SW Legal studies in Business

Parties Financially Impacted by Bankruptcy Court Decisions Have Standing to Intervene
Description Appeals court held that under the person aggrieved doctrine, parties who are directly affected by the decision of a bankruptcy court, because they suffer a financial loss, have standing to intervene to appeal the decision of a trustee or bankruptcy court.
Topic Bankruptcy
Key Words Standing; Person Aggrieved Doctrine
C A S E   S U M M A R Y
Facts Westwood Community Two Association is a homeowners' association in Tarmac, Florida. All homeowners in Westwood are members of the Association, which maintains a clubhouse and swimming pool for its members. Westwood filed for bankruptcy after three claimants were awarded over $1 million in compensatory and punitive damages for age discrimination in violation of the federal and Florida Fair Housing Acts. Having almost no assets, Westwood filed Chapter 7 bankruptcy. The trustee assessed each homeowner $7,250 to cover the judgment and warned homeowners that liens would be placed on their property if they did not pay. Some homeowners objected and formed a committee to challenge the trustee's action. The bankruptcy court and district court dismissed the adversarial proceeding they filed, holding that they lacked standing to intervene in the matter. Homeowners appealed.

Reversed. Under the person aggrieved doctrine, only a person aggrieved has standing to appeal a bankruptcy court's order. The homeowners are aggrieved persons as the court orders directly and adversely affect them financially. Hence, they must be allowed to appeal the bankruptcy court's order upholding the trustee's decision.

Citation In re: Westwood Community Two Association, Inc., 293 F.3d 1332 (11th Cir., 2002)

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