In Re: Kollel Mateh Efraim, LLC
Filing
13
ORDER AND OPINION: For the reasons above, the Bankruptcy Court's Orders dated August 18, 2009, September 21, 2010, and October 12, 2010 are AFFIRMED in their entirety. Helen-May's appeal in this action is hereby DISMISSED. The Clerk of Court is DIRECTED to close the docket in this case. (Signed by Judge Deborah A. Batts on 8/2/2011) (jfe)
USDCSDNY
DOCUME1'.T
ELECfRONICALLY'FILED
If DOC #:
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------X
In re:
KOLLEL MATEH EFRAIM, LLC,
a/k/a MATEH EPHRAIM LLC, a/k/a
KOLEL MATEH EFRAIM
L:~~;!2~~=-~ :)2
10-CV-9031 (DAB)
ORDER and OPINION
Chapter 7
Bankruptcy Court
Case No. 04-16410
Debtor,
---------------------------------------x
HELEN-MAY HOLDINGS, LLC, and
IRENE GRIFFIN,
Appellants,
Bankruptcy Court
Adv. Pro. No. 04-04545
-againstROBERT L. GELTZER, as Chapter 7 Trustee
Of the Estate of the Debtor KOLLEL MATEH
EFRAIM, LLC, a/k/a MATEH EPHRAIM LLC,
a/k/a KOLEL MATEH EFRAIM,
Appellee,
---------------------------------------X
HELEN-MAY HOLDINGS, LLC, and
IRENE GRIFFIN,
Appellants,
Bankruptcy Court
Adv. Pro. No. 08-01265
-againstJACK LEFKOWITZ and ABRAHAM STEINWURZEL,
Appellees.
---------------------------------------X
DEBORAH A. BATTS, United States District Judge.
Pursuant to 20 U.S.C. § 158(a) and Rules 8013, 8001{a) and
8002{a) of the Federal Rules of Bankruptcy Procedure, Appellant
1
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Helen-May appeals the orders of the United States Bankruptcy
Court for the Southern District of New York (the uBankruptcy
Court U) dated August 18, 2009, September 21, 2010, and October
12, 2010.
Prior to the October 12, 2010 Order, Helen-May and
the bankruptcy trustee entered into a settlement.
As was their
right, fiduciary defendants - also the appellees here - Jack
Lefkowitz and Abraham Steinwurzel (the uAppel1ees U), objected to
the settlement.
In its October 12, 2010 Order, the Bankruptcy
Court considered the objections, and ultimately set Helen-May's
administrative claim under 11 U.S.C.
§
503(b) (1) (A) at zero
because Helen-May failed to meet its burden of proof and
demonstrate entitlement to an administrative claim.
For the
reasons below, the Bankruptcy Court's Orders dated August 18,
2009, September 21, 2010, and October 12, 2010 are AFFIRMED in
their entirety.
I. BACKGROUND 1
Appellant Helen-May entered into a contract (the
"ContractU) to sell real property in Sullivan County, New York
(the "Property") to Aron Fixler on April 29, 2004 for
$1,400,000.
(AE A.)
The Property consists of a resort hotel on
1
The factual summary here is derived primarily from the
following documents: Appellant's exhibits (UAE"); the Bankruptcy
Court Orders dated August 10, 2007, August 19, 2009, September
21, 2010, and October 12, 2010; and the trial transcript In re
Kollel Mateh Efraim, Case No. 04-16410, March 10, 2010 ("Tr.
March 10, 2010 U ) .
2
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60 to 77 acres. In re Kollel Mateh Efraim, Case No. 04-16410,
2010 Bankr. Lexis 3197, at
*
3 (Bankr. S.D.N.Y. sept. 21, 2010).
Fixler then assigned the Contract to Kollel Mateh Efraim ("the
Debtor").
(AE B.)
Helen-May and Debtor subsequently entered into an
"Occupancy Agreement" dated June 3, 2004.
In the Occupancy
Agreement, Helen-May granted Debtor the right to occupy and
operate the Property until the (extended) closing date of
September 27, 2004. In re Kollel Mateh Efraim, Case No. 04
16410, 2009 Bankr. Lexis 2236, at
18, 2009).
