United States District Court, S.D. New York
In re TERRESTAR CORPORATION, et al., Debtor.
TERRESTAR CORPORATION, et al., Defendants-Appellee. ALDO ISMAEL PEREZ, Plaintiff-Appellant,
OPINION AND ORDER
Edgardo Ramos, U.S.D.J.
Ismael Perez (“Appellant”), acting pro se,
appeals from a January 15, 2016 order of the United States
Bankruptcy Court for the Southern District of New York (the
“January Order”). (No. 13-01334 (SHL) Adversary
Proceeding (“Adv. Proc.”), Doc. 45). The January
15, 2016 Order denied Appellant's Motion for
Reconsideration of the bankruptcy court's order entered
on September 29, 2015, which dismissed the Appellant's
action (the “September Order”). (Adv. Proc., Doc.
40). TerreStar Corporation (“TSC”) and its
affiliated debtors(collectively, “Appellees”)
moved in response to the appeal.
reasons set for below, the Appellant's appeal is
DISMISSED and the bankruptcy court's decision is
The Bankruptcy Court Proceedings
held equity interests in several companies that operated a
terrestrial satellite network and provided two-way mobile and
Internet communications services. September Order at 1. One
such company was TerreStar Networks Inc (“TSN”),
which, along with certain of its affiliates, filed a Chapter
11 bankruptcy on October 19, 2010. In re TerreStar
Networks Inc., et al. Case No. 10-15446 (SHL). On
February 16, 2011, TSC and certain of its affiliates also
filed a voluntary petition for Chapter 11 bankruptcy in the
Southern District of New York. September Order at 1. At the
time of TSC's bankruptcy filing, its only asset was the
1.4 GHz spectrum. Sec. Am. Compl. (“SAC”) at
February 16, 2011, Appellant owned approximately 220, 000
shares of TSC's common stock. September Order at 1. Based
on this equity interest, Appellant filed numerous motions and
objections throughout Appellees' bankruptcy proceedings.
For example, he requested appointment of an equity committee
and/or an examiner, filed numerous objections to the
Appellees' second amended disclosure statement, and
requested a stay of the order approving that disclosure
statement pending appeal. Id. at 1-2. All of these
requests were denied by the bankruptcy court. Id.
27, 2012, Appellees filed the third iteration of its plan of
reorganization (the “Plan”). Id. at 2.
Appellant filed multiple objections to the Plan including,
among others, objections to the failure to auction off
certain of the Debtors' assets, questions regarding
Debtors' assert valuation and feasibility of the Plan,
and objections to the third-party releases in the Plan.
Id. The bankruptcy court conducted a hearing on the
confirmation of the Plan on October 10, 2012 during which
Appellant appeared and argued against confirmation.
Id. The bankruptcy court overruled Appellant's
objections. Id. On October 24, 2012, the bankruptcy
court entered an order confirming the Plan (the
“Confirmation Order”), and the Plan subsequently
became effective on March 7, 2013. Id. at 2-3.
has appealed two other orders of the bankruptcy court to the
Southern District of New York prior to the instant appeal. On
December 29, 2011, Appellant appealed the bankruptcy
court's denial of an appointment of an examiner. In
re TerreStar Corp., No. 12 Civ. 857 (RA), 2013 WL
1767068, at *3 (S.D.N.Y. Apr. 24, 2013) (“TerreStar
I”). On April 24, 2013, Judge Abrams dismissed the
appeal as equitably moot. Id. at *1. On January 25,
2013, Appellant appealed the bankruptcy court's
Confirmation Order. In re TerreStar Corp., No. 13
Civ. 562 (GBD), 2013 WL 4477037, at *2 (S.D.N.Y. Aug. 16,
2013) (“TerreStar II”). Judge Daniels
also dismissed the appeal as equitably moot on August 16,
2013. Id. at *1.
instant appeal arises from Appellant's adversary
complaint that was originally filed on April 22, 2013, the
180th day after the Confirmation Order was
entered, seeking to revoke the Confirmation Order pursuant to
Section 1144 of the Bankruptcy Code. September Order at 3. On
May 15, 2014, Appellant filed a Second Amended Complaint
which alleges that Appellees fabricated and/or concealed
certain facts, such as their principal place of business and
valuation of assets during the bankruptcy, the truth of which
would have affected confirmation of the Plan. (Adv. Proc.,
Doc. 18-03). On August 7, 2014, Appellees filed a motion to
dismiss the SAC, arguing that it was equitably moot, that
Appellant was collaterally estopped from raising allegations
that had already been addressed in earlier proceedings, and
that he had failed to adequately plead that the Confirmation
Plan was procured by fraud under Section 1144. (Adv. Proc.,
Doc. 21). The bankruptcy court dismissed the SAC on September
29, 2015, finding that it was equitably moot, did not satisfy
Section 1144 requirements, and was barred by res
judicata. (Adv. Proc., Doc. 40).
