NexPoint Advisors v. Pachulski Stang

Case: 22-10575 Document: 00516826622 Page: 1 Date Filed: 07/19/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
____________ FILED
July 19, 2023
No. 22-10575 Lyle W. Cayce
____________ Clerk
In the Matter of Highland Capital Management, L.P.
Debtor,
NexPoint Advisors, L.P., Appellant/Creditor/Party in
Interest 11 U.S.C. 1109(b),
Appellant,
versus
Pachulski Stang Ziehl & Jones, L.L.P.,
Appellee/Retained Professional; Wilmer Cutler
Pickering Hale and Dorr, L.L.P.; FTI Consulting,
Incorporated; Teneo Capital, L.L.C.; Sidley Austin,
L.L.P.,
Appellees,
_____________
NexPoint Advisors, L.P.,
Appellant,
versus
Wilmer Cutler Pickering Hale and Dorr, L.L.P.,
Appellee,
_____________
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NexPoint Advisors, L.P.,
Appellant,
versus
Teneo Capital, L.L.C.,
Appellee,
_____________
NexPoint Advisors, L.P.,
Appellant,
versus
Sidley Austin, L.L.P.,
Appellee,
_____________
NexPoint Advisors, L.P.,
Appellant,
versus
FTI Consulting, Incorporated,
Appellee.
______________________________
Appeal from the United States District Court
for the Northern District of Texas
USDC Nos. 3:21-CV-3086, 3:21-CV-3088,
3:21-CV-3094, 3:21-CV-3096,
3:21-CV-3104
______________________________
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Before Higginbotham, Southwick, and Willett, Circuit Judges.
Patrick E. Higginbotham, Circuit Judge:
The bankruptcy court, administering a complex bankruptcy,
dismissed NexPoint Advisors, LP’s objection to professional fees paid to
myriad organizations. NexPoint appealed to the district court, sitting as an
appellate court. The district court dismissed for lack of standing to appeal.
NexPoint appeals. We AFFIRM.
I.
Highland Capital Management filed for bankruptcy under 11 U.S.C.
§ 301 in October 2019 in Delaware. The following month, the Delaware
bankruptcy court issued an Order Establishing Procedures for Interim
Compensation and Reimbursement of Expenses of Professionals, providing a set
of procedures for professionals involved in the bankruptcy to seek payment,
and for other related parties to challenge their applications. The order reads
in relevant part:
Neither (i) the payment of or the failure to pay, in whole or in
part, interim compensation and/or reimbursement of or the
failure to reimburse, in whole or in part, expenses under the
Interim Compensation Procedures nor (ii) the filing or failure
to file an Objection will bind any party in interest or the Court
with respect to the final allowance of applications for payment
of compensation and reimbursement of expenses of
Professionals. All fees and expenses paid to Professionals
under the Interim Compensation Procedures are subject to
disgorgement until final allowance by the Court.
On the same day, the Delaware bankruptcy court transferred the bankruptcy
to the bankruptcy court of the Northern District of Texas.
By February 2021, the Texas bankruptcy court had approved the
Debtor’s reorganization plan and granted related relief, providing in part that
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final professional fee claims were to be filed within 60 days. Five
organizations timely did so: (i) Pachulski Stang Ziehl & Jones, LLP
(“PSZJ” 1), (ii) Wilmer Cutler Pickering Hale & Dorr (“WilmerHale” 2 and,
together with PSZJ, the “Debtor’s Professionals”), (iii) Sidley Austin, LLP
(“Sidley” 3), (iv) FTI Consulting, Inc. (“FTI” 4), and (v) Teneo Capital,
LLC (“Teneo” 5 and, with FTI and Sidley, the “Committee Professionals”
and, with the Debtor’s Professionals, the “Appellees”).
NexPoint timely objected, urging “failure to properly serve the Final
Applications and provide notice of the applicable objection deadline(s)
thereto” as established by the bankruptcy court’s order. NexPoint also
requested leave to supplement the record if an extra inspection found
additional grounds for opposition. The Debtor’s Professionals and the
Committee’s Professionals filed their respective replies.
At the Final Fee Hearing, the bankruptcy court denied NexPoint’s
requests for discovery and review. The bankruptcy court first took issue with
the timing of NexPoint’s objections and request. Conceding that “no one is
bound by an interim fee approval order,” the court expressed its concerns
that NexPoint objected “at the end of the case,” observing that “now we
need much more time because there’s so much to review [requiring] a fee
examiner.” Turning to the merit of the objection, the judge observed:
The fees are high, but they’re not eye-popping. They’re not
Purdue Pharma. They’re not Boy Scouts. They’re not PG&E.
