The opinion of the court was delivered by: Paul A. Engelmayer, District Judge:
Appellant and debtor Colleen Strawbridge ("Strawbridge") appeals pro se from a July 15, 2011 Order of the United States Bankruptcy Court for the Southern District of New York (Glenn, J.) (the "Order") approving a stipulation by and among appellees Gregory Messer, the trustee of Strawbridge's Chapter 7 estate (the "Trustee"), Angelina Khanamirian ("Khanamirian"), and 200 E. 74 Owners Corporation ("East 74"). That stipulation provides for the transfer of ownership of Strawbridge's apartment to Khanamirian subject to East 74's claim against the apartment. In exchange, the estate receives a release of Khanamirian's claim against it and funds sufficient to satisfy Strawbridge's unsecured creditors. For the following reasons, the Order is affirmed and Strawbridge's appeal is denied.
This appeal arises out of a nearly decade-long dispute between the appellant and her creditors. The genesis of this dispute is a loan, in the amount of $200,000 (the "loan"), which Strawbridge took in October 2000 from a company called Fairmont Funding. See JA-U; JA-V. That loan was secured by the shares Strawbridge owned in East 74, the corporation which owns the co-op apartment in which she lives, and a lease she held as a result of that share ownership. See JA-U; JA-V. Because those shares and the lease relate to the apartment Strawbridge lives in, the loan was, in essence, secured by Strawbridge's home.
The appellant quickly fell behind on the loan payments and, thereafter, also stopped making monthly maintenance payments to her co-op, appellee East 74. Shortly after the loan was made, the originator, Fairmont, assigned the loan to Indymac Bank. On November 13, 2002, immediately before Indymac was to foreclose on the collateral (and, therefore, the apartment), Strawbridge filed her first petition for relief under Chapter 13 of the Bankruptcy Code. JA-A at 2. That case was dismissed by the Bankruptcy Court based on Strawbridge's failure to make payments pursuant to the plan imposed by the Court or provide documents necessary to the administration of the proceeding. Id. at 3. Thereafter, Strawbridge sued Indymac in New York state court, alleging that her debt was the result of a predatory lending scheme; that case was dismissed in 2006 after the court determined that the lending practices surrounding the loan were not predatory. Id.
Indymac then sought to foreclose a second time. On December 19, 2006, Strawbridge filed her second bankruptcy petition, this time under Chapter 11 of the Bankruptcy Code. Id. After limited motion practice and an appeal to the District Court, that petition was also dismissed by the Bankruptcy Court for, inter alia, the debtor's failure to file monthly operating reports or to offer a plan of reorganization. Id. at 5.
After additional litigation in New York state court not relevant to this appeal, Strawbridge filed the instant petition pursuant to Chapter 11 of the Bankruptcy Code on December 8, 2009. Id. at 2. On February 9, 2010, East 74 moved for an order dismissing Strawbridge's petition or, in the alternative, converting it to a liquidation proceeding pursuant to Chapter 7 of the Bankruptcy Code and appointing a trustee to administer the liquidation of the debtor's assets. Id. at 2. On March 5, 2010, the Bankruptcy Court granted East 74's motion to convert the petition to Chapter 7. Id. at 10. In arriving at this conclusion, the Bankruptcy Court stated that "Strawbridge did not file her petition in good faith," and that the 2009 petition was "part of a strategic effort to frustrate the secured creditors' efforts to enforce their interests in the Apartment." Id. at 8. Because of this pattern of behavior, the Bankruptcy Court determined that "it is highly likely that she will merely file a new bankruptcy petition if this case is dismissed," and that "[w]here serial filings are an issue, conversion [to a Chapter 7 proceeding] is in the best interests of the creditors." Id.
While Strawbridge litigated these various matters, the loan secured by her co-op shares and lease changed hands a number of times and continued to collect interest and default fees. In July 2008 Indymac Bank, who had been assigned the loan from the originator, Fairmont Funding, was put into conservatorship by the Federal Deposit Insurance Corporation ("FDIC"). On May 20, 2009, in its capacity as conservator, the FDIC assigned Strawbridge's loan to a company named Kondaur Capital Corporation ("Kondaur"). In October 2009, Kondaur, in turn, assigned the loan to a company called ESA Ventures, LLC ("ESA"). See JA-T 23:15--25:1. On December 18, 2009, ESA filed a proof of claim against Strawbridge's estate, secured by the coop shares and lease, asserting that the amount due on the loan had ballooned to $562,027.28 as a result of nearly a decade in default. See No. 09-17208-mg, Dkt. 78. On March 22, 2010, ESA assigned its secured claim against the estate to appellee Khanamirian. See JA-P at Ex. 6.
Upon his appointment, the Chapter 7 Trustee attempted to gain access to Strawbridge's apartment to assess its value as the estate's primary asset. After several aborted and contentious attempts to access to the apartment, the Trustee and his retained evaluators were granted access in fall 2010 and fixed the apartment's value at approximately $450,000. See JA-M at 4 ¶ 10. Because the amount of the secured claims on the estate-by Khanamirian on the loan, and by East 74 on the maintenance fees the debtor had not paid-exceeded the assessed value of the estate's assets, the Trustee engaged the creditors in settlement discussions to resolve their claims.
