Sterngass v. O'Toole

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

, New York Law Journal

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Judge Edgardo Ramos

Leatherstocking Antiques' April 2010 Chapter 11 petition listed fee simple interests in six properties. In May 2012 its case was converted to Chapter 7, and O'Toole appointed trustee. Over Sterngass' objections to notices of sale, bankruptcy court entered three orders approving the properties' sale at auction. Each of the three orders specified that the sales were arms-length transactions entered into in good faith by their parties. Sterngass did not seek to stay the orders before filing his Aug. 31, 2012, notice of appeal. Despite a Sept. 14 deadline, Sterngass filed his "Designation of Items to be Included on Appeal and Statement of the Issues Pursuant to BR 2006" on Sept. 28, 2012. The trustee closed on three properties on Sept. 17, and on the remainder on Sept. 21. District court dismissed Sterngass' appeal of the bankruptcy court's orders as statutorily and equitably moot. Addressing the five factors outlined in Frito-Lay v. LTV Steel (In re Chateaugay Corp.) the court—noting that Sterngass did not diligently pursue a stay of the subject orders' execution, and observing that the sales of the properties had already closed—deemed it inequitable both to Leatherstocking's estate and the good faith purchasers of the properties to reverse the sales.

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