* 3-4 (Bankr. S.D.N.Y. Aug.
The occupancy Agreement stipulated that if the
Debtor failed to close on September 27, 2004, Helen-May would be
entitled to $1,500 a day for each day the Debtor continued to
occupy the Property (the "Daily Penalty"). Id.
Helen-May and the Debtor failed to close, but the parties
extended the closing date to November 29, 2004. Id. at
*
4.
The
extension required the Debtor to make payments aggregating
$40,500, but did not nullify the Daily Penalty stipulated in the
Occupancy Agreement.
(AE D.)
On October 4, 2004, the Debtor
filed for Chapter 11 bankruptcy. In re Kollel Mateh Efraim, 2009
Bankr. Lexis 2236, at * 4.
Following numerous hearings and
settlements not pertinent to this appeal, Bankruptcy Judge
3
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Bernstein, relying on expert testimony from Gene Barbanti2, a
real estate broker and consultant, awarded Helen-Maya judgment
of $245,779 as adequate protection. In re Kollel Mateh Efraim,
Case No. 04-16410, BC 07.0163, Order and Judgment (Bankr.
S.D.N.Y. Aug. 10, 2007). The Bankruptcy Court determined
adequate protection based on Barbanti's testimony that "an
investor would expect at least a 10% return on his money."
The
Bankruptcy Court concluded that the reasonable annual rental
value of the Property is $140,000. In re Kollel Mateh Efraim,
2009 Bankr. Lexis 2236, at * 8.
On October 25, 2007, the Bankruptcy Court converted
Debtor's Chapter 11 case into a Chapter 7 case and appointed
Robert L. Geltzer as Trustee (the "Trustee"). In re Kollel Mateh
Efraim, 2010 Bankr. Lexis 3197, at * 7.
Helen-May and the
Trustee then entered into a settlement, which was later modified
by a second settlement. Id. at
*
7-9.
The second settlement
recognized Helen-May's $132,812.38 lien against the estate for
the earlier sales of other real property owned by the estate. In
re Kollel Mateh Efraim, 2009 Bankr. Lexis 2236, at * 17-18.
The
Trustee agreed in the second settlement to pay down $30,000 of
2
Gene Barbanti provided the Bankruptcy Court with testimony
regarding the reasonable rental value of the Property. In re
Kollel Mateh Efraim, 2009 Bankr. Lexis 2236, at * 7.
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the lien, and the remaining $102,812.38 would be superior to all
other chapters 11 and 7 administrative claims. Id.
Additionally, the second settlement awarded Helen-Mayan
administrative claim totaling the difference between the total
post-petition Daily Penalty and the lien amount. Id.
Frankel & Krinsky, LLC ("BFK")
Backenroth
and the Appellees here objected
to the settlement and the payment of the Daily Penalty. In re
Kollel Mateh Efraim, 2010 Bankr. Lexis 3197, at
*
9.
Upon
review of the record, the Bankruptcy Court reopened the record
to determine Helen-May's administrative claim.
The Bankruptcy
Court's rationale for reopening the record was two-fold:
(1)
during the hearing on adequate protection in July 2005, the
Bankruptcy Court never ruled on whether the Daily Penalty under
the Occupancy Agreement fixes the reasonable value of the use of
the Property by the Debtor; and (2) the Bankruptcy Court
exercised its discretion to revisit its prior Orders because the
Court learned of the existence of the Occupancy Agreement after
the determination on adequate protection. In re Kollel Mateh
Efraim, 2009 Bankr. Lexis 2236, at
*
26-28.
On March 10, 2010, the Bankruptcy Court conducted an
evidentiary hearing. Id.
Helen-May called Paul Griffin, Helen
May's former hotel resort manager, to testify on the reasonable
rental value of the Property.
(Tr. March 10, 2010, at 6.)
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Griffin, a former Navy reservist and musician, worked in the
hospitality industry since the late 1980s and sat on Sullivan
County's Chamber of Commerce and Tourism Board. Id. at 6-9.
Initially, Helen-May moved for the Bankruptcy Court to qualify
Griffin as an expert testimony or a lay witness. Id. at 11.
