Harriman v. Vactronix Scientific, Inc. et al

Filing 30

ORDER the Court AFFIRMS the decision of the bankruptcy court and finds that Appellant lacks standing to bring an appeal in this Court. This appeal is hereby DISMISSED. Signed by Judge Xavier Rodriguez. (rf)

UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
IN RE PALMAZ SCIENTIFIC, INC., ET
AL.,
Debtors,
SUSAN E. HARRIMAN,
Appellant,
v.
VACTRONIX SCIENTIFIC, INC., ET AL.,
Appellees.

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Civil Action No. SA-16-CV-1021-XR
Bk. Adv. No. 16-50552-CAG

ORDER
This civil action is before the Court on appeal from the United States Bankruptcy Court
for the Western District of Texas. For the reasons stated below, the judgment of the bankruptcy
court is AFFIRMED and the appeal is DISMISSED.
BACKGROUND
In a separate lawsuit initiated before any bankruptcy proceedings, Appellant Susan
Harriman sued Debtor Palmaz Scientific, Inc. in Dallas state court. Dist. Ct. Docket no. 6 at 3.
Before the state court could render judgment in the Dallas lawsuit, Debtor filed for Chapter 11
bankruptcy on March 4, 2016. Id.; Bankr. Docket no. 1.
Originally, the deadline for filing a proof of claim in the bankruptcy proceeding was July
5, 2016. Bankr. Docket no. 41 at 1. Notice of this deadline was sent to Appellant at a Dallas
address. Id. at 7. On May 10, 2016, the bankruptcy court shortened the claims deadline to June 1,
2016. Bankr. Docket no. 208. Notice of this change was sent to Appellant at the same Dallas

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address. Bankr. Docket no. 214-1 at 8. Appellant did not file a proof of claim by either the
original deadline or the shortened deadline
On June 10, 2016, Debtor proposed a plan in which a third party, Vactronix Scientific,
Inc., agreed to purchase the Dallas lawsuit as a “pass-through,” such that Vactronix would
acquire Debtor’s rights to and liability from the Dallas suit: “If Vactronix is the Purchaser and
acquires the Debtor’s claims in the [Dallas lawsuit], Vactronix shall assume any and all of the
Debtor’s liability arising out of or relating to the [Dallas lawsuit], without limiting any nonDebtor party’s liability for such claims, including applicable insurance policies.” Bankr. Docket
no. 282 at 15. That Plan also stated that “nothing in this Plan shall waive, release or limit any
claims or liability asserted in the [Dallas lawsuit].” Id. at 28.
That day, the Bankruptcy court held a sale hearing. See Bankr. Docket no. 423. At that
hearing, Mr. Jim Hoffman, an attorney, appeared and made a $10 bid for the rights and liabilities
from the Dallas lawsuit. Id. at 19. Mr. Hoffman stated that he represented himself and was
making the bid as an individual, though he later represented Appellant before the bankruptcy
court and represents her on this appeal. Bankr. Docket no. 423 at 20; Bankr. Docket no. 367 at 5;
Dist. Ct. Docket no. 1 at 6. The bankruptcy court found that Mr. Hoffman’s $10 offer did not
qualify as a competing bid based on a prior order regarding sale procedures, and approved the
sale. Bankr. Docket no. 423 at 43–44. The bankruptcy court set a June 24 deadline for objections
to the plan and set a confirmation hearing for June 27. Id. at 62; see also Bankr. Docket no. 294.
Mr. Hoffman asked for permission to appear telephonically for the June 27 confirmation hearing,
which the bankruptcy court granted. Bankr. Docket no. 294 at 58.
Appellant filed no objections to the plan by the June 24 deadline. At the June 27
confirmation hearing, limited objections were heard, though it does not appear that Mr. Hoffman