October 13, 2015, Appellant filed a Motion to Reconsider the
September Order. (Adv. Proc., Doc. 41). The bankruptcy court
denied that motion on January 15, 2016, finding that
Appellant failed to satisfy the standard for relief under
either Federal Rules of Civil Procedure 59(e) or 60(b). (Adv.
Proc., Doc. 45). On February 24, 2016, Appellant filed a
Notice of Appeal of the January Order to this Court, (Doc.
1), and filed his appeal brief on July 21, 2016, (Doc. 10).
The Appellees filed their response on August 22, 2016, which
asserts that the bankruptcy court correctly found equitable
mootness, and that Appellant fails to meet the statutory
requirements of Section 1144. (Doc. 11). On November 1, 2016,
Appellant filed his reply. (Doc. 15).
Standard of Review
Court has jurisdiction to hear appeals from decisions of a
bankruptcy court pursuant to 28 U.S.C. § 158(a), which
provides in relevant part that “[t]he district courts
of the United States shall have jurisdiction to hear appeals
. . . from final judgments, orders, and decrees; . . . [and,
] with leave of the court, from other interlocutory orders
and decrees . . . of bankruptcy judges.” 28 U.S.C.
§ 158(a)(1), (3). A district court reviews a bankruptcy
court's conclusions of law de novo and its
findings of fact for clear error. See, e.g., In
re Ionosphere Clubs, Inc., 922 F.2d 984, 98 (2d Cir.
1990). A bankruptcy court's discretionary decisions are
reviewed for abuse of discretion. See, e.g., In re
Boodrow, 126 F.3d 43, 47 (2d Cir.1997).
reviewing a decision of a bankruptcy court, the district
court “may affirm on any ground that finds support in
the record, and need not limit its review to the bases raised
or relied upon in the decision [ ] below.” Freeman
v. Journal Register Co., 452 B.R. 367, 369 (S.D.N.Y.
2010). But the district court may not consider evidence
outside the record. See In re Bear Stearns
High-Grade Structured Credit Strategies Master Fund,
Ltd., 389 B.R. 325, 339 (S.D.N.Y. 2008). Any arguments
not raised in the bankruptcy court are considered waived;
unless such a waiver results in manifest injustice, the new
arguments will not be considered on appeal. See
In re Lionel Corp., 29 F.3d 88, 92 (2d Cir. 1994);
see also, e.g., In re Barquet Grp., Inc.,
486 B.R. 68, 73 n. 3 (S.D.N.Y. 2012) (citing In re Enron
Corp., 419 F.3d 115, 126 (2d Cir. 2005).
argues that the bankruptcy court erred in finding on a motion
to dismiss that his action to revoke the Confirmation Plan
under Section 1144 was equitably moot. He argues that whether
a claim is equitably moot is a question for summary judgment,
not for a motion to dismiss. Appellant's Br. at 36. He
also asserts that the equitable mootness doctrine was
improperly applied by the bankruptcy court to an action
seeking revocation of a confirmation order under Section 1144
because it is primarily a doctrine for a district court to
dismiss bankruptcy appeals. Id. at 36-37. Regardless
of whether the bankruptcy court had erred in applying the
equitable mootness doctrine, it is undisputed that
this Court is able to dismiss the instant appeal on
mootness is a prudential doctrine under which a district
court may dismiss a bankruptcy appeal “when, even
though effective relief could conceivably be fashioned,
implementation of that relief would be inequitable.”
In re Chateaugay Corp., 988 F.2d 322, 325 (2d Cir.
1993) (citations omitted). Equitable mootness is a
“pragmatic” doctrine that is “grounded in
the notion that, with the passage of time after a judgment in
equity and implementation of that judgment, effective relief
on appeal becomes impractical, imprudent, and therefore
inequitable.” In re Metromedia Fiber Network,
Inc., 416 F.3d 136, 144 (2d Cir. 2005) (quoting MAC
Panel Co. v. Va. Panel Corp., 283 F.3d 622, 625 (4th
Cir. 2002)). The doctrine “requires the district court
to carefully balance the importance of finality in bankruptcy
proceedings against the appellant's right to review and
relief.” In re Charter Commc'ns, Inc., ...