The
Bankruptcy Court rejected permitting Griffin as an expert
witness, but allowed Helen-May the opportunity to lay a
foundation necessary to qualify Griffin as a lay witness
regarding the fair rental value of the Property. Id. at 13-14.
Griffin testified that he estimated the net revenue of the
resort hotel for 2004 through 2007 was approximately $1.4
million. Id. at 33-37.
Griffin concluded that the fair market
rental value of the property "would be roughly $100,000 a month
based on the $1.4 projection per year." Id. at 44.
Upon cross-
examination, however, the Appellees demonstrated Griffin lacked
knowledge of the fair market rental value of comparable
properties:
Mr. Blander: Do you have any personal knowledge, sir, as
to the fair market rental value of any comparable
properties in Sullivan County?
Mr. Griffin: As I said, that's not a -- something -- a
function that I, as a hotelier, have ever discussed or
considered prior to all of this.
Mr. Blander: So the answer is no?
Mr. Griffin: Right.
Id. at 45-46.
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Moreover, Griffin had no knowledge of the actual annual
revenue of the Property between 2000 and the part of 2004 when
he served as manager:
Mr. Blander: Now is it fair to say, sir, that sitting here
today you have no recollection of the actual positive cash
flow of The Meadows in '00, '01, 102, '03, and the part of
'04 that you owned it?
Mr. Griffin: Correct.
Id. at 47.
Following Griffin's testimony, the Bankruptcy Court
expressed its skepticism of whether Helen-May had met its
burden, but the Bankruptcy Court allowed Helen-Mayan
opportunity to supplement the record.
In response, Helen-May
read portions of Rabbi Steinwurzel's testimony stating that he
paid approximately $45,000 for use of another property, which is
not at issue here.
(Tr. March 10, 2010 at 99-100.)3
Subsequently, Appellees moved for partial findings since HelenMay failed to make a prima facie case for an administrative
claim. In re Kollel Mateh Efraim, 2010 Bankr. Lexis 3197, at *
15.
3
Once Helen-May's attorney finished reading the testimony of
Rabbi Steinwurzel, it sought permission from the Bankruptcy
Court to keep the record open and offer another expert to the
Bankruptcy Court on a future date in the event that the Court
was not convinced by Helen-May's evidence and arguments. (Tr.
March 10, 2010 at 99-105.)
The Bankruptcy Court, however,
closed the record after noting that it had already \\re-open[ed]
the proof" and Helen-May was not going to get a "do over" on an
issue that had been raised two months prior to the October 2010
hearing. (Id.)
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After briefing and consideration of the evidence, the
Bankruptcy Court ruled that Appellant Helen-May's administrative
claim be set at zero. In re Kollel Mateh Efraim, 2010 Bankr.
Lexis 3197, at * 22.
The Bankruptcy Court determined that while
Griffin's testimony proves that the Debtor was in possession of
the Property, it failed to establish the portion of the Property
the Debtor used and the value of any use that did occur. Id. at
* 21.
Additionally, Helen-May failed to proffer evidence
establishing a connection between the income generated by the
operation of the summer camp and the use of the Property by the
debtor. Id.
To sum up, the Bankruptcy Court concluded uHelen
May failed to carry its [sic] burden of proving the elements of
its administrative claim./I Id. at * 22-23.
II. DISCUSSION
A. Jurisdiction and Standard of Review
Pursuant to 28 U.S.C.
§
158(a) and Fed. R. Bankr. P. 8013,
8001(a) and 8002(a), this Court has jurisdiction of this appeal
because the Bankruptcy Court's Orders are final and the appeal
is timely.
This Court reviews the Bankruptcy Court's legal conclusions
de novo. Pearl-Phil GMT LTD. v. Caldor Corp., 266 B.R. 575, 580
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(S.D.N.Y. 2001)
(citing Nat'l Union Fire Ins. Co. v. Bonnazio
(In re Bonnanzio), 91 F.3d 296, 300 (2d Cir. 1996».