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attended (telephonically or otherwise). Bankr. Docket no. 355. At the hearing, the bankruptcy
court discussed a change to the language of the Plan, which purportedly changed the Plan’s
treatment of the Dallas lawsuit. Id. at 55–57. This language, which Debtor ultimately submitted
in its July 14 Second Amended Joint Plan of Reorganization and the bankruptcy court approved
in its July 15 Order Confirming the Plan, reads as follows:
Vactronix designates HC Litigation Fund, LLC as the party to be assigned any
and all of the Debtors’ claims and rights (including any applicable insurance
coverage) in the Harriman Case. HC Litigation Fund, LLC shall also assume any
and all of the Debtor’s liability, if any, remaining after Bankruptcy (see 11.4
herein and the Order confirming the Plan), for claims presently asserted against
the Debtor arising out of or relating to in the Harriman Case. Nothing herein shall
limit any non-Debtor party’s liability, including coverage under any applicable
insurance policies. Provided, however, that neither HC Litigation Fund, LLC, nor
any other Person, shall have any right to any D & O Insurance Recovery under
any D & O Insurance Policy or any proceeds of, or coverage under, any such
policy.
Id.; Bankr. Docket no. 351 at 14–15; Bankr. Docket no. 356 at 26–27.
Appellant maintains that the first time she learned of this change to the Plan was on July
15 when the bankruptcy court entered its order confirming the Plan as amended. Docket no. 6 at
12. On July 29, 2016, Appellant, appearing formally for the first time before the bankruptcy
court, filed a motion to reconsider the bankruptcy court’s order confirming the Plan. Bankr.
Docket no. 367. Appellant argued that changes to the Plan’s treatment of the Dallas lawsuit
adversely affected her rights in that case. Id. at 3. On August 1, the bankruptcy court held a
hearing on this motion, at which Mr. Hoffman argued on Appellant’s behalf. Bankr. Docket no.
451. Mr. Hoffman acknowledged that he did not file an objection to the confirmation of the Plan.
Id. at 16. He acknowledged that Appellant knew of the bankruptcy case. Id. at 73. Ultimately, the
bankruptcy court denied Appellant’s motion for reconsideration because, in short, Appellant
never filed a proof of claim in the bankruptcy proceeding. Id. at 76–80; Docket no. 374.

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Now before this Court is Appellant’s appeal of the Bankruptcy court’s denial of her
Motion for Reconsideration.
DISCUSSION
I.

Appellant’s Issues on Appeal
Appellant designates four points on appeal: (1) that the Confirmed Plan should be

reconsidered to account for Appellant’s interest in the Dallas lawsuit; (2) that the filing of a proof
of claim in the bankruptcy court was not required to preserve Appellant’s claims in the Dallas
lawsuit; (3) Appellant’s Due Process rights were violated by the bankruptcy court’s approval of
the Confirmed Plan; and (4) the preservation of Appellant’s claims in the Dallas lawsuit is
mandated by equity. Docket no. 6 at 2–3.
The Court finds that Appellant lacks standing to appeal because she failed to file a proof
of claim or otherwise appear or object before the bankruptcy court. Furthermore, contrary to her
assertion on the third point, the Court finds that Appellant was not deprived of due process. As a
result, Appellant lacks standing, and the Court need not reach the merits of her objections to the
confirmed plan.
II.

Standard of Review
a. Appellate Standard
On appeal, a bankruptcy judge’s conclusions of law are reviewed de novo, whereas

findings of fact will not be set aside unless clearly erroneous. In re National Gypsum Co., 208
F.3d 498, 503 (5th Cir. 2000). The district court reviews mixed questions of law and fact de
novo. Id.

