{"id":324,"date":"2024-04-26T12:02:33","date_gmt":"2024-04-26T12:02:33","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/bankruptcy-standing-chapter-7\/"},"modified":"2024-04-29T06:34:39","modified_gmt":"2024-04-29T06:34:39","slug":"bankruptcy-standing-chapter-7","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/bankruptcy-standing-chapter-7\/","title":{"rendered":"Bankruptcy \u2013 Standing \u2013 Chapter 7"},"content":{"rendered":"\n
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Where a U.S. Bankruptcy Court judge overruled a debtor\u2019s objection to a proof of claim filed by the Massachusetts Department of Revenue, the debtor lost standing to appeal the order when his Chapter 13 case was converted to one under Chapter 7.\n<\/p>\n

Appeal dismissed for lack of jurisdiction.\n<\/p>\n

\u201cThe MDOR filed a proof of claim for unpaid taxes in the total amount of $24,031 (the \u2018MDOR Claim\u2019), consisting of a $14,933 secured claim (the \u2018Secured Tax Claim\u2019), an $8,370 priority unsecured claim, and a $726 general unsecured claim. The Debtor objected to the MDOR Claim (the \u2018Claim Objection\u2019), challenging the MDOR\u2019s classification of the Secured Tax Claim as secured. \u2026<\/p>\n

\u201cAfter the hearing, the bankruptcy court entered an order overruling the Claim Objection (the \u2018Order\u2019). \u2026\n<\/p>\n

\u201cThe First Circuit recognizes two exceptions to the general rule that only the chapter 7 trustee has standing to appeal from bankruptcy court orders affecting estate property. \u2026 \u2018First, a chapter 7 debtor may establish standing by adducing sufficient evidence to demonstrate that a successful appeal by the debtor \u2018would generate assets in excess of liabilities, entitling the debtor to a distribution of surplus\u2019 once the bankruptcy case is closed.\u2019 \u2026 \u2018Second, a chapter 7 debtor may demonstrate standing by establishing that the challenged order \u201cwould adversely affect the terms and conditions of his chapter 7 discharge.\u201d\u2019 \u2026\n<\/p>\n

\u201c\u2026 In short, the Debtor has failed to establish that reversal of the Order would result in a surplus to which he would be entitled. \u2026<\/p>\n

\u201cTurning to the second exception for establishing chapter 7 debtor standing, the Debtor has not argued \u2014 let alone demonstrated \u2014 that the Order adversely affects his chapter 7 discharge. \u2026\n<\/p>\n

\u201cBecause there are so many contingencies and variables, the Debtor cannot meet his burden of establishing that the Order has a \u2018direct\u2019 adverse impact on his pecuniary interests. \u2026\n<\/p>\n

\u201cBased on this record, the Debtor is several \u2018steps removed from any possible diminution\u2019 of his property. \u2026\n<\/p>\n

\u201cWe conclude, therefore, that any adverse financial impact that the Order may have on the Debtor is, at this juncture, purely speculative and contingent upon the occurrence of several events. \u2026 The bottom line is that the Debtor has failed to establish that he has been \u2018directly and adversely\u2019 harmed by the Order. Consequently, the Debtor is not a person aggrieved by the Order and lacks appellate standing to challenge it.\u201d\n<\/p>\n

In Re: Karamoussayan, Serge Ohannes (Lawyers Weekly No. 03-004-24) (14 pages) (Finkle, C.J.) Appealed from a decision by Bostwick, J., in the U.S. Bankruptcy Court for the District of Massachusetts. David G. Baker on brief for the appellant debtor; Stephen G. Murphy on brief for the Massachusetts Department of Revenue (BAP NO. MB 22-041) (April 11, 2024).<\/i>\n<\/p>\n

Click here to read the full text of the opinion.
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