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Timothy J. Sheehan and Barbara E. Sheehan v. andrea Dobin

April 28, 2011


The opinion of the court was delivered by: Wolfson, United States District Judge:



Appellants Timothy J. Sheehan and Barbara E. Sheehan ("Appellants" or "the Sheehans"), proceeding pro se, appeal an Order of the Honorable Raymond T. Lyons, United States Bankruptcy Judge, dated August 25, 2010 ("Order"), granting Andrea Dobin, the Chapter 7 Trustee ("Appellee" or the "Trustee"), the authority to sell real property of the estate -- commonly known as Lots 16, 17 and 18 in Block 2102, Princeton Township, Mercer County, New Jersey ("the Lots") -- free and clear of certain liens, claims and encumbrances. This Court has appellate jurisdiction to review the decision of the Bankruptcy Court pursuant to 28 U.S.C. § 158(a). For the reasons that follow, the Court affirms the decision of the Bankruptcy Court.


The instant appeal relates to a Chapter 11 Petition for bankruptcy that was filed by Eight Bulls, L.P. ("Eight Bulls" or "Debtor") on July 27, 2009 (the "Petition"). The Petition was signed by Timothy J. Sheehan as the authorized partner of Debtor. Schedule A to the Bankruptcy Petition reflected that Eight Bulls was the owner of the Lots. Indeed, as of the Petition date, the last recorded deed for the Lots demonstrated that the Debtor was the record owner. On January 29, 2010, the Debtor's bankruptcy proceeding was converted to one under Chapter 7 of the Bankruptcy Code. On that same date, Appellee was appointed to serve as the Chapter 7 Trustee.

Thereafter, in late April 2010, the Trustee began the process of selling the Lots for the benefit of the bankruptcy estate. The Trustee retained Prudential Fox & Roach Realtors to market the Lots. Subsequently, on June 23, 2010, the Trustee filed a motion in Bankruptcy Court to sell the Lots via private sale (the "Sale Motion"). The Sheehans objected to the Sale Motion.

The Bankruptcy Court held hearings on July 28, 2010 and August 25, 2010 on the Sale Motion. The Trustee called three witnesses to testify in support of her Motion and, on the first day of hearings, Mr. Sheehan cross-examined each witness. However, the Sheehans did not call any witnesses to testify on either of the hearing days. Following the August 25, 2010 hearing, the Bankruptcy Court granted the Trustee's Sale Motion. Specifically, the Bankruptcy Court found that the offer made by the Purchaser for $2,120,000 was "the highest and best offer for the real property located at Lots 16, 17 and 18, Block 2102. . . .and the sale price for the Property constitutes full and adequate consideration and reasonably equivalent value for the Property." Bankruptcy Court Order dated August 25, 2010 ("Sale Order"). In addition, the Court found that the transaction "proposed by the Trustee was negotiated at arm's length and in good faith," and that the Buyer was "a good faith purchaser for value" as defined by the Bankruptcy Code. Id. As a result, Judge Lyons entered an Order, in relevant part, approving the sale of the Lots to the Buyer free and clear of the interests of the Sheehans.

Thereafter, the Sheehans filed a Notice of Appeal from Bankruptcy Court, and, subsequently, a Motion to Stay Pending Appeal. Because the Court affirms the decision of the Bankruptcy Court in its entirety, the request for the stay is denied.


When reviewing a bankruptcy court's decision, the standard of review is determined by the nature of the issues presented on appeal. In particular, factual determinations reviewed on appeal should not be set aside unless found to be "clearly erroneous." In re Continental Airlines, 150 B.R. 334, 336 (D.Del.1993) (citing Bankruptcy Rule 8013 and In re Morissey, 717 F.2d 100, 104 (3rd Cir.1983)). A factfinder, rather than a reviewing body, is generally in a better position to make judgments about the reliability of evidence; specifically, the reviewing body only acts pursuant to a written record, while the factfinder is able to evaluate the credibility of a live witness. See Concrete Pipe & Prods. v. Constr. Laborers Pension Trust, 508 U.S. 602, 113 S.Ct. 2264, 2280, 124 L.Ed.2d 539 (U.S.1993). In turn, review of facts under the "clearly erroneous" standard is significantly deferential and requires a "definite and firm conviction that a mistake has been committed." Id. Conversely, legal conclusions from the bankruptcy court "are subject to plenary review by the district court and are considered de novo on appeal." Continental, 150 B.R. 334 at 336. Mixed findings of fact and conclusions of law must be broken down, and the applicable standards-"clearly erroneous" or de novo-must be appropriately applied to each component. Meridian Bank v. Alten, 958 F.2d 1226, 1229 (3d Cir.1992) (citing In re Sharon Steel Corp., 871 F.2d 1217, 1222 (3d Cir.1989) and Universal Minerals, Inc. v. C.A. Hughes & Co., 669 F.2d 98, 102-03 (3d Cir.1981)).


Initially, the Court notes that in their Statement of Issues to be Presented on Appeal, Appellants set forth ten issues for this Court's consideration. However, the Sheehans' entire Appellate Brief comprises four paragraphs and does not in any conceivable way address the entirety of the issues presented for appeal.*fn1 Moreover, the issues that are considered in Appellants' brief are addressed so minimally, that the Court has been left to guess at the basis for this appeal. However, to the extent that the Court understands the minimal arguments set forth in their Brief, Appellants appear to contest both the manner of the sale as well as the outcome of the sale.

First, Appellants appear to contend that the Trustee's decision to hold a private sale, rather than a public sale, does not meet the Trustee's duty to administer the estate in way to designed to obtain the highest value for the Lots. Appellants' Brief at 5-6. In addition, Appellants appear to take issue with the Trustee's decision not to use an appraisal to determine whether the full value was received for the Lots. Id. The Court does not agree.

Section 363 of the Bankruptcy Code allows the Trustee "after notice and a hearing [to] use, sell, or lease, other than in the ordinary course of business, property of the estate." 11 U.S.C. § 363(b)(1). In order for the proposed sale to be proper, the Trustee must "satisfy [his] fiduciary duty to the debtor, creditors and equity holders, [by articulating some] business justification for using, selling, or leasing the property outside the ordinary course of business." In re Continental Air Lines, Inc., 780 F.2d 1223, 1226 (5th Cir.1986). Moreover, great judicial deference is given to the Trustee's ...

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