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b. Legal Test for Standing
Appellant argues that the Fifth Circuit does not require her to file a proof of claim or
objection in bankruptcy court to preserve her standing to appeal the denial of her motion for
reconsideration. Further, she argues that was not given adequate notice of the shortening of the
claims deadline from July 5 to June 1, which she says deprived her of due process.
Appellees 1 argue that Appellant lacks standing to appeal the bankruptcy court’s ruling
because she did not file a proof of claim or otherwise object to confirmation of the plan.
Appellees add that Appellant’s due process rights were not violated by the shortening of the
claims bar deadline.
Bankruptcy courts are not created by Article III of the Constitution and thus are not
necessarily bound by traditional standing requirements. In re Coho Energy Inc., 395 F.3d 198,
202 (5th Cir. 2004). Previous versions of the Bankruptcy Code provided that to have standing to
appeal a bankruptcy court’s order, one must be a “person aggrieved” by the order of a
bankruptcy referee. 11 U.S.C. § 67(c) (1976). This provision has since been omitted from the
Code, but the “person aggrieved” test has survived as the baseline for standing in bankruptcy
appeals in many circuits, including the Fifth Circuit. In re Coho, 395 F.3d at 202. This test is
more exacting than traditional constitutional standing and requires a stronger causal nexus
between act and injury. Id. Thus, this inquiry asks whether an appellant was “directly and
adversely affected pecuniarily by the order of the bankruptcy court.” Id. (quoting In re Fondiller,
707 F.2d 441, 443 (9th Cir. 1983)).
Beyond satisfying the “person aggrieved” test, numerous circuit courts have gone a step
further by also requiring that an appellant timely file an objection to the bankruptcy plan in the

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Appellees are Vactronix, the third-party purchaser of Debtor’s assets, and HC Litigation Fund, the entity
to receive the rights and liabilities from the Dallas lawsuit.

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bankruptcy court. E.g. In re Weston, 18 F.3d 860, 864 (10th Cir. 1994) (holding a party that
elects not to participate in a matter before the bankruptcy judge, has “no standing to appeal the
bankruptcy court’s resolution of the matter”); see also 1-5 ALAN N. RESNICK & HENRY SOMMER,
COLLIER

ON

BANKRUPTCY ¶ 5.07 (16th ed. 2016) (recognizing that “an appearance at and

objection to (or support of) the matter being considered by the bankruptcy court have been held
prerequisite to the right to appeal.”). As Appellees point out, the Seventh, Ninth, and Tenth
Circuits subscribe to this view. In re Ray, 597 F.3d 871, 874 (7th Cir. 1992) (“Prerequisites for
being a ‘person aggrieved’ are attendance and objection at a bankruptcy court proceeding.”
(quoting In re Schultz Mfg. & Fabricating Co., 956 F.2d 686, 690)); In re Comm’l W. Fin. Corp.,
761 F.2d 1329, 1335 (9th Cir. 1985) (“[W]e agree that attendance and objection should usually
be prerequisites to fulfilling the ‘person aggrieved’ standard”); In re Weston, 18 F.3d at 864
(10th Cir. 1994).
The judicial efficiency of the bankruptcy system justifies this requirement. In re Comm’l
W. Fin. Corp., 761 F.2d at 1335 (9th Cir. 1985). With numerous creditors and issues arising in
each bankruptcy proceeding, the requirements of attendance and objection before the bankruptcy
court limit appellate standing in order to preserve the efficiency of the system and promote the
finality of a bankruptcy court’s orders. Id.; see also Richard B. Levin, Bankruptcy Appeals, 58
N.C. L. REV. 967, 977–78 (1980) (discussing the attendance and objection requirements as
furthering judicial economy). A counterbalance to judicial efficiency and a corollary to this
requirement, however, is due process. To be deprived of standing for a failure to appear and
object before the bankruptcy court, a party generally must receive proper notice of the
proceedings below. See In re Ray, 597 F.3d at 874 (quoting In re Comm’l W. Fin. Corp., 761
F.2d at 1335 (9th Cir. 1985)); see also Levin, Bankruptcy Appeals 278 n. 78 (“This rule may