Pursuant to those discussions, in June 2011, the Trustee, East 74, and Khanamirian entered into a stipulation whereby the Trustee transferred the co-op shares and lease to Khanamirian in exchange for the release of her claim and $35,000 to the estate (approximately the amount needed to satisfy additional unsecured claims against the estate). See JA-H. Under the stipulation, the co-op shares and lease as transferred to Khanamirian were still to be encumbered by the (then nearly $190,000) secured claim from East 74. Id. In essence, Khanamirian exchanged her claim against the estate for the shares and lease to Strawbridge's coop, but also agreed to make East 74 whole and provide the estate with cash to satisfy its unsecured creditors. Also pursuant to the stipulation, Khanamirian offered Strawbridge $25,000 to voluntarily vacate her apartment; however, in the event Strawbridge chose not to do so, Khanamirian was to turn the $25,000 over to the Trustee to cover the costs of eviction. Id.
On June 9, 2011, the Trustee moved the Bankruptcy Court to approve the stipulation. Id. Strawbridge was the sole objector. Id. On July 13, 2011, the Bankruptcy Court held a hearing on the Trustee's motion and set out its reasons for granting the motion to approve the stipulation. See JA-T. On July 15, 2011, the Order formally approving the stipulation was issued. See JA-R. It is from that Order that Strawbridge now appeals.
On July 27, 2011, Strawbridge timely filed a notice of appeal of the Order. On September 27, 2011, Strawbridge, acting pro se, filed a large submission, styled a "Statement of Issues," but did not file a document specifically identified as an appellant's brief. As a result, appellees never submitted a brief in opposition, and this appeal remained unperfected for nearly three months. In December 2011, the appellees, having seen no movement of Strawbridge's appeal in this Court, sought an order in the Bankruptcy Court permitting them to evict Strawbridge from her apartment. Strawbridge thereupon filed an Order to Show Cause in this Court, seeking to restrain the appellees from evicting her pending resolution of this appeal. In her submission accompanying the Order to Show Cause, Strawbridge requested that her "Statement of Issues" be treated as her appellant's brief. Dkt. 10 at 25.
On January 10, 2012, the Court called the parties to a conference to put this matter back on track. By Order on that date, the Court directed that Strawbridge's "Statement of Issues" be re-docketed as an appellant's brief, that appellees submit briefs in opposition by January 31, 2012, and that Strawbridge file a reply by February 14, 2012. Dkt. 8. The Court also directed the appellees to consult with Strawbridge to compile and submit a Joint Appendix of documents comprising the record on appeal. Id. On January 31, 2012, the appellees submitted an opposition brief, and on February 14, 2012, Strawbridge filed a reply. In the interim, the Bankruptcy Court granted the appellees' motion for an order compelling Strawbridge's eviction, but stayed execution of that order pending resolution of this appeal.
In support of her appeal, Strawbridge makes three principal arguments why the Bankruptcy Court erred in approving the stipulation.*fn2 First, she argues that Khanamirian could not have a valid claim against the bankruptcy estate because (a) Indymac bank sold the loan more than a year before it was put into conservatorship by the FDIC, and therefore the FDIC could not have assigned it to Kondaur; thus, she asserts, any document purporting to transfer the loan from the FDIC to Kondaur, and so on down the line to Khanamirian, must be forged; (b) even if Indymac owned the loan when it was put into conservatorship by the FDIC, the FDIC did not have authority to assign her loan to Kondaur; and (c) Khanamirian's claim based on the loan is time-barred.
Second, she argues that the Trustee has badly undervalued her apartment, and therefore the Trustee's assumption underlying the stipulation-that the secured claims were worth more than the value of the apartment-is incorrect, and the stipulation should not have been approved.
Third, she argues that because the apartment was undervalued, there is equity remaining in the apartment, and an order approving the seizure of the apartment to satisfy her creditors would be unduly harsh. Accordingly, she argues, the use of such a procedure to enforce her financial obligations should not be permitted pursuant to N.Y. C.P.L.R. 5240.
In opposition, the three appellees filed separate briefs, but, collectively, made these arguments in support of affirmance of the Bankruptcy Court's approval of the stipulation: (1) the Bankruptcy Court did not abuse its discretion in approving the stipulation as a valid exercise of the Trustee's business judgment; (2) Strawbridge's appeal should be dismissed under the doctrine of unclean hands because she allegedly altered documents in an attempt to show that her apartment was undervalued by the Trustee; and (3) the chain of title for the loan is unbroken and Khanamirian is, in fact, the successor-in-interest to Indymac. By Order dated February 21, 2012, the Court requested supplemental briefing from the appellees addressing the issue of whether some or all of the payments due on the note are time-barred. See Dkt. 23. On February 29, 2012, the appellees submitted supplemental briefs.*fn3
For the reasons that follow, the Court holds that the Bankruptcy Court did not abuse its discretion in approving the stipulation. Because this ruling does not require the Court to find that Khanamirian is in fact the holder of the loan, the Court does not reach that point. Nor does the Court reach appellees' alternative argument based on unclean hands.