United States District Court, S.D. New York
In re OLYMPIC PROPERTY PARTNERS, LLC, Alleged Debtor.
OLYMPIC PROPERTY PARTNERS, LLC, Appellee. CONCRETE CAPITAL, LLC, Appellant,
Douglas J. Pick, Esq. Pick & Zabicki LLP New York, NY
Counsel for Appellant.
E. Silverman, Esq. Silverman & Sardar LLP New York, NY
Counsel for Alleged Debtor-Appellee.
OPINION & ORDER
KENNETH M. KARAS, District Judge.
Capital, LLC (“Concrete”) appeals from the
“Order Pursuant to 11 U.S.C. §§ 303 and 305
(I) Granting Dismissal (II) Awarding Fees and Costs but
Reserving Decision on Amount of Same and (III) Reserving
Further Decision on Damages under 11 U.S.C. §
303(I)(2)” (“Bankruptcy Order”), entered in
the United States Bankruptcy Court for the Southern District
of New York by United States Bankruptcy Judge Robert D.
Drain. (See Not. of Appeal (Dkt. No.
More specifically, Concrete challenges the part of the
Bankruptcy Order holding that Olympic Property Partners, LLC
(“Olympic”) is entitled to attorney's fees
and costs pursuant to 11 U.S.C. § 303(i)(1), and
permitting Olympic to seek damages under 11 U.S.C. §
303(i)(2). Concrete contends that the bankruptcy court erred
in its interpretation of § 303(i). For the reasons given
herein, Concrete's appeal is dismissed because the Court
lacks jurisdiction to hear it.
Factual and Procedural Background
November 19, 2015, Concrete filed an Involuntary Petition
(the “Petition”) pursuant to 11 U.S.C. § 303
with the bankruptcy court, seeking the entry of an order
against Olympic under chapter 11 of the Bankruptcy Code.
(Bankr. Dkt. No. 1.) Concrete sought relief in the bankruptcy
court because Olympic allegedly failed to repay a series of
loans it received from Concrete. The facts giving rise to the
underlying dispute are not relevant for purposes of this
December 14, 2015, Olympic filed a motion to dismiss the
Petition, (Bankr. Dkt. No. 8), arguing that the requirements
of § 303 were not met, (see Olympic Mem. of Law
in Supp. of Mot. To Dismiss Petition 13-31 (Bankr. Dkt. No.
12)). Olympic also sought an award of attorney's fees and
costs that it expended litigating the allegedly improperly
filed Petition, and damages. (Id. at 40-44.) In
opposition to Olympic's motion to dismiss, Concrete filed
a “Statement” consenting to the dismissal of the
Petition. (Concrete Statement in Opp'n to Mot. To Dismiss
Petition ¶¶ 1-2 (Bankr. Dkt. No. 22).) Concrete
stood by the merits of the Petition, but “as a result
of weighing . . . the potential costs, risks[, ] and rewards
associated with continued litigation, ” decided to
consent to Olympic's motion. (Id. ¶ 1.)
Concrete explained that it attempted to negotiate a
consensual dismissal with Olympic, but Olympic would not
consent without the inclusion of certain conditions and
limitations. (Id. at 2 n.1.) It did argue, however,
that Olympic's request for attorney's fees, costs,
and damages should be denied. (Id. ¶ 2.)
Olympic filed a reply memorandum “consent[ing] to that
portion of [Concrete's] Statement that consents to and
seeks dismissal . . . of its Involuntary Petition; but . . .
d[id] not waive the right to judgement [sic] under 11 U.S.C.
§ 303(i).” (Olympic Reply Mem. of Law in Supp. of
Mot. To Dismiss Petition ¶ 1 (Bankr. Dkt. No. 26).)
January 25, 2016, the bankruptcy court held oral argument on
Olympic's motion to dismiss the Petition. Both Parties
agreed that the Petition should be dismissed. (See
Hr'g Tr. (“Tr.”) 11 (Bankr. Dkt. No. 33).)
