TRC Optimum Fund v. FairPoint Communications

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Bankruptcy

New York Law Journal

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Judge Thomas Griesa

In Northern New England Telephone Operations bankruptcy, Glacial Energy of New England claimed affiliate FairPoint Communications owed it $580,000. Glacial sold its claim to TRC Optimum Fund in 2010. In FairPoint's proposed reorganization plan, Glacial's claim was not listed as needing cure. Absent objection from TRC or Glacial, bankruptcy court confirmed FairPoint's plan—stating that the cure amount for Glacial's claim was $0.00—on Jan. 13, 2011. While FairPoint's bid to expunge Glacial's claim was pending in bankruptcy court, a state court's March 2012 consent judgment ordered Glacial to pay TRC $672,261 plus interest. Bankruptcy court rejected TRC's April 2012 transfer of claim to Glacial. On the record Glacial holds no claim against FairPoint. District court dismissed Glacial's appeal claiming bankruptcy court improperly expunged its $580,000 claim. Neither TRC nor Glacial had standing to appeal. Because TRC fully recovered by its judgment against Glacial, TRC was not "aggrieved." Because Glacial was not the holder of the claim at issue, it had no "direct pecuniary interest" in the outcome of the appeal. Thus, under Kane v. Johns-Manville Corp. there was no "injury in fact" that was "fairly traceable" to the conduct at issue.

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