The
Bankruptcy Court's finding of facts are reviewed under a clearly
erroneous standard, In re Momentum Mfg. Corp., 25 F.3d 1132,
1136 (2d Cir. 1994), and "the burden of demonstrating that the
Bankruptcy Court's findings of fact are clearly erroneous rests
squarely on the shoulder of the appellant." In re Ciena Capital,
440 B.R. 47, 52 (S.D.N.Y. 2010).
"A lower court's choice
between two permissible views of the facts cannot be held to be
clearly erroneous." In re Commodore Bus. Mach., 246 B.R. 476,
487 (S.D.N.Y. 2000).
A clearly erroneous decision "must strike
the court as more than just maybe or probably wrong; it must
strike the court as wrong with the force of a five-week-old
unrefrigerated dead fish." Id.
(citing Parts and Elec. Motors,
Inc. v. Sterling Elec., Inc., 866 F.2d 228, 233 (7th Cir. 1988),
cert. denied, 493 U.S. 847, 107 L. Ed. 2d 100, 110 S. Ct. 141
(1989)
(internal quotations omitted».
This Court gives
deference to the Bankruptcy Court's "factual determinations
because of its expertise and superior position to make
determinations of credibility." Pearl-Phil GMT LTD. v. Caldor
Corp., 266 B.R. at 580 (citing In re Commodore Bus. Mach., 246
B.R. at 487 (internal quotations omitted».
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"Mixed questions of law and fact are reviewed de novo or
under the clearly erroneous standard depending on whether the
question is predominantly legal or factual." Best Payphones,
Inc., v. Manhattan Telecomm. Corp., 432 B.R. 46, 53 (S.D.N.Y.
2010)
(citing Italian Colors Rest. v. Am. Express Travel Related
Servs. Co (In re Am. Express Merchants' Litig.), 554 F.3d 300,
316 (2d Cir. 2009), vacated sub nom. Am. Express Co. v. Italian
Colors Rest., 130 S.Ct. 2401 (2010)
omitted»
(internal quotations
.
B. Relevant Law
The Bankruptcy Court held that Helen-May's administrative
claim is limited to the actual benefit derived by the Debtor,
and that Helen-May offered no competent evidence demonstrating
that the Debtor derived any benefit. In re Kollel Mateh Efraim,
2010 Bankr. LEXIS 3197, at
* 22-23.
This Court agrees.
11 U.S.C. §503(b) (1) (A) allows for administrative expenses
for "actual, necessary costs and expenses of preserving the
estate, including wages, salaries or commissions for services
rendered after the commencement of the case."
Administrative expenses are afforded the highest priority
during bankruptcy liquidation and reorganization.
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11 U.S.C. §
507(a} (1).
The purpose of the priority status for
administrative expenses is Uto ensure that the services needed
to preserve the estate will be performed [and provided by third
parties] by minimizing the risk that the debtor will ultimately
not be able to provide payment therefor." In re Cook and Sons
Mining, Inc., Case No. 05-19, 2005 U.S. Dist. LEXIS 21615, at *
20 (Bankr. E.D. KY. 2005)
(citing In re Roth American, Inc., 975
F.2d 949, 958 (3rd Cir. 1992)}.
uSince the affording of
priority status to one creditor has an impact upon other
creditors of the debtor's estate and conflicts with the goal of
bankruptcy to provide creditors with an equal distribution of a
debtor's resources, this court has consistently held that
administrative claims must be narrowly construed." In re LeaseA-Fleet, Inc., 140 B.R. 840, 844 (Bankr. E.D. Pa. 1992}i In re
Enron Corp., 279 B.R. 695,704 (Bankr. S.D.N.Y. 2002)
(citing
Amalgamated Ins. Fund v. McFarlin's Inc., 789 F.2d 98, 101 (2d
Cir. 1986}).
Strictly construing Uactual, necessary costs and expenses
of preserving the estate" minimizes administrative claims and
preserves the resources of the estate for the benefit of all
creditors. In re Enron Corp., 279 B.R. at 704.
The claimant must carry the burden of proving entitlement
to an administrative claim by showing that the expense:
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(1)
arises out of a transaction between creditor and bankruptcy
estate; and (2) that the expense "was a 'necessary' expense of
the bankruptcy estate by showing the debt directly and
substantially benefitted the estate." In re Cook and Sons
Mining, Inc., 2005 U.S. Dist. LEXIS 21615, at
* 23 (citing In re
Economy Lodging Sys., Inc.), 234 B.R. 691, 696 (B.A.P. 6th Cir.
