

faith).

                        III.   CONCLUSION

     For the foregoing reasons, the district court’s judgment

dismissing Appellants’ appeal of the bankruptcy court’s judgment

is REVERSED and the appeal REINSTATED.   Costs shall be borne by

Appellees.

                                20