In Re: Pier 39 LLC Bankruptcy of

Filing 9

FINAL ORDER ON BANKRUPTCY APPEAL re 1 Bankruptcy Appeal Court Case 11-33733, filed by Pier 39 LLC AFFIRMING the decision of the bankruptcy court. Signed by Judge Joseph S Van Bokkelen on 5/2/12. (smp) Modified on 5/3/2012- (Copy to Judge Dees chambers via e-mail) (smp).

United States District Court
Northern District of Indiana
IN THE MATTER OF: PIER 39 LLC,
Debtor-Appellant,

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Appeal from the United States
Bankruptcy Court, Northern District
of Indiana, South Bend Division
District Court Case No. 3:11-CV-493 JVB
Bankruptcy Case No. 11-33733

OPINION AND ORDER
Debtor Pier 39 LLC is appealing a bankruptcy court order dismissing its Chapter 11 case.
For the reasons set forth below, the decision of the bankruptcy court is AFFIRMED.

A.

Background
On October 12, 2010, Pier 39 filed a voluntary bankruptcy under Chapter 11 of the

Bankruptcy Code, Bankruptcy Case No. 10-34860 (the “2010 Case”). Pier 39’s only scheduled
asset was real estate located at 10351 State Road 39, LaPorte, Indiana. The only scheduled debts
were the to the following debtors: Bayview Loan Servicing LLC in the amount of $519,066.41;
Fifth Third Bank for $1,419,944.30; and First State Bank of Middlebury for an unknown
amount.
On April 4, 2011, the United States Trustee filed a motion to dismiss or convert the 2010
Case from a Chapter 11 to a Chapter 7 case, which Pier 39 opposed. The bankruptcy court
granted the motion to convert on August 3, 2011, and later denied a motion to reconsider its
ruling. The Chapter 7 case remains pending. J. Richard Ransel, the Appellee in this case, was
appointed trustee of the 2010 case and is administering it. Next, on September 27, 2011, Pier 39

filed this Chapter 11 case (the “2011 Case”), listing the same asset and the same debts as it did in
the 2010 Case. The bankruptcy court issued an order to Pier 39 to show cause why the 2011
case should not be dismissed, because of the pendency of the 2010 case. The bankruptcy court
held a hearing on October 25, 2011, and dismissed the case. The transcript of the hearing shows
that the bankruptcy court’s dismissal was based on In re Sidebottom, 430 F.3d 893 (7th Cir.
2005). This appeal followed.

B.

Standard of Review
A district court reviews bankruptcy court findings of fact for clear error; conclusions of

law are reviewed de novo. In re Midway Airlines Inc., 383 F.3d 663, 668 (7th Cir. 2004).

C.

Discussion
There is general agreement that a debtor may not maintain two concurrent actions with

respect to the same debts. In re Sidebottom, 430 F.3d at 898. The Bankruptcy Code is designed
to resolve a debtor’s financial affairs by administration of a debtor’s property as a single estate
under a single chapter within the code. Id. While Sidebottom dealt with simultaneous Chapter 7
and Chapter 13 cases, the Court sees no reason for a different result with regard to simultaneous
Chapter 7 and Chapter 11 cases. Here, it is undisputed that the Chapter 7 and Chapter 11 cases
involve the same debts. Just as in Sidebottom, allowing Pier 39 to proceed with the Chapter 11
case significantly affects the Chapter 7 trustee’s ability to administer the estate. Moreover, a
debtor should not be permitted to circumvent a conversion order by filing a new Chapter 11 case.
The appropriate means of challenging the conversion of the 2010 case was to appeal the

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bankruptcy court’s decision in that case.

D.

Conclusion
The decision of the bankruptcy court dismissing Bankruptcy Court Case No. 11-33733 is

AFFIRMED.
SO ORDERED on May 2, 2012.

s/ Joseph S. Van Bokkelen
Joseph S. Van Bokkelen
United States District Judge
Hammond Division

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