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differ, however, if the objecting party did not receive proper notice of the proceedings below and
of his opportunity to object to the action proposed to be taken. In that case, the requirements of
due process outweigh those of judicial efficiency and certainty.”). Thus, to the extent that an
appearance and objection are required for Appellant to have standing on appeal, this standard
also encompasses whether Appellant’s failure to do so is excused by inadequate notice and her
due process rights.
A minority of circuit courts go in the opposite direction on this question, inquiring only
into whether a party is a “person aggrieved” without regard to whether the party appeared or
objected before the bankruptcy court. Int’l Trade Admin. v. Rensselaer Polytechnic Inst., 936
F.2d 744, 747–48 (2d Cir. 1991); In re Urban Broad. Corp., 401 F.3d 236, 244 (4th Cir. 2005).
On this point, the Fourth Circuit reasoned that
defining standing by whether a party waives or forfeits rights to object to claims, as did
the district court, misconstrues the standing requirement as we have defined it, i.e., that
the appellant show that he has been directly and adversely affected pecuniarily by the
bankruptcy order. Moreover, defining standing by whether an appellant has objected to
an order or attended a hearing conflates basic notions of standing with notions of waiver
and forfeiture. Accordingly, we adhere to the formulation of standing articulated in [In re
Clark, 927 F.2d 793, 795 (4th Cir. 1991)] and, in this case, ask only whether [the
appellant] was directly and adversely affected pecuniarily by the bankruptcy court’s
order.
In re Urban Broad. Corp., 401 F.3d at 244 (emphasis original).
The Fifth Circuit has not reached an express holding in either direction, but has indicated
acceptance of the Seventh, Ninth, and Tenth Circuits’ appearance and objection requirement. In
In Matter of the Watch, Ltd., 257 F. App’x 748, 748–50 (5th Cir. 2007), a creditor appealed the
bankruptcy court’s order approving a sale of the debtors’ assets, even though the creditor made
no objections before the bankruptcy court. The Fifth Circuit ultimately held that the appeal was
moot. Id. Before reaching this conclusion, however, the court addressed the possibility that the

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creditor lacked standing to appeal due to his failure to object. Id. at 749–50. The court
summarized the Seventh, Ninth, and Tenth Circuits’ reasoning, which it described as “cogent,”
and noted a conflict with the view of the Fourth Circuit. Id. But because the court decided the
appeal on mootness grounds, it did not reach a holding on the appellate standing question. Id.
In In re Tullius, 500 F. App’x. 286, 287 (5th Cir. 2012), creditors subpoenaed a financial
institution under Bankruptcy Rule 2004, seeking financial records from the debtor and his
business partner in an attempt to uncover fraudulent transactions. Through a series of oral
discovery orders, the bankruptcy court granted the request in a limited way and sanctioned the
creditors. Id. at 287–88. The district court dismissed the creditors’ appeal because the discovery
orders were interlocutory. Id. at 288. The Fifth Circuit ultimately agreed with the district court
that the discovery orders were interlocutory and dismissed the appeal. Id. at 291. In arriving at
this conclusion, the Fifth Circuit addressed the creditors’ argument that “because the bankruptcy
court confirmed the debtor’s plan and no adversary proceedings ever took place, [the creditors
would have had] no final decisions from the bankruptcy court from which to appeal.” Id. at 290–
91. After characterizing the bankruptcy court’s order approving the plan as an appealable final
order, the Fifth Circuit noted in a footnote that
[w]hether [the creditors] would have standing to appeal a confirmation order in
this case, absent an earlier objection, is doubtful. See 1 COLLIER ON BANKRUPTCY
§ 5.07 (noting, in a discussion about standing to appeal an order of the bankruptcy
court, that “an appearance at and objection to (or support of) the matter being
considered by the bankruptcy court have been held prerequisite to the right to
appeal”).
Id. at 290 n. 13 (citations and quotations original, alterations added).
Finally, aside from the Fifth Circuit’s statements, the Bankruptcy Court for the Western
District of Texas has also required appearance and objection before the bankruptcy court as a
prerequisite to a motion to reconsider, except where such a motion addresses subject matter
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jurisdiction. In Re Camp Arrowhead, Ltd., 451 B.R. 678, 693–94 (discussing In re Ray, 597 F.3d
at 872–73 (7th Cir. 2010)). 2
The Fifth Circuit’s statements in In Matter of the Watch and In re Tullis regarding the
appearance and objection prerequisite to person aggrieved standing on appeal are clear dicta.
Still, they are strong indications of how the Fifth Circuit would rule if it were actually presented
with the question. Furthermore, the reasoning behind the appearance and objection requirement
is persuasive. Bankruptcy proceedings are complex both in the number of parties involved and
the number of issues at play. The efficiency and economy of the bankruptcy system are
paramount, and finality serves these goals. Requiring potential claimants to take the simple step
of filing a proof of claim or lodging an objection before the bankruptcy court is logical.
Otherwise, bankruptcy proceedings could be disrupted by dilatory late-comers or, worse yet,
those strategically withholding claims and objections with the goal of asserting them only on
appeal.
While this requirement burdens potential claimants and others to stay apprised of
bankruptcy proceedings, the Seventh and Ninth Circuits build due process and fairness into this
burden—a failure to appear and object before the bankruptcy court is excused and an appellant
nevertheless has standing where he “d[oes] not receive proper notice of the proceedings below
and of his opportunity to object to the action proposed to be taken.” In re Ray, 597 F.3d at 874
2