The question then became whether Olympic was entitled to
attorney's fees and/or damages. Under 11 U.S.C. §
303(i), “if the court dismisses a petition under this
section other than on consent of all petitioners and the
debtor, and if the debtor does not waive the right to
judgment under this subsection, the court may grant judgment
. . . against the petitioners and in favor of the debtor
for” costs, attorney's fees, and, under certain
circumstances, damages. The bankruptcy court held that the
type of consent envisioned by § 303(i) did not occur in
this case. (Tr. 31.) Citing In re City Center Complex,
LLC, No. 10-20820, 2012 Bankr. LEXIS 6205 (Bankr. N.D.
Ind. Feb. 28, 2012), In re Express Car & Truck
Rental, Inc., 440 B.R. 422 (Bankr. E.D. Pa. 2010), and
In re Kelton Motors, Inc., 121 B.R. 166 (Bankr. D.
Vt. 1990), the bankruptcy court explained that because
Olympic moved to dismiss the Petition before Concrete agreed
to withdraw it, Olympic did not “consent” to the
dismissal, (Tr. 31 (“[I]t doesn't really sound like
this is consent by the debtor since the debtor had to move to
dismiss before [Concrete] was persuaded to agree with that.
It doesn't seem to me to be the type of consent that
[§] 303(i) is referring to.”); see also
Id. at 32 (“Right, and [Olympic] moved first, so I
don't see that as being consent. They moved to
dismiss.”)). The bankruptcy court acknowledged that
other courts have interpreted the meaning of
“consent” differently, but pointed out that the
majority of courts agreed with its interpretation of §
303(i). (See Id. at 31 (“I understand that
[there] are cases that go the other way, but there certainly
wasn't consent when [Olympic] moved to dismiss.”);
id. at 41 (noting that the majority of courts would
hold that Olympic did not consent to the dismissal).)
Therefore, the bankruptcy court held that Olympic was
entitled to the attorney's fees and costs it incurred in
opposing the Petition. (Id. at 44.) It also granted
Olympic leave to file a motion for damages under §
303(i)(2). (Id. at 44-45.)
January 26, 2016, the bankruptcy court entered the Bankruptcy
Order, which granted Olympic's motion to dismiss,
dismissed the Petition, awarded Olympic its reasonable fees
and costs, and granted Olympic leave to seek damages under
§ 303(i)(2). (“Order Pursuant to 11 U.S.C.
§§ 303 and 305 (I) Granting Dismissal (II) Awarding
Fees and Costs but Reserving Decision on Amount of Same and
(III) Reserving Further Decision on Damages under 11 U.S.C.
§ 303(I)(2)” (“Bankr. Order”) (Bankr.
Dkt. No. 28).) Concrete filed a notice of appeal on February
4, 2016. (Bankr. Dkt. No. 29.) The following day, Olympic
filed a notice of its intent to seek damages under §
303(i)(2). (Bankr. Dkt. No. 32.) On February 19, 2016,
Olympic filed a “Statement, ” arguing that this
Court could not hear Concrete's appeal because the
Bankruptcy Order is not a final order. (Bankr. Dkt. No. 34.)
filed its appellate brief on April 4, 2016. (Dkt. No. 8.)
Olympic filed responsive papers on May 4, 2016. (Dkt. No.
Standard of Review
district court reviews a bankruptcy court's findings of
fact for clear error and reviews conclusions of law de novo.
See In re Bayshore Wire Prods. Corp., 209 F.3d 100,
103 (2d Cir. 2000) (“Like the [d]istrict [c]ourt, we
review the [b]ankruptcy [c]ourt's findings of fact for
clear error, [and] its conclusions of law de novo . . .
.” (citation and italics omitted)); In re Enron
Corp., 307 B.R. 372, 378 (S.D.N.Y. 2004) (“A
bankruptcy court's conclusions of law are reviewed de
novo and its findings of fact for clear error.”