1999»; In re Enron Corp., 279 B.R. at 705.
Under the "benefit to the estate test" specified above, "a
court looks to the actual benefit to the estate [,] not the loss
sustained by a creditor." In re Enron Corp., 279 B.R. at 705
(citing In re CIS Corp., 142 B.R. 640, 642
(S.D.N.Y. 1992».
Mere possession of claimant's property without any actual use by
the debtor is not enough to warrant an administrative claim. See
In re Enron Corp .., 279 B.R. at 706 ("The 'option' to use the
property that is inherent in mere possession is considered not
sufficient to establish benefit to the estate if the debtor does
not actually use the property."); In re Patient Education Media,
Inc., 221 B.R. 97, 102 (Bankr. S.D.N.Y. 1998).
Possession
without use may only be grounds for an administrative claim when
the estate benefits from the possession. Oscar Heineman Corp. v.
Nat Levy
&
Co., Inc., 6 F.2d 970, 975 (2d Cir. 1925) ("a court of
equity will not allow a receiver who has had the benefit of the
lease to enjoy those benefits without paying therefor . . . ").
12
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C. The Bankruptcy Court Did Not Err in Considering the
Administrative Claim
In the July 20, 2005 hearing, the Bankruptcy Court
determined adequate protection based on testimony demonstrating
the reasonable rental value as a function of an initial
investment. In re Kollel Mateh Efraim, 2009 Bankr. Lexis 2236,
at
*
8.
Helen-May contends that this evidence also established
its administrative claim, and the Bankruptcy Court erred in
holding a future evidentiary hearing on the existence of HelenMay's administrative claim.
1. Establishing Adequate Protection Does Not Establish an
Administrative Claim
Bankruptcy proceedings trigger an automatic stay on any act
"against a property of the estate that was or could have been
commenced before the filing of the petition." New England
Dairies, Inc. v. Dairy Mart Convenience Stores, Inc., 351 F.3d
86, 90 (2d Cir. 2003).
An entity or creditor with an interest
in a property part of the estate in bankruptcy is granted
adequate protection when that interest is endangered. 11 U.S.C
362.
A creditor's interest in a property is endangered when
there is a decline in the value of the property, but also when
the creditor is paying to maintain the collateral. In re Balco
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§
Ltd., 312 B.R. 743, 751 (Bankr. S.D.N.Y. 2004).
The purpose of
adequate protection is to protect "the creditor from diminution
in the value of its collateral during the reorganization
process." In re Mosello, 195 B.R. 277, 292
1996)
(Bankr. S.D.N.Y.
(citing In re Beker Indus., 58 B.R. 725, 736 (Bankr.
S.D.N.Y. 1986».
Here, the Bankruptcy Court granted Helen-May adequate
protection because the Debtor had actual possession of the
Property.
During the hearing to determine adequate protection,
Helen-May offered proof in the form of its own assessment of the
fair-market rental value of the Property based on expected
returns on an investment of $1.4 million.
The Bankruptcy Court
determined the amount of adequate protection using the fair
market rental value of the Property, plus a reasonable return on
the Property, plus taxes.
(Trial Transcript In re Kollel Mateh
Efraim, Case No. 04-16410, July 20, 2005 enTre July 20, 2005")
at 10, 13.)
In fixing adequate protection, the Bankruptcy Court
explicitly assumed that Debtor possessed 100% of the Property.
Id. at 13.
Just because the Bankruptcy Court determined adequate
protection based on posseSSion of the Property by Debtor, an
administrative claim has not been established, as possession is
insufficient to establish entitlement to an administrative
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claim. In re Mid-Region Petroleum, 1 F.3d 1130, 1133 (10th Cir.
1993)
(finding that a debtor's mere possession of railcars
without use is not a benefit entitling creditor to an
administrative expense);
~
In re Enron Corp., 279 B.R. at 706.
In fact, the Bankruptcy Court found that Helen-May did not offer
any evidence proving that the Debtor used 100% of the Property.
