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In re Connolly North America

April 16, 2010

IN RE CONNOLLY NORTH AMERICA, LLC, DEBTOR.
MARK H. SHAPIRO, CHAPTER 7 TRUSTEE FOR CONNOLLY NORTH AMERICA, LLC, APPELLANT,
v.
BRUCE C. FRENCH, SUCCESSOR CHAPTER 7 TRUSTEE FOR CONNOLLY NORTH AMERICA, LLC, MEDIOFACTORING, COFACE ARGENTINA, AND CURTIEMBRE ARLEI, S.A., APPELLEES.



The opinion of the court was delivered by: Hon. Gerald E. Rosen

Chapter 7

Hon. Thomas J. Tucker

OPINION AND ORDER REGARDING MOTION TO AMEND NOTICE OF APPEAL AND MOTION TO DISMISS APPEAL

At a session of said Court, held in the U.S. Courthouse, Detroit, Michigan on April 16, 2010

PRESENT: Honorable Gerald E. Rosen Chief Judge, United States District Court

I. INTRODUCTION

On October 22, 2009, Appellant Mark H. Shapiro, the former Chapter 7 trustee for the bankruptcy estate of Debtor Connolly North America, LLC, filed a notice of appeal in which he challenged the Bankruptcy Court's October 15, 2009 order granting a motion to remove him as the trustee. Two motions concerning this appeal are presently pending before the Court. First, former trustee Shapiro has filed a motion requesting that his notice of appeal be amended to accurately reflect his status as the predecessor, rather than the current, Chapter 7 trustee. Next, the successor Chapter 7 trustee, Appellee Bruce C. French, has filed a motion to dismiss the appeal, on the grounds (i) that former trustee Shapiro failed to commence this appeal in the proper capacity, and (ii) that the appointment of a successor trustee has rendered this appeal moot.

Each of these motions has been fully briefed by the parties. Having reviewed the parties' motions, briefs, and accompanying exhibits, as well as the record as a whole, the Court finds that the relevant facts and legal arguments are adequately presented in these written submissions, and that oral argument would not aid the decisional process. Accordingly, the Court will decide the two pending motions "on the briefs." See Local Rule 7.1(e)(2), Eastern District of Michigan. For the reasons stated below, the Court finds no basis for dismissing this appeal, and further concludes that the former trustee's motion to amend should be granted.

II. FACTUAL AND PROCEDURAL BACKGROUND

In November of 2001, Appellant Mark H. Shapiro was appointed the Chapter 7 trustee for the estate of Debtor Connolly North America, LLC. On July 17, 2009, creditors Mediofactoring, Coface Argentina, and Curtiembre Arlei, S.A. ("Creditors") filed a motion for the removal of Shapiro as trustee. Following a hearing, the Bankruptcy Court entered an October 15, 2009 order granting the Creditors' motion and removing Shapiro as trustee.

On October 22, 2009, Shapiro commenced the present appeal, challenging the Bankruptcy Court's order of removal. In his notice of appeal, former trustee Shapiro identified himself as "the Chapter 7 Trustee for the bankruptcy estate of Connolly North America, LLC." (See 10/22/2009 Notice of Appeal.) Following Shapiro's removal as trustee, the United States Trustee appointed Appellee Bruce C. French as successor Chapter 7 trustee for Debtor's bankruptcy estate.

Just over a month after he commenced this appeal, Shapiro filed a November 30, 2009 motion with the Bankruptcy Court, requesting that the order for his removal as trustee be stayed pending the resolution of his appeal from this order. In a December 10, 2009 order, the Bankruptcy Court denied Shapiro's motion, but nonetheless imposed a stay upon "all further proceedings in this bankruptcy case relating to the Successor Trustee's investigation and evaluation of possible claims that the bankruptcy estate may have against Mark H. Shapiro or his law firm," as well as "any investigation of any such claims by or on behalf of the Successor Trustee." (Bankr. Court 12/10/2009 Order at 1.)*fn1

On January 8, 2010, Shapiro filed a motion with this Court, seeking leave to amend his notice of appeal to accurately reflect his present status (pending the outcome of his appeal) as former Chapter 7 trustee. Successor trustee French, in turn, has filed a motion to dismiss this appeal, arguing (i) that Shapiro lacks standing to pursue an appeal in a role (Chapter 7 trustee) that he no ...


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