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In Re James W. Keenan, D/B/A Data v. Ross M. Pyle

December 13, 2011

IN RE JAMES W. KEENAN, D/B/A DATA PROPERTY SERVICES,
DEBTOR.
AND JAMES W. KEENAN, APPELLANT,
v.
ROSS M. PYLE, ET AL., APPELLEES.



Bankruptcy Case No: 96-00871-PB

The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER AFFIRMING JUDGMENT DISMISSING APPEAL OF BANKRUPTCY COURT

Debtor/Appellant James W. Keenan appeals the bankruptcy court's August 4, 2010 order granting the liquidating trustee's motion for an order: (1) approving final plan distribution; (2) discharging trustee and exonerating and canceling bonds; and (3) closing the case. In addition, Debtor/Appellant appeals the bankruptcy court's August 4, 2010 orders approving: (1) the thirtieth and final fee application of Ross Pyle, trustee; (2) the thirtieth and final fee application of Procopio, Cory, Hargreaves & Savitch, attorneys for the trustee; (3) the twenty-fifth and final fee application of Butz, Dunn & DeSantis, special counsel for liquidating trustee; and (4) the twenty-eighth and final fee application of Lamb & Meyer, accountants for liquidating trustee. For the reasons explained herein, the judgment of the Bankruptcy Court is AFFIRMED, and the appeal is DISMISSED.

BACKGROUND

Appellant/Debtor James W. Keenan doing business as Data Property Services ("Appellant") filed a voluntary Chapter 11 bankruptcy case in 1996. Appellee Ross M. Pyle ("Trustee") was appointed as the Chapter 11 Trustee and is currently the duly appointed liquidating trustee of the estate. By uncontested order dated May 13, 1998, the bankruptcy court confirmed the Joint Plan of Reorganization ("Plan") created by the Statutory Committee of Unsecured Creditors and the then Chapter 11 trustee Mr. Pyle.

Under the terms of the Plan, Appellant is entitled to "all residual interest in the Estate." [Record on Appeal ("ROA") at 1942.] However, the Plan provides three specific "condition[s] precedent to the transfer or Distribution of any residual interest." [Id.] First, the Plan mandates that "any and all claims of any kind and nature shall [sic] covered under Article XVB . . . have been resolved by final order of the Bankruptcy court." [Id.] Second, "all indemnification obligations pursuant to Article XVIIC shall have been satisfied." [Id.] Third, "the Liquidating Trustee shall have noticed his intention to close the Case to all classes of creditors and interest . . . ." [Id.] The first condition precedent is at issue in this appeal.

Article XV.B.2 of the Plan provides:

Following the Liquidating Trustee's distribution of all remaining assets to all Allowed Claims and prior to any distribution to (a) [Appellant] and (b) an order closing the case, any and all unreleased claims of any kind or nature, if any, against the Trustee, are to be resolved by final order of the Bankruptcy Court. [ROA at 1955.] This provision requires the Trustee to resolve any unreleased claims prior to closing the case and distributing the remaining interest in the estate to the debtor. After the Trustee has resolved these unreleased claims, only then may he "request an order closing the case, discharging the Liquidating Trustee and exonerating the Liquidating Trustee's bond." [Id.]

The parties appear to dispute the time when all the creditors were paid, but they appear to agree that they were all paid by at least late 2000. [Doc. No. 20 at 9; Doc. No. 26 at 20.] In an effort to resolve any remaining claims against him, the Trustee moved for an order in aid of closure on November 16, 2001, [ROA at 536-664], which was denied by the bankruptcy court on December 17, 2001. [Id. at 669.] On September 30, 2002, Appellant moved for the return of the residual estate, [id. at 1291-99], but it was denied by the bankruptcy court on November 11, 2002. [Id. at 1413-14.]

On April 16, 2003, the Trustee moved for another order in aid of closure of the estate, [ROA at 1415-1636], which the bankruptcy court granted on June 9, 2003. [Id. at 1663-66.] Appellant appealed the June 3, 2003 order granting the Trustee's motion to this District Court, and the Court affirmed the bankruptcy court's order in full and dismissed the appeal with prejudice. See In re Keenan, No. 03-cv-1472 (S.D. Cal., Order filed June 30, 2004). [ROA at 1845-61.] Appellant then appealed the order to the Ninth Circuit, which dismissed the appeal. See In re Keenan, No. 04-56242 (9th Cir., Order filed Dec. 28, 2004). In facilitating the bankruptcy court's June 9, 2003 order to resolve any remaining claims, the bankruptcy court issued further orders in February 2004, September 2004, December 2004, and June 2005. [ROA at 1997-2015.]

On June 30, 2006, Appellant along with his wife filed a complaint in an adversary proceeding against the Appellees*fn1 asserting claims for RICO violations, breach of fiduciary duty, civil rights violations, declaratory relief, breach of contract, negligence, and injunctive relief. See Keenan v. Pyle, Adv. Proc. No. 06-90341-B11 (Bankr. S.D. Cal., filed June 30, 2006). On February 9, 2007, the bankruptcy court dismissed the complaint with prejudice. See id. (Order filed Feb. 9, 2007). Appellant appealed the bankruptcy court's dismissal to this District Court, and the Court affirmed the bankruptcy court's dismissal on the grounds that Appellant's claims were barred by quasi-judicial immunity. See In re Keenan, 2008 U.S. Dist. LEXIS 25064, at *13-20 (S.D. Cal. Mar. 28, 2008). Appellant then appealed to the Ninth Circuit, which affirmed the bankruptcy court's dismissal of Appellant's claims on the same grounds. See In re Keenan, 339 Fed. Appx. 809, 810-11 (9th Cir. 2009). Appellant then filed a petition for writ of certiorari, which was denied by the Supreme Court on January 11, 2010. See Keenan v. Pyle, 130 S. Ct. 1078 (2010).

Shortly after, on June 9, 2010, the Trustee filed a motion before the bankruptcy court for an order: (1) approving final plan distribution; (2) discharging trustee and exonerating and canceling bonds; and (3) closing the case. [ROA at 1866-2015.] The bankruptcy court granted the Trustee's motion on August 4, 2010. [Amended Record on Appeal ("A-ROA") at 3881-88.] On August 4, 2010, the bankruptcy court also issued orders approving: (1) the thirtieth and final fee application of Ross Pyle, Trustee; (2) the thirtieth and final fee application of Procopio, Cory, Hargreaves & Savitch, attorneys for the Trustee; (3) the twenty-fifth and final fee application of Butz, Dunn & DeSantis, special counsel for the Trustee; and (4) the twenty-eighth and final fee application of Lamb & Meyer, accountants for the Trustee. [Id. at 3873-80]

Appellant appeals the bankruptcy court's August 4, 2010 orders. [Doc. No. 1, Notice of Appeal.] Appellant seeks: (1) reversal of the bankruptcy court's fee awards and the disgorgement of all professional fees that were incurred by the Appellees after payment of all the creditors; (2) reversal of the bankruptcy court's order indemnifying the Appellees from any potential claims; and (3) reversal of ...


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