_____________________
1
Debtor’s general bankruptcy counsel.
2
Debtor’s regulatory and compliance counsel.
3
Counsel to the Official Committee of Unsecured Creditors in Debtor’s
bankruptcy (the “Committee”).
4
The Committee’s financial advisor.
5
The Committee’s litigation advisor.
4
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You know, for a case where there were well over a billion
dollars of claims asserted, if they in the aggregate are
approaching $50 million, I’m not terribly surprised, given what
I’ve seen.
The bankruptcy judge orally approved Appellees’ fee applications at the
hearing and entered the five final orders approving the fee applications days
later. NexPoint timely appealed to the district court.
After consolidating the appeals, the district court dismissed
NexPoint’s challenge for lack of appellate standing in bankruptcy appeals.
First, the district court rejected NexPoint’s challenge to this Court’s
“aggrieved person” standard and concluded that NexPoint lacked standing
by that standard despite its administrative fee claims and status as a
defendant in an adversary proceeding. The district court then rejected
NexPoint’s alternative argument that, the “person aggrieved” standard
aside, it had standing to appeal the orders under Sections 330 and 1109 of the
bankruptcy code and dismissed the appeal for lack of jurisdiction. This appeal
followed.
II.
NexPoint forwards several arguments in support of its standing to
challenge the district court’s orders: (1) that its status as a defendant in a
related adversary proceeding confers standing under the “person aggrieved”
test; (2) that prudential standing considerations such as the “person
aggrieved” standard did not survive Lexmark Int’l, Inc. v. Static Control
Components, Inc., 6 and that it meets traditional Article III standing
requirements; (3) that by a prior ruling of this Court, the “person aggrieved”
standard is more capacious than its application here and confers NexPoint
_____________________
6
572 U.S. 118 (2014).
5
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standing to seek review of the challenged orders; and (4) that related
bankruptcy provisions confer standing. 7 None persuade.
A.
“In ruling on a motion to dismiss for want of standing, both the trial
and reviewing courts must accept as true all material allegations of the
complaint, and must construe the complaint in favor of the complaining
party.” 8 “Standing is a question of law that we review de novo.” 9
“Bankruptcy courts are not authorized by Article III of the
Constitution, and as such are not presumptively bound by traditional rules of
judicial standing.” 10 Rather, standing was governed by statute, which read:
“A person aggrieved by an order of a referee may . . . file with the referee a
petition for review . . . .” 11 Congress expressly removed this provision when
it enacted the Bankruptcy Code in 1978. 12 Despite its removal, we have
affirmed that the “person aggrieved” test continues to govern standing in
bankruptcy proceedings. 13
_____________________
7
NexPoint presents its arguments in a different order and using different
organizational headings. However, we disentangle these arguments to evaluate and
adjudicate them based on the separate legal principles and considerations each engenders.
8
In re Coho Energy Inc., 395 F.3d 198, 202 (5th Cir. 2004) (quoting Rohm & Hass
Tex., Inc. v. Ortiz Bros. Insulation, Inc., 32 F.3d 205, 207 (5th Cir. 1994)).
9
Matter of Technicool Sys., Inc. (In re Technicool), 896 F.3d 382, 385 (5th Cir. 2018)
(citing Fortune Nat. Res. Corp. v. U.S. Dep’t of Interior, 806 F.3d 363, 366 (5th Cir. 2015)).
10
In re Coho, 395 F.3d at 202 (citing Rohm, 32 F.3d at 210 n.18).
11
Id. (quoting 11 U.S.C. § 67(c) (1976) (repealed 1978)).
12
See id.13
See id. (citing Rohm, 32 F.3d at 210 n.18).
6
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The test—which we have repeatedly described as “‘more exacting’
than the test for Article III standing” 14—holds that an appellant must show
it was “directly and adversely affected pecuniarily by the order of the
bankruptcy court.” 15 “In essence, bankruptcy standing requires ‘a higher
causal nexus between act and injury’” than traditional standing, 16 one that
we have repeatedly deployed 17 and that best deals with the unique posture of
bankruptcy actions:
Bankruptcy cases often involve numerous parties with
conflicting and overlapping interests. Allowing each and every
party to appeal each and every order would clog up the system
and bog down the courts. Given the specter of such sclerotic
litigation, standing to appeal a bankruptcy court order is, of
necessity, quite limited. 18
NexPoint pointed to two different sources of “aggrievement”: (1) its
administrative claim, and (2) its role as a defendant in a pending adversary
_____________________
14
In re Technicool, 896 F.3d at 385 (quoting Matter of Delta Produce, L.P., 845 F.3d
609, 619 (5th Cir. 2016)).
