Kraydich et al

Filing 15

ORDER denying 2 Motion to Stay; Dismissing Appeal. Signed by District Judge Victoria A. Roberts. (CPin)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
In Re:
Anthony A. Kraydich and
Patricia E. Kraydich,

CASE NUMBER: 11-12127
HONORABLE VICTORIA A. ROBERTS

Debtors,

Bankruptcy case no: 09-49202-swr

ROBERT HOCK,
Appellant,

v.
MICHAEL A. STEVENSON,
Chapter 7 Trustee
Appellee.
_________________________________/
ORDER

This matter is before the Court on appeal from a bankruptcy court order which (1)
reopened a bankruptcy case, (2) revoked abandonment of real property, (3) denied
Appellant’s objections to the revocation of abandonment, and (4) denied Appellant a
stay pending appeal. (Doc. 2, 4).
Appellant bought the debtor’s property at a foreclosure sale. He currently has a
sheriff’s deed to the property. Under Michigan law, this deed is void if the debtor
redeems the property as set out by statute. See MCL 600.3240. If the debtor redeems,
the Appellant receives the amount he paid for the property at auction plus interest. If
the debtor does not redeem, Appellant owns the property.
Before the foreclosure sale, the debtor filed for bankruptcy. However, his

bankruptcy case was closed and the property was released from the bankruptcy estate
before the foreclosure. Thus, at the time of the foreclosure sale, the debtor had no
active or open bankruptcy proceedings, and the property was owned by the debtor, not
the bankruptcy estate. However, after the property sold at the foreclosure sale for well
below the market value, the trustee asked to reopen the bankruptcy case and pull the
property back into the bankruptcy estate. No parties objected, including the debtor or
his creditors, except the Appellant. The bankruptcy court overruled Appellant’s
objections and granted the trustee’s request. Appellant challenges these rulings.
Appellant asks the Court for a stay pending appeal so that the property cannot be
redeemed and sold by the trustee before the appeal is litigated. For the reasons
already stated on the record by the bankruptcy court, the appeal is likely to fail.
Therefore, Appellant’s motion to stay is DENIED.
Moreover, because the Appellant has no standing to bring this appeal, it is
DISMISSED in its entirety.
Article III standing requires: (1) injury in fact, which is (a) concrete and
particularized and (b) actual or imminent, not conjectural or hypothetical; (2) a causal
connection between the injury and the conduct; and (3) redressability. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561-62 (1992). Standing is “an indispensable part
of the plaintiff’s case, [so] each element must be supported in the same way as any
other matter on the which the plaintiff bears the burden of proof, i.e., with the manner
and degree of evidence required at the successive stages of litigation.” Id. “The party
invoking federal jurisdiction bears the burden of establishing these elements.” Id.
Moreover, bankruptcy appellate standing is even “more limited than Article III

standing.” Moran v. LTV Steel Co., Inc., 560 F.3d 449, 452-53 (6th Cir. 2009). A party
has bankruptcy appellate standing only if “that party is directly and adversely affected
pecuniarily by the order.” Id.
The Court agrees with the bankruptcy court’s observation that purchasers of
foreclosed properties generally have no standing to challenge a revocation of
abandonment, but clarifies that Appellant fails to establish standing because he fails to
show the bankruptcy court orders caused him injury.
Although the bankruptcy court reopened the bankruptcy case and returned the
property to the bankruptcy estate, Appellant’s deed and rights remain the same. The
only difference is the trustee can redeem the property instead of the debtor. While
Appellant may be correct that the trustee is more likely to redeem the property than the
debtor, this does not change the fact that Appellant was aware of the risk of redemption
when he bought the property. Appellant is in the same position he was in before the
trustee stepped into the shoes of the debtor. No matter who has the right to redeem,
Appellant knew redemption was a risk, and, that if it occurred, he would not be able to
sell the property to make a profit. Moreover, it is pure speculation that Appellant would
make a profit at all if the property is not redeemed. The supposed increased risk that
Appellant might not realize a speculative profit is insufficient to show an economic injury
that confers standing in this instance.
Appellant fails to carry his burden to show injury; the appeal is dismissed.
IT IS ORDERED.

Dated: June 2, 2011

S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge

The undersigned certifies that a copy of
this document was served on the
attorneys of record and Bankruptcy Court
by electronic means or U.S. Mail on June
2, 2011.
s/Carol A. Pinegar
Deputy Clerk