Instead, the Appellant, at most, offered evidence that the
Debtor allowed a non-party to use a portion of the Property as a
summer camp and then offer the amount that non-party paid to use
a wholly different property.
The Bankruptcy Court, properly,
did not afford weight to this evidence for purposes of
There is no clear error
establishing an administrative claim.
regarding the Bankruptcy Court's finding on the weight of this
evidence. See United States v. Yellow Cab Co., 338 U.S. 338, 342
(1949)
(holding no clear error "where the evidence would support
a conclusion either way but where the trial court has decided to
weigh more heavily for the defendants.
fl
).
As the Bankruptcy
Court held, inferring the actual benefit the Debtor received
simply by receiving evidence as to what others paid for
similarly situated land is improper.
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2. Doctrine of Law of the Case
Helen-May argues that the doctrine of law of the case
should apply and the Bankruptcy Court's findings on adequate
protection should also establish an administrative claim.
The
doctrine of law of the case holds that "when a court decides
upon a rule of law, that decision should continue to govern the
same issues in subsequent stages in the same case." Christianson
v. Colt Indus. Operating Corp., 486 U.S. 800, 815-16 (1988).
The doctrine is discretionary and does not limit a court's
ability to reconsider an issue. Liona Corp., Inc. v. PCH Assocs.
{In re PCH Assocs.}, 949 F.2d 585, 592 (2d Cir. 1991).
In opening an evidentiary hearing on Helen-May's
administrative claim, the Bankruptcy Court sought to simply
clarify the record and, therefore, did not abuse its discretion.
See In re PCH Assocs., 949 F.2d at 592.
As the Bankruptcy Court
noted, "the record [the July 20, 2005 Hearing on adequate
protection] is muddled" and the former bankruptcy judge, Judge
Blackshear, gave no explanation when denying Helen-May's
petition in 2004 seeking $1,500 a day payment 4 pursuant to the
4
Helen-May argues that the Occupancy Agreement should
govern, where the $1,500 daily rate represents the lease value
of the Property.
In In re Lease-A-Fleet, the court rejected a
claimant's argument "that the 'reasonable' value of the Debtor's
use of its property .
is measured strictly by the terms of
the parties' lease." 140 B.R. at 847.
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Occupancy Agreement. S In re Kollel Mateh Efraim, 2009 Bankr.
Lexis 2236, at
*
27.
Additionally, the July 20, 2005 hearing
failed to show the actual benefit to the Debtor, and did not
address the central inquiry for an administrative claim.
D. Burden of Proof
Next, Helen-May argues that the Bankruptcy court erred in
requiring it to establish the burden of proof as to the
entitlement to an administrative claim.
While the Second
Circuit has not reached this precise issue, the case law in the
majority of jurisdictions, including sister courts of this
district, clearly holds that the claimant must prove entitlement
to an administrative claim. In re Economy Lodging Sys., Inc.,
234 B.R. at 696; Collet Ventures, Inc. v. Inexco Oil Co., 1990
U.S. Dist. Lexis 7444, at
* 6 (W.D. Missouri
1990}i In re Enron
Corp., 279 B.R. at 705 ("The claimant has the burden of
establishing entitlement to the prioritY")i In re Drexel Burnham
Lambert Grp. Inc., 134 B.R. 482, 489 (Bankr. S.D.N.Y. 1991).
S
The record is, as the Bankruptcy Court put it, "muddled"
because Helen-May advanced a theory seeking payment for "use and
occupancy" and the use of this phrase is not necessarily related
to an administrative claim. Hence, it was appropriate for the
Bankruptcy Court to determine Helen-May's administrative claim
for the first time. Moreover, the Bankruptcy Court learned of
the Occupancy Agreement after determining adequate protection
and never considered the merits of the $1,500 Occupancy
Agreement as a means to determine an administrative claim. In re
Kollel Mateh Efraim, 2009 Bankr. Lexis 2236, at * 8.
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Additionally, Helen-May contends that because the Debtor
denied it access to the Property, Helen-May should not be
required to shoulder the requisite burden of proof.
argument is meritless.
