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United States Court of Appeals for the Fourth Circuit
April 2, 1985, Argued ; June 20, 1985, Decided
[*1020] RUSSELL, Circuit Judge:
This is a bankruptcy case in which appellant/debtor Bernard M. Willemain (Willemain) challenges the district court's decision, which affirmed the decision of the bankruptcy court, holding that Willemain lacks standing to challenge the sale of his primary asset and that his appeal was mooted by the sale of the asset to a good faith purchaser. Finding that Willemain has no pecuniary interest in to whom the asset is sold and that the asset was sold to a good faith purchaser, we affirm.
Willemain, a real estate entrepreneur, filed a voluntary Chapter 13 bankruptcy petition on May 6, 1980. Willemain's Chapter 13 petition was dismissed in January, 1981, because he failed to demonstrate that he received a regular income, [**2] a prerequisite to maintenance of an action under that chapter. On January 6, 1981, Willemain filed a voluntary Chapter 11 reorganization petition, and he submitted the requisite schedules revealing his liabilities and assets. Willemain's liabilities amounted to $546,893.66, and his assets were valued at $1,000,589. Of the assets scheduled, Willemain valued at $1,000,000 his 20% limited partnership interest (the interest) in Chapel Associates, a real estate partnership that owns only one 93.952 acre parcel of land in Baltimore County, Maryland. Finding that Willemain was unable to effectuate a plan and that Willemain had caused unreasonable delay, the bankruptcy court converted the reorganization proceeding into a Chapter 7 liquidation proceeding on February 10, 1982. 1 Thereafter, Marc Kivitz (Kivitz) was appointed as trustee.
Kivitz privately solicited buyers for the [**3] 20% limited partnership interest, which, as an unregistered and restricted security, could not be publicly advertised for sale. Moreover, by agreement between Willemain and his general partners in Chapel Associates, the interest could not be transferred [*1021] to anyone but one who had an ownership interest in Chapel Associates. After searching for over five months, Kivitz received an offer of $100,000 from Hampshire Associates (Hampshire). 2 Hampshire held a security interest of $92,985.61 in Willemain's interest; therefore, the estate would realize $7,014.39 from the sale of the interest to Hampshire. Kivitz and Hampshire entered into an "Agreement of Sale" on August 24, 1982, subject to bankruptcy court approval, and notice of the proposed sale was sent to all of Willemain's scheduled creditors. Willemain objected to the proposed sale, contending that his interest in Chapel Associates was worth in excess of $1,400,000. 3
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
764 F.2d 1019 *; 1985 U.S. App. LEXIS 19968 **; Bankr. L. Rep. (CCH) P70,602; 12 Collier Bankr. Cas. 2d (MB) 1387; 13 Bankr. Ct. Dec. 415
David Grant Willemain, Plaintiff, and Bernard M. Willemain, Appellant v. Marc Kivitz, Trustee and Hampshire Associates, Appellees; In the Matter of Bernard Maurice Willemain, d/b/a Bernard M. Willemain & Associates a/k/a Barnard M. Willemain, Debtor
Prior History: [**1] Appeal from the United States District Court for the District of Maryland, at Baltimore. Walter E. Black, Jr., District Judge. (C/A B-83-3253).
bankruptcy court, district court, proposed sale, good faith purchaser, good faith, lack standing, moot, partnership, clearly erroneous, appraisal, parcel
Bankruptcy Law, Bankruptcy, Estate Property, Contents of Estate, Civil Procedure, Justiciability, Standing, General Overview, Administrative Powers, Estate Property Lease, Sale & Use, Modification & Reversal, Contracts Law, Personal Property, Bona Fide Purchasers, Conversion & Dismissal, Lack of Good Faith