15‐3172‐bk
In re: Licata
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE
OF APPELLATE PROCEDURE 32.1 AND THIS COURTʹS LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE
FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION ʺSUMMARY ORDERʺ). A
PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED
BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second
Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in
the City of New York, on the 2nd day of September, two thousand sixteen.
PRESENT: JOHN M. WALKER, JR.,
DENNY CHIN,
RAYMOND J. LOHIER, JR.,
Circuit Judges.
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
IN RE: JAMES J. LICATA,
Debtor.
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
JAMES J. LICATA,
Debtor‐Appellant,
v. 15‐3172‐bk
RICHARD M. COAN, Chapter 7 Trustee, RONALD I.
CHORCHES, Chapter 7 Trustee,
Trustees‐Appellees,
RECLAIMED HOLDINGS, LLC,
Intervenor.
‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐x
FOR DEBTOR‐APPELLANT: JOHN F. CARBERRY, Cummings & Lockwood
LLC, Stamford, Connecticut.
FOR TRUSTEE‐APPELLEE TIMOTHY D. MILTENBERGER, Coan,
RICHARD M. COAN: Lewendon, Gulliver & Miltenberger, LLC,
New Haven, Connecticut.
FOR TRUSTEE‐APPELLEE DAVID T. AUSTIN, Law Offices of Ronald I.
RONALD I. CHORCHES: Chorches, LLC, Wethersfield, Connecticut.
Appeal from the United States District Court for the District of
Connecticut (Shea, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.
Debtor‐appellant James J. Licata appeals from the district courtʹs
September 23, 2015 judgment dismissing his appeal from an order of the United States
Bankruptcy Court for the District of Connecticut (Shiff, B.J.) entered October 9, 2014,
approving the settlement of certain disputed claims. The bankruptcy court found that
Licata lacked standing to challenge the settlement because he failed to demonstrate a
pecuniary interest in the estate. On appeal, the district court held that the bankruptcy
court’s findings were not clearly erroneous and that consequently Licata lacked
standing to challenge the settlement. We assume the partiesʹ familiarity with the
underlying facts and procedural history.
Licata principally challenges the bankruptcy courtʹs conclusion that he
lacked standing to oppose the bankruptcy settlement. ʺThe rulings of a district court
‐ 2 ‐
acting as an appellate court in a bankruptcy case are subject to plenary review.ʺ In re
Stoltz, 315 F.3d 80, 87 (2d Cir. 2002). Consequently, we ʺindependently review[] the
bankruptcy courtʹs factual findings for clear error and its legal conclusions de novo.ʺ In
re Quebecor World (USA) Inc., 719 F.3d 94, 97 (2d Cir. 2013).
A Chapter 7 debtor has standing to object to a sale of the assets ʺonly if
there could be a surplus after all creditorsʹ claims are paid.ʺ In re 60 East 80th St.
Equities, Inc., 218 F.3d 109, 115 (2d Cir. 2000). To establish standing, the Chapter 7
debtor has the burden of showing that there is at least a reasonable possibility of a
surplus. See id. at 115‐16. A bankruptcy courtʹs finding that a reasonable possibility of a
surplus does not exist is a finding of fact reviewed for clear error. See id. at 116.
The bankruptcy court found that Licata did not have standing because he
failed to show that there was a reasonable possibility that there could be a surplus after
the estate paid the $120 million in unsecured claims.1 Special App. at 29 (ʺThere is
nothing in the record to suggest that the sale of the Assets will generate enough money
to satisfy those claims.ʺ). The bankruptcy court did not clearly err in finding that there
was no reasonable possibility of a surplus.
To prove a reasonable possibility of a surplus, Licata relied on a one‐page
letter submitted to the bankruptcy court by a New Jersey real‐estate firm, which opined
1 The district court noted that there were $200 million in claims against the
Licata estate to which no objection was made. Whether it was $120 million or $200 million in
claims, there were not enough assets to result in a surplus.
‐ 3 ‐
that the disputed assets had a value in excess of $1 billion. This valuation, however, is
belied by the actual, substantially lower offers for the same property spanning a period
of many years. Between 2006 and 2013, the bankruptcy court conducted auctions on
three separate occasions to sell the assets. The highest offer to be received as part of an
option contract was $12.6 million. And even this transaction did not close, as ultimately
the purchaser did not exercise its option to purchase the assets.
We note also that the letter was not sworn to and that the record is silent
as to the qualifications of the author to make such an assessment. The bankruptcy court
did not abuse its discretion in concluding that the letter ʺwas both vague and of
insignificant probative value.ʺ Special App. at 29. Accordingly, the bankruptcy court
did not err in holding that Licata lacked standing.
We have considered all of appellantʹs additional arguments and find them
to be without merit. For the reasons stated herein, the judgment of the district court is
AFFIRMED.
FOR THE COURT:
Catherine OʹHagan Wolfe, Clerk
‐ 4 ‐