The question in In re Camp Arrowhead came before the bankruptcy court on a significantly different
procedural posture, but the court nevertheless approved of the Seventh Circuit’s appearance and objection
requirement and applied it in that case. There, a party that purportedly contracted to purchase assets from the debtor
filed a motion for reconsideration, challenging the bankruptcy court’s subject matter jurisdiction and several other
matters. In re Camp Arrowhead, 451 B.R. at 685–87. The bankruptcy court found that “the scope of reconsideration
will be limited to whether this court had subject matter jurisdiction.” Id. at 695. In reaching its decision to focus only
on the jurisdictional question while disregarding all other objections that the movant could have raised before, the
court relied heavily on In re Ray’s reasoning regarding the attendance and objection prerequisite for standing. Id. at
694 (“With regard to the remaining arguments for reconsideration urged by [the movant], however, the teaching of
Ray is that reconsideration on those grounds is not proper. [The movant] has not adequately demonstrated that it ‘did
not receive proper notice of the proceedings below and of his opportunity to object to the action proposed to be
taken.’” (quoting In re Ray, 597 F.3d at 874)).

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(quoting In re Comm’l W. Fin. Corp., 761 F.2d at 1335). Thus, the standard, as applied, balances
the efficiency of the bankruptcy proceedings with individuals’ entitlement to notice. Indeed, it
would make little sense to deprive an appellant of standing to appeal a decision based on his
failure to participate in the process when he was unaware of that process.
In sum, this Court is persuaded by the reasoning of the Seventh, Ninth, and Tenth
Circuits, and believes that the Fifth Circuit would agree if it had an opportunity to decide the
question. The Court disagrees with the Second and Fourth Circuits. Accordingly, “[i]f a party
fails to appear at a hearing or object to a motion or proceeding, it cannot expect or implore the
bankruptcy court to address the issues raised by the motion or proceeding for a second time,” and
will lack standing to appeal that decision. In re Ray, 597 F.3d at 874. So long as a party had
proper notice of the proceedings below and of its opportunity to object to the action proposed to
be taken, a failure to appear and object before the bankruptcy court deprives that party of
standing to bring an appeal. Id.
III.

