Clean Air Car Service & Parking Branch Three, LLC v. Operr Service Bureau Inc. ( 2024 )

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ------------------------------------------------x CLEAN AIR CAR SERVICE & PARKING BRANCH THREE, LLC, CLEAN AIR CAR SERVICE & MEMORANDUM AND ORDER PARKING CORP., OPERR Case No. 1:24-cv-1088 (FB) TECHNOLOGIES, INC., OPERR SERVICE BUREAU, INC., KEVIN S. WANG, Appellants, -against- CLEAN AIR CAR SERVICE & PARKING BRANCH TWO, LLC, and OPERR PLAZA, LLC, Appellees. ------------------------------------------------x Appearances: For the Appellants: For the Appellees: KEVIN S. WANG JAY S. HELLMAN Wood Wang & Associates, PLLC THOMAS A. DRAGHI 30-50 Whitestone Expy, Ste. 402 ALEXANDRA TROIANO Flushing, NY 11354 Westerman Ball Ederer Miller Zucker & Sharfstein, LLP 1201 RXR Plaza Uniondale, NY 11556 BLOCK, Senior District Judge: Appellants ask the Court to vacate and reverse the February 8, 2024 order of the United States Bankruptcy Court for the Eastern District of New York approving the sale of the assets of the Debtor-Appellee, Operr Plaza, LLC (the “Operr Plaza Debtor”). In re: Clean Air Car Service & Parking Branch Two, LLC and Operr Plaza, LLC, Case No. 23-41937 (NHL), ECF No. 247 (Bankr. E.D.N.Y. 2023) (the “Sale Order”). They also request that the Court dismiss the bankruptcy proceeding in its entirety, sua sponte. For the following reasons, this appeal is dismissed as statutorily moot. I. The Court relayed the background of this case in its March 13, 2024 Memorandum and Order denying Appellants’ motion for a stay in Clean Air Car Serv. & Parking Branch Three, LLC v. Clean Air Car Serv. & Parking Branch Two, LLC, No. 23-CV-9495 (FB), 2024 WL 1144635, at *1 (E.D.N.Y. Mar. 13, 2024) (the “Stay Decision”).1 The Court assumes the parties’ familiarity with those facts and incorporates them herein by reference. This appeal concerns the authorized sale of the Operr Plaza Debtor’s the principal asset — an office building— to an unaffiliated bidder (the “Buyer”) for $2.5 million. 1 The Operr Plaza Debtor’s bankruptcy proceeding is being jointly administered with that of Clean Air Car Service & Parking Branch Two, LLC (the “Clean Air Two Debtor”). The bankruptcy court entered separate orders approving the sale of the assets of each Debtor and Appellants appealed both. 2 II. As the Court found in the appeal of the order approving the sale of the Clean Air Two Debtor’s assets, any appeal of the sale of the Operr Plaza’s assets is statutorily moot because the property was sold to a good-faith purchaser within the meaning of 11 U.S.C. § 363(m). The Operr Plaza Debtor’s property was sold for value, as determined by the amount an unaffiliated third-party was willing to pay in a fair, competitive auction. See In re Boston Generating, LLC, 440 B.R. 302, 324 (Bankr. S.D.N.Y. 2010) (“[Fair] sale process reflects a true test of value.”). There is no evidence in the record of any “fraudulent, collusive actions specifically intended to affect the sale price or control the outcome of the sale.” See In re Gucci, 126 F.3d 380, 390 (2d Cir. 1997). And Appellants’ already-litigated claim to maintain ownership and management rights in the Operr Plaza Debtor, see Operr Plaza, LLC v. Wang, No. 654192/2021, 2022 WL 43689, at *1 (N.Y. Sup. Ct. Jan. 03, 2022) (recognizing that Kevin Wang “no longer owns the [Operr Plaza Debtor].”), aff’d, 208 N.Y.S.3d 196 (1st Dep’t 2024), is not the type of “adverse claim” that could impinge upon the Buyer’s status as a good-faith purchaser. See Matter of RE Palm Springs II, L.L.C., 65 F.4th 752, 760 (5th Cir.) (“Adverse claims with regard to good faith purchasers implies ownership must be 3 disputed . . . the knowledge required to vitiate such a label is of defect in title or adverse claim to it.”) (cleaned up) (emphasis in original). Accordingly, this appeal is statutorily moot pursuant to § 363(m). CONCLUSION For the foregoing reasons, the appeal of the bankruptcy court order approving the sale of the Operr Plaza Debtor’s assets is DISMISSED. SO ORDERED. _/S/ Frederic Block__________ FREDERIC BLOCK Senior United States District Judge Brooklyn, New York June 24, 2024 4