This
In In re Equipment Leasers of Penn.,
Inc., the Court denied a similar argument advanced by a
Nos. Civ. A. 96-544, 1996 WL 325105, at
claimant.
*
5 (E.D.Pa.
1996) ("nothing precluded Appellant [claimant] from calling
additional witnesses to testify to Debtor's use of the
Building.")
As in In re Equipment Leasers of Penn., Inc.,
Helen-May could have called additional witnesses to testify as
to the Debtor's activities on the Property, but instead, Helen
May only relied on the testimony of two witnesses that had no
actual knowledge of the activities on the Property. See In re
Equipment Leasers of Pennsylvania, Nos. Civ. A. 96- 544, 1996 WL
325105, at
*
5.
E. Weight of Evidence
Early in the March 10, 2010 hearing, the Bankruptcy Court
gave notice to Helen-May that it had not laid a proper
foundation to qualify Paul Griffin as an expert witness or a lay
witness.
(Tr. March 10, 2010 at 13.)
Griffin had no actual
knowledge of the Property's revenue stream while he "managed"
the Property and knew nothing about similarly-placed properties.
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(Tr. March 10, 2010, at 45-47.)
The Bankruptcy Court did not
abuse its discretion in finding that Griffin's testimony was
insufficient for Griffin to quality as an expert witness and
that his lay witness testimony was irrelevant. See Gulf Ins. Co.
v. Glasbrenner, 343 B.R. 47, 57 (S.D.N.Y. 2006); In re Dunn,
Case No. 95-C-50305, 1996 U.S. Dist. LEXIS 5744, at * 11 (N.D.
Ill. 1996)
(holding that a function of the ubankruptcy court as
the trier of fact
[is] to determine the credibility of witnesses
and the weight to be given to their testimony.").
Following the close of evidence and Griffin's testimony,
the Bankruptcy Court informed Helen-May that it has failed to
offer proof entitling it to an administrative claim but
nonetheless, reopened the record to allow Helen-May another
opportunity to submit evidence to establish an administrative
claim.
In its second attempt, Helen-May merely read into the
record the deposition testimony of Rabbi Steinwurzel.
Helen-May sought to use Rabbi Steinwurzel's prior testimony
as proof of the amount the Debtor benefited by using the
Property as a camp in the summers of 2004 through 2007.
However, Rabbi Steinwurzel's deposition testimony only
demonstrated that he paid approximately $45,000 to use some
other property, not the Property at issue in this case.
Helen
May tendered no further evidence supporting the conclusion that
19
that the Debtor actually benefited from the use of the Property
as a camp.
The Bankruptcy Court found, and this Court agrees,
that this additional evidence failed to rectify the defects in
Helen-May's ability to establish a prima facie case. 6 (Tr. March
10, 2010 at 105.)
Finally, even if a plausible claim for an administrative
claim could be drawn from Helen-May's evidence, "so long as the
factual findings of the bankruptcy court are plausible in light
of the record viewed in its entirety, this Court may not reverse
it even though convinced that had it been sitting as the trier
of fact, it would have weighed the evidence differently." In re
WorldCom, Inc., Case No. 09-CV-9623, 2011 U.S. Dist. LEXIS
42279, at
*
16-17 (S.D.N.Y. 2011)
Bessemer City, 470 U.S. 564, 574
omitted».
(citing Anderson v. City of
(1985)
(internal quotations
The evidence was insufficient.
III. CONCLUSION
For the reasons above, the Bankruptcy Court's Orders dated
August 18, 2009, September 21, 2010, and October 12, 2010 are
6
Helen-May admitted to trying the case "on a more economic
basis." As the Bankruptcy Court noted, efforts to save money do
not justify a court allowing new theories, tactics or a re
opening of the record on a piece-meal basis: "You [Helen-May]
don't get a do over . . . . (Tr. March 10, 2010 at lOS.)
20
AFFIRMED in their entirety.
is hereby DISMISSED.
Helen-May's appeal in this action
The Clerk of Court is DIRECTED to close
the docket in this case.
SO ORDERED.
DATED:
New York, New York
August 2, 2011
DEBORAH A. BATTS
United States District Judge
21
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