By: Keith L. Abrams
St. John’s Law Student
American Bankruptcy Institute Law Review Staff
The threshold issue of standing is “an essential and unchanging part of the case-or-controversy requirement of Article III.” In In re Moran, the Sixth Circuit held that a third party appeal of a bankruptcy court order that allowed for abandonment of estate property lacked standing when the only basis for the third party’s appeal was one of an alleged loss of profit. Shortly after declaring bankruptcy, Robert Moran, debtor and a co-shareholder of Airpack, Inc., proposed an agreement with the bankruptcy trustee where the trustee would abandon Moran’s Airpack stock retroactively to the date of the filing of the bankruptcy petition provided Moran paid off all of his creditors’ claims and the bankruptcy trustee’s fees. The stock, once abandoned, pursuant to the Bankruptcy Code would return to the debtor. Thomas Stark, Moran’s co-shareholder in Airpack, Inc., who offered to purchase Moran’s stock from the bankruptcy trustee, filed objections to the abandonment on the grounds that it adversely affected his financial interests. The bankruptcy court approved the arrangement between Moran and the trustee, including the nunc pro tunc abandonment; subsequently, the decision was affirmed by the Bankruptcy Appellate Panel.