United States District Court, M.D. Louisiana
SUSAN M. RABORN
A. JACKSON JUDGE UNITED STATES DISTRICT COURT.
the Court are Respondent's Motions to Dismiss
Petitioner's Appeals for Mootness and Lack of
Standing. For the reasons stated below, the
court GRANTS Respondent's motions.
August 10, 2015 Susan M. Raborn ("Petitioner")
filed a voluntary Chapter 11 bankruptcy. (Doc. 7 at p. 8). On
August 31, 2016, it was converted to a Chapter 7 bankruptcy.
(Id.). Martin Schott ("Respondent") was
appointed trustee of the bankruptcy estate. In Re
Raborn, No. 15-10938, 12017 WL 1417204, at *2 (Bankr.
M.D. La Apr. 20, 2017)(Doc. 644). Petitioner alleges that the
Bankruptcy Court for the Middle District of Louisiana
improperly approved a fraudulent and faulty accounting
("Final Report") filed by Respondent in his
capacity as trustee of Petitioner's bankruptcy state.
(3:18-CV-00175 Doc. 7 at p. 1.). The Court gleans
Petitioner's allegations to be that Respondent failed to
object to exemptions of certain property from the bankruptcy
proceedings within the 30 days required under Fed.R.Bankr.P.
4003(a)(b), but listed the exempted property in the Final
Report anyway. (Id. at p. 9). Petitioner further
alleges that Respondent's accounting shows that he
collected $405, 000.00 from Petitioner's estate, but
upon realizing that he failed to properly object to
Petitioner's exemption of what seems to be the entire
settlement amount, Respondent "devalued the price of the
settlement" from $405, 000.00 to $207, 000.00 and
claimed that only $198, 000.00 was attributable to certain
stock dividends from Pedicon, Inc. that Petitioner allegedly
argues that the Bankruptcy Court entered an order approving
the Final Report on May 31, 2018. (3:18-CV-00175 Doc. 9 at
¶ 2). Petitioner filed a motion for reconsideration of
that Order, which was denied on June 22, 2018 with written
reasons. (Id.). Pursuant to the terms of the Final
Report, Respondent distributed all of the funds.
(Id. at ¶ 4). One of the creditors was
overpaid, and returned the sum of $887.03. (Id.).
Petitioner filed a motion for supplemental distribution to
distribute the returned money to other creditors, which was
granted. ("Supplemental Distribution")(Id.
at ¶ 5). Petitioner moved for reconsideration of the
supplemental distribution, and was denied relief on September
20, 2018. Now, petitioner appeals the order approving the
Final Accounting and the order denying reconsideration
(3:18-CV-00175 Doc. 1). Petitioner also appeals the order
approving the Supplemental Distribution made by the
Respondent, and the order denying her motion to
reconsideration. (3:18-CV-00904 Doc. 1).
argues that Appellant's appeals in this matter are moot,
because the Orders issued by the Bankruptcy Court were not
stayed. Respondent also argues that the distribution has been
completed and that under the theory of equitable mootness,
both appeals should be dismissed. (3:18-CV-00904 Doc. 7,
3:18-CV-00175 Doc. 9).
further argues that Petitioner does not have standing to
appeal either of the the Bankruptcy Court's ruling on the
Final Report or the Supplemental Distributions.
(Id.). Respondent claims that this is not a surplus
case, as granting Petitioner's requested relief would not
result in recovery of more than the value of the estate.
(Id.). Respondent also asserts that Petitioner is
not "a person aggrieved" as Petitioner would not
receive any distribution should she be victorious in her
appeal, and therefore does not have standing to file this
appeal. (Id.). Further, Respondent argues that the
funds distributed in the Final Report were generated by a
settlement agreement, which ultimately was approved by the
Bankruptcy Court. (Id.). Respondent contends that
contrary to Petitioner's arguments, the funds listed in
the Final Report had nothing to do with Petitioner's
exempted Pedicon, Inc. dividends, which were addressed in a
secondary agreement between Petitioner and Respondent.
arguments are often confusing and difficult to follow,
however he court gleans Petitioner's argument to be that
the Pedicon, Inc., dividends should not have been included in
the Final Report for distributions, as she filed an exception
to the use of those dividends, to which Respondent did not
respond. Petitioner cites various cases to establish that any
exempted funds not addressed by the trustee within a 30-day
window cannot be listed in the Final Report. Petitioner did
not provide an Appellate Brief for arguments pertaining to
the Supplemental Distribution.
STANDARD OF REVIEW
bankruptcy appeals, district courts review Bankruptcy Court
rulings and decisions under the same standards employed by
federal courts of appeal. Carrieri v. Jobs.com
Inc., 393 F.3d 508, 517 (5th Cir. 2004).
Under the "clearly erroneous" standard, this Court
will reverse "only if, on the entire evidence, we are
left with the definite and firm conviction that a mistake has
been made." Walker v. Cadle Co., 51 F.3d 562,
565 (5th Cir. 1995). A bankruptcy court's
dismissal for lack of standing is reviewed de novo.
Joffroin v. Tufaro, 606 F.3d 235, 238 (5th
in addressing Respondent's motion to dismiss
Petitioner's appeal, the question the Court must answer
is whether Petitioner has pleaded sufficient facts to create
the reasonable inference that the Bankruptcy Court's
ruling was "clearly erroneous." The Court finds
that Petitioner has not met that burden for the reasons set