Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Veg Liquidation, Inc.

United States Court of Appeals, Eighth Circuit

July 26, 2019

In re: Veg Liquidation, Inc., formerly known as Allens, Inc.; All Veg, LLC, Debtors.
v.
Fifth Third Equipment Finance Company; Ryder Integrated Logistics, Inc.;International Paper Company; URS Real Estate, LP; Ball Metal Food Container, LLC; Syngenta Seeds, Inc.; Teneo Securities, LLC; Andrew Torgove; Lazard Middle Market LLC; Lazard Freres & Co. LLC; Alvarez & Marsal, North America, LLC; Alvarez & Marsal Private Equity Performance Improvement, LLC;Jonathan Hickman; Sager Creek Vegetable Company, formerly known as Sager Creek Acquisition Corp., now known as 412, Inc.; 1903 Onshore Funding, LLC;Cortland Capital Market Services, LLC; Sankaty Credit Opportunities, IV, L.P.; Sankaty Credit Opportunities, IV, L.P. (Caymanian), correctly named as, Sankaty Credit Opportunities, (Offshore Master) IV; Sankaty Middle Market Opportunities Fund, L.P.; Sankaty Middle Market Opportunities Fund, L.P. (Caymanian), correctly named as, Sankaty Middle Market Opportunities Fund, (Offshore Master), L.P.; Does 1-100; Alvarez & Marsal Holdings, LLC; 412, Inc., formerly known as Sager Creek Vegetable Company, formerly known as Sager Creek Acquisition Corp.; Sankaty Credit Opportunities, (Offshore Master) IV; Sankaty Middle Market Opportunities Fund, (Offshore Master), L.P., Appellees. R. Ray Fulmer, II, Appellant,

          Submitted: January 17, 2019

          Appeal from the United States Bankruptcy Appellate Panel for the Eighth Circuit

          Before SMITH, Chief Judge, COLLOTON and ERICKSON, Circuit Judges.

          COLLOTON, CIRCUIT JUDGE.

         R. Ray Fulmer, II, a Chapter 7 bankruptcy trustee, sued a number of parties involved in the sale of a bankruptcy estate's assets under 11 U.S.C. § 363. The bankruptcy court[1] dismissed Fulmer's claims on the ground that they were either impermissible collateral attacks on an earlier order approving the sale or without merit. The court also denied Fulmer leave to file a second amended complaint. The Bankruptcy Appellate Panel affirmed. Fulmer appeals to this court, and we affirm.

         I.

         The dispute arises from bankruptcy proceedings for Allens, Inc., an Arkansas food canning enterprise. After encountering financial difficulties, Allens filed for Chapter 11 bankruptcy in October 2013. The bankruptcy court authorized bidding procedures for the sale of substantially all of Allens's assets. Allens then moved to sell the assets under 11 U.S.C. § 363(b) and (f), which authorize the sale of a bankruptcy debtor's assets when certain conditions are met.

         Allens identified Seneca Foods Corporation as the "Stalking Horse" purchaser-that is, the potential purchaser whose opening bid would set the floor at the auction-and prepared a "stalking horse asset purchase agreement" between Allens and Seneca Foods. The bankruptcy court granted the motion for sale after notice and a hearing. Allens then served a "Notice of Bid Procedures, Sale Hearing and Objection Deadlines" for the auction on more than 5, 000 creditors and parties in interest through a noticing agent.

         The auction occurred between February 3 and 6, 2014. At the auction, a marketing firm retained by Allens estimated the net value of each bid submitted. The marketing firm ultimately valued Seneca's opening bid at approximately $117 million, whereas the unadjusted price in the stalking horse asset purchase agreement had been $148 million. Sager Creek Acquisition Corp., an entity formed by a group of second lienholders, also submitted a bid, which the marketing firm valued at $160 million. Allens ultimately deemed Sager Creek the successful bidder for the estate's assets, but the final asset purchase agreement reflected a sale price of just under $125 million. After a hearing, the bankruptcy court issued a detailed order approving the sale to Sager Creek. No appeals were taken, and the sale closed on February 28, 2014.

         Within a few months, the bankruptcy court converted the proceeding to a Chapter 7 bankruptcy and appointed Fulmer as trustee of the bankruptcy estate. Fulmer brought this action in February 2016, and filed a first amended complaint in April 2016.

         In his amended complaint, Fulmer names more than twenty defendants allegedly connected in various ways to the sale of the Allens assets. He groups them into three categories: the "Committee Defendants," who were members of the unsecured creditors committee in the Chapter 11 proceeding; the "Fiduciary Defendants," who were retained by Allens to serve as financial advisors in the proceeding; and the "Sager Creek Defendants," who held interests in Allens as second lienholders. The amended complaint asserts fourteen causes of action, all arising from the defendants' alleged conduct in connection with the sale proceedings. The defendants moved to dismiss the complaint for failure to state a claim. See Fed. R. Bankr. P. 7012(b).

         The bankruptcy court dismissed the complaint and denied as futile Fulmer's request for leave to file a second amended complaint. The court determined that Fulmer did not plead a plausible claim of fraud on the court, collusion among bidders under 11 U.S.C. § 363(n), or for post-judgment relief from the sale order under Federal Rule of Civil Procedure 60(b). The court concluded that the trustee's other claims were barred by the finality of the order approving the asset sale under § 363, and that the proposed amended complaint would be futile. The Bankruptcy Appellate Panel (BAP) affirmed.

         In an appeal from a decision of the BAP, we are a second reviewing court. We review de novo both the bankruptcy court's grant of a motion to dismiss for failure to state a claim, and the court's denial of leave to amend that rests on a legal conclusion of futility. In re Archdiocese of Saint Paul & Minneapolis, 888 F.3d ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.