Application
Appellant does not dispute that she failed to file a proof of claim in the bankruptcy

proceedings below, and cites no authority for the proposition that she was entitled to rely on the
June 10 Plan in deciding not to do so. Further, she admits that she did not lodge any objections to
the confirmation of the Plan, which she later challenged through the motion for reconsideration
that has now been appealed to this Court. As discussed in detail above, such actions were
required in order for her to have standing on appeal.
This straightforward finding is not alone dispositive. The Court still must determine
whether the appearance and objection requirement was excused by a lack of notice of the
proceedings below and of Appellant’s opportunity to object. In particular, Appellant argues that

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she did not receive notice of the bankruptcy court’s shortening of the claims deadline from July 5
to June 1, which should therefore excuse her from appearing and objecting before the bankruptcy
court and permit her to bring this appeal.
As an initial matter, the Court notes that Appellant makes this argument in the alternative
to her legal position that an appearance and objection before the bankruptcy court were simply
not required. Appellant is forced to make this argument in the alternative because she admits that
she never filed a proof of claim and attempts to justify this failure by saying that she “relied on
[the June 10 Plan] in deciding not to file a claim in the bankruptcy before the July 5, 2016
deadline because her interests in the Dallas Lawsuit were protected by [that] proposed plan.”
Docket no. 6 at 10. Having found that she was required to appear and object before the
bankruptcy court, her primary argument fails and all that remains is the argument that she did not
have adequate notice of the bankruptcy proceedings.
These arguments are not necessarily inconsistent, though Appellant’s primary argument
certainly strains her secondary one. At the bankruptcy court’s August 1 hearing on Appellant’s
motion to reconsider, the bankruptcy court asked Mr. Hoffman whether he was arguing that
Appellant did not know about the bankruptcy case. Docket no. 451 at 73. Mr. Hoffman replied,
“No, I’m not arguing it at all . . . No. She knew about the bankruptcy case.” Id. Thus, because it
is undisputed that Appellant knew of the bankruptcy proceedings, Appellant is forced to make
the more nuanced argument that she lacked notice of the bankruptcy court’s shortening of the
claims deadline, which violates her due process rights, excuses her from appearing and objecting
before the bankruptcy court, and thus preserves her standing on appeal.
Aside from having actual knowledge of the bankruptcy proceedings, Appellant does not
dispute that she had actual knowledge of the original deadline, the proposed sale of the Dallas

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lawsuit to Vactronix, and the June 10 Plan. Bankr. Docket no. 451 at 73; Dist. Ct. Docket no. 6 at
6. By her own timeline, Appellant believed that a proof of claim needed to be filed by July 5, but
that she learned of the Second Amended Plan for the first time on July 15. Docket no. 6 at 12.
Nevertheless, Appellant did not file a proof of claim by July 5, even though she would have been
operating under the mistaken belief that she still could have timely done so.
Assuming that Appellant’s own timeline does not contradict her desire to file a proof of
claim, she was not deprived of notice of the bankruptcy proceedings in a constitutionally
deficient way that excuses her non-appearance and non-objection. “An elementary and
fundamental requirement of due process in any proceeding which is to be accorded finality is
notice reasonably calculated, under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their objections.” Mullane v.
Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). This standard applies to
notifications of claims bar dates in bankruptcy proceedings, but entails a fact-specific, case-bycase inquiry to determine whether “notice [was] reasonably calculated, given the factual
circumstances, to inform claimants of a proceeding that affects their rights.” In re Kendavis
Holding Co., 249 F.3d 383, 387–88 (5th Cir. 2001); Matter of Robintech, Inc., 863 F.2d 393, 396
(5th Cir. 1989). Particularly important, but not necessarily dispositive, is whether a creditor has
general awareness of the pending bankruptcy. Matter of Robintech, 863 F.2d at 397.
Furthermore, where a creditor has actual knowledge of the bankruptcy proceeding in time to
protect its rights, technical deficiencies in service of notices do not violate due process. Matter of
Sam, 894 F.2d 778, 781–82 (5th Cir. 1990).
On these facts, Appellant was not denied due process. It is undisputed that Appellant
knew of the bankruptcy, and indeed, Appellant had far more than a “general awareness” of the

