FILED
NOT FOR PUBLICATION AUG 26 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In the Matter of: BLX GROUP, INC., No. 13-35122
Debtor, D.C. No. 2:12-cv-00042-SEH
TIMOTHY L. BLIXSETH, MEMORANDUM*
Appellant,
v.
CARL A. EKLUND, Esquire, Chapter 11
Trustee of BLX Group, Inc.,
Appellee.
Appeal from the United States District Court
for the District of Montana
Sam E. Haddon, District Judge, Presiding
Argued and Submitted August 5, 2014
Pasadena, California
Before: KOZINSKI, Chief Judge, and PAEZ and BERZON, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Appellant Timothy L. Blixseth appeals the district court’s order dismissing
his appeal of the bankruptcy court’s order confirming the Modified Third
Amended Plan of Liquidation (“the Plan”) for the BLX Group, Inc. Bankruptcy
Estate (“the Estate”). We affirm the dismissal of the appeal.
(1) An appellant must notice an appeal of a final bankruptcy court order
within fourteen days of the order’s entry. Fed. R. Bankr. P. 8002(a). A bankruptcy
court order is final where it “(1) ‘finally determines the discrete issue to which it is
addressed,’ and (2) ‘resolves and seriously affects substantive rights.’” Duckor
Spradling & Metzger v. Baum Trust (In re P.R.T.C., Inc.), 177 F.3d 774, 780 (9th
Cir. 1999) (quoting Elliott v. Four Seasons Props. (In re Frontier Props., Inc.),
979 F.2d 1358, 1363 (9th Cir. 1992)). Applying this two-prong test, P.R.T.C. held
that an order assigning a debtor’s legal claims against a third party to its largest
creditor was “final.” See id. at 776–77, 780.
The August 30, 2011 Assignment Order transferring the Estate’s legal
claims against Blixseth to the Yellowstone Club Liquidating Trust (“YCLT”) was
likewise “final.” See id. at 780. That order expressly declared the assignment “in
full force and effect notwithstanding confirmation of any plan of reorganization or
liquidation, or any dismissal or conversion of this proceeding to a proceeding
under Chapter 7 of the Bankruptcy Code.” Under the first P.R.T.C. prong, that
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language “finally assigned the assets,” i.e. the claims, to YCLT, because, even
though the bankruptcy court retained jurisdiction over the Estate’s assets, it
“lack[ed] discretion . . . to alter the scope of the assignment.” See id.
Additionally, under the second P.R.T.C. prong, the Assignment Order
“seriously affected the rights of all creditors . . . to receive payment for their
claims.” See id. The claims were a significant Estate asset. If YCLT is not able to
recover on these claims, the Estate’s creditors may never receive meaningful
distributions. See id.
Blixseth did not appeal the August 30, 2011 Assignment Order; he appealed
only the March 12, 2012 Confirmation Order. Because the August 30, 2011
Assignment Order was final under P.R.T.C. and no appeal of that order was
noticed, Blixseth’s assignments of error to that order are not reviewable here. See
In re P.R.T.C., 177 F.3d at 780.
(2) The district court properly concluded that Blixseth does not have
appellate standing with regard to the order he did appeal, the Confirmation Order,
because he was not a “person aggrieved” by that order. See Motor Vehicle
Casualty Co. v. Thorpe Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d 869,
884 (9th Cir. 2012). The March 12, 2012 Confirmation Order did not assign the
claims to YCLT; it only approved the Plan, which incorporated the final
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Assignment Order by reference. Blixseth repeatedly disclaimed being a creditor of
the Estate. He is thus at most a defendant in an adversary proceeding, and lacks
appellate standing to challenge the Plan in that capacity. See Fondiller v.
Robertson (In re Fondiller), 707 F.2d 441, 443 (9th Cir. 1983).
Moreover, contrary to what Blixseth asserted at oral argument before this
Court, in the adversary proceeding, Blixseth could and did defend against YCLT’s
claims on the grounds that BLX had not validly assigned them to YCLT, and
obtained a ruling on the merits of that argument, albeit an adverse one.
(3) Finally, Blixseth lacks appellate standing with regard to the
exculpation clause in the Plan. Unlike in Blixseth v. Yellowstone Mountain Club,
LLC, et al., No. 13-35190, the clause in the BLX Plan is narrow both in its
temporal scope and the persons it covers. Blixseth has not shown that he is
“directly and adversely affected” by it in any way, as he has not pointed to any
action he has or might affirmatively bring that would be barred by the clause. See
Thorpe, 677 F.3d at 884. Any contractual claims for attorney’s fees Blixseth might
bring would plainly be outside the scope of the exculpation clause. The district
court therefore properly held Blixseth lacked appellate standing with regard to the
exculpation clause in the Plan.
AFFIRMED.
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