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Order") granting the ACC the authority to file claims against certain directors and officers of LTV, including the six appellants in this case: Moran, Bricker, Babcock, Baske, Evans, and Henning. Moran appealed the Standing Order; the remaining appellants (the "Remaining Appellants") filed a motion to dissolve the ACC, which was denied. The Remaining Appellants appealed the denial of their motion and the district court refused to hear the appeal after holding that they were not 'persons aggrieved.' Ironically, Moran became an administrative creditor of the estate when he was sued by the ACC due to an indemnity provision.
Issues: Whether Moran and the Remaining Appellants were persons aggrieved that had standing to appeal, respectively, the Standing Order and the order denying the motion to dissolve the ACC.
Rules: Under the 'person aggrieved' doctrine, "a party does not have standing to appeal a bankruptcy court order unless that party is 'directly and adversely affected pecuniarily by the order.' ... Parties may not appeal a bankruptcy court order unless they have a direct financial stake in the order such that it 'diminishes [their] property, increases [their] burdens, or impairs [their] rights.' ... This standing requirement is 'more limited than Article III standing or the prudential requirements associated therewith.'" The interests asserted by parties that are defendants in adversary proceedings brought by parties granted derivative standing are not protected by the Bankruptcy Code. Indeed, the interests are diametrically opposed to the primary goal of the Bankruptcy Code: to minimize injury to creditors.
Holding: Moran: affirmed. Moran is not a person aggrieved under the Standing Order. Remaining Appellants: affirmed. The Remaining Appellants are not persons aggrieved under the order appointing the ACC.
Reasoning: Moran: the court is aware of no court that has held that the "burden of defending a lawsuit, however onerous or unpleasant, is the sort of direct and immediate harm that makes a party 'aggrieved' so as to confer standing in a bankruptcy appeal." And, Moran's status as an administrative claimant likewise does not provide him with standing to appeal the Standing Order because "simply holding a claim of any type against the estate does not automatically confer appellate standing under the 'person aggrieved' doctrine." Indeed, Moran's argument is somewhat disingenuous because his status as an administrative claimant is "solely dependant on the existence of the Standing Order that he now seeks to challenge." It is nothing more than a roundabout way to argue that his status as a defendant confers upon him person aggrieved standing. The appropriate parties to seek review of the Standing Order are creditors of LTV whose recoveries would be diminished should the ACC's claims fail. Remaining Appellants: For the same reasons as set forth in the portion of the opinion discussing Moran's lack of standing, the Remaining Appellants also lack standing. Notes: Judge Kennedy dissented as to the portion of the opinion finding that Moran lacked standing under the 'person aggrieved' doctrine. Judge Kennedy felt that because Moran was an administrative creditor of the estate, he had standing to appeal the Standing Order.
Facts: The PBGC appeals from a judgment in favor of Oneida. The bankruptcy court held that Termination Premiums created by the Deficit Reduction Act of 2005, are prepetition contingent claims dischargeable in bankruptcy. The Termination Premiums paid to the PBGC help insure employees against the non-payment of pension benefits if the employer terminates the pension plan under certain circumstances. In March 2006, Oneida filed for chapter 11 bankruptcy. While in chapter 11, Oneida terminated one of its single-employer, defined-benefit pension plan, the Oneida Plan. Oneida then filed an adversary proceeding seeking a declaratory judgment that the Termination Premium was an unsecured, prepetition bankruptcy claim under § 101(5).
Issues: Whether Termination Premiums, created by the Deficit Reduction Act of 2005, are unsecured claims that are dischargeable in bankruptcy.