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proceedings—at minimum, she knew of the bankruptcy proceeding, the June 10 Plan (including
the proposed sale of the Dallas lawsuit to Vactronix), and the original claims deadline. Despite
her admission that she had actual knowledge of all of these matters, Appellant never filed a proof
of claim. In addition, a certificate of mailing shows that notice of the original deadline was
mailed to Appellant at a Dallas address on March 9, 2016. Bankr. Docket no. 41 at 7. A
subsequent certificate of mailing shows that notice of the shortened claims deadline was mailed
to Appellant at the same Dallas address. Docket no. 214-1 at 8. Though Appellant argues that the
Dallas address is outdated, she does not challenge the earlier certificate of mailing, nor does she
explain how she knew of certain aspects of the case (such as the original claims deadline, notice
of which was sent to the Dallas address) but not of the shortened claims deadline (notice of
which was sent to the same address). 3 Furthermore, Appellees put forth testimony indicating that
no notices, including notice of the bankruptcy court’s shortening of the claims deadline, were
ever returned to their sender. Docket no. 451 at 58–60. 4 Finally, there is no question that Mr.
Hoffman had, at the very least, actual knowledge of the confirmation hearing for the Plan, as he
appeared at the June 10 sale hearing and requested permission to appear telephonically at the
confirmation hearing. Though the record is unclear as to what relationship Mr. Hoffman had with

3

To support her contention that notice of the shortened deadline was not reasonably calculated to notify her
of the bankruptcy proceedings and her opportunity to participate, Appellant points to testimony from yet another
lawsuit between Appellant and Debtor. See Docket no. 6 at 21 (citing Document no. 9 from Appellant’s Designation
of the Record on Appeal). The transcript recounts the examination of Appellant (defendant in that case) by Mr.
Jason Davis, counsel for Debtor (plaintiff in that case). During that examination, Appellant testified that she resides
in Austin, Texas, and provided her address. ROA 9 at 12. Appellant also said, “That is my legal residence. I have
multiple homes, as you know.” Id. at 13. Thus, Appellant’s argument goes, Debtor knew that she had a legal
residence in Austin, and should have had the notices of the bankruptcy court’s orders sent there rather than to the
Dallas address. This argument is not convincing. At most, Debtor knew that Appellant’s legal residence was in
Austin. As Appellant herself testified, though, the Austin address was not her only address.
4

At the August 1 hearing on Appellant’s motion for reconsideration, the bankruptcy court heard the
testimony of John Asel, Debtor’s former CFO. Asel testified that he received all notices that were mailed in the case,
that all notices had Mr. Bill Kingman’s address listed as the return address, and that any returned mail would go
back to Mr. Kingman. Mr. Kingman, Debtor’s attorney, represented to the bankruptcy court that despite being listed
as the return addressee on all notices that went out in the bankruptcy proceedings, he received no returned mail.

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Appellant at this stage in the proceedings, his June 10 appearance is further, albeit
circumstantial, evidence of Appellant’s intricate knowledge of the bankruptcy proceedings.
For these reasons, the Court finds that Appellant had notice of the bankruptcy
proceedings and was not deprived of due process when the bankruptcy court shortened the proof
of claims deadline from July 5 to June 1. Because Appellant did not file a proof of claim and did
not object to the confirmation of the plan, yet had notice of the bankruptcy proceedings, she
lacks standing to bring this appeal.
Conclusion
Having considered the parties’ briefs and the record, the Court AFFIRMS the decision of
the bankruptcy court and finds that Appellant lacks standing to bring an appeal in this Court.
This appeal is hereby DISMISSED.
It is so ORDERED.
SIGNED this 18th day of April, 2017.

XAVIER RODRIGUEZ
UNITED STATES DISTRICT JUDGE

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