15
Id. (emphasis added) (quoting Fortune Nat. Res., 806 F.3d at 366); see also Dean
v. Seidel (In re Dean), 18 F.4th 842, 844 (5th Cir. 2021) (observing that bankruptcy standing
“is an even more exacting standard than traditional constitutional standing” (quoting
Fortune Nat. Res., 806 F.3d at 366)); In re Coho, 395 F.3d at 203 (using identical “more
exacting” language).
16
In re Technicool, 896 F.3d at 385–86 (quoting Fortune Nat. Res., 806 F.3d at 366).
17
See, e.g., In re Coho, 395 F.3d at 202–04 (using the “person aggrieved” standard);
Di Ferrante v. Young (In re Young), 416 F. App’x 392, 399 (5th Cir. 2011) (unpublished) (per
curiam) (using this “high bar for standing” vis-à-vis Di Ferrante); Schum v. Zwirn Special
Opportunities Fund LP (In re Watch Ltd.), 257 F. App’x 748, 749–50 (5th Cir. 2007)
(unpublished) (per curiam) (evaluating an appellant’s standing under the same test).
18
In re Technicool, 896 F.3d at 385 (emphasis added).
7
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proceeding. 19 Regarding the administrative claim, the district court reasoned
that because it was “extremely remote” that NexPoint’s claim would not be
paid, NexPoint lacks standing because its theory of harm is too remote or
speculative. And regarding the adversary proceedings, the district court
concluded that because this pertains to a separate proceeding, “[a]t most,
[NexPoint] could be indirectly impacted by the Fee Application Orders, but
only if [NexPoint] was to be found liable in the Adversary Proceeding,”
meaning the harm was again too “speculative” and “not sufficient to confer
standing.” 20 The able district court’s assessments are sound.
The bankruptcy court disallowed NexPoint’s administrative expense
claim, denying it recovery from the Debtor’s bankruptcy estate. This alone
takes the legs from NexPoint’s argument, for if it is not entitled to
administrative expenses the payout of professional expenses to others cannot
impact its finances. Accepting this reality, it shifts gears, observing that
“[a]lthough [the district court’s] holding[] [is] incorrect, NexPoint’s
arguments here will focus principally on the Adversary Proceeding.”
Turning then to the adversary proceeding, NexPoint fares no better.
As there is at present no judgment or order or process to require NexPoint to
pay any fees as a result of the adversary proceeding, “the speculative
prospect of harm is far from a direct, adverse, pecuniary hit,” 21 particularly
so when such a harm would be felt indirectly via a separate proceeding. 22
_____________________
19
Notably, NexPoint also relied upon their prepetition claims, but, as the district
court observed, “all of [them] have been either expunged or withdrawn,” meaning
arguments relying thereupon are effectively moot.
20
Emphases added.
21
In re Technicool, 896 F.3d at 386.
22
See id. at 384 (“Furlough’s indirect interest in the order fails to meet the strict
requirements for bankruptcy standing.”).
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Indeed, as Appellees’ counsel observed at oral argument, no less than seven
different “ifs” must come to pass for the bankruptcy’s order in this action to
impact NexPoint. 23 And the adversary proceeding upon which those “ifs”
rest has since been stayed, further diminishing the likelihood NexPoint will
be harmed by the bankruptcy court orders. 24 In sum, NexPoint fails to
establish that the adversary proceeding “directly, adversely, and financially
impact[s]” it beyond anything other than mere speculation. 25
B.
NexPoint then pivots, urging that the “person aggrieved” standard
did not survive the Supreme Court’s Lexmark decision. We disagree.
Lexmark addressed standing in false advertising claims under the Lanham
Act. 26 The Supreme Court reminded that courts may not “limit a cause of
action that Congress has created merely because ‘prudence’ dictates.” 27
NexPoint runs with this language, arguing that it nullifies the “person
aggrieved” test for prudential standing in bankruptcy actions.
_____________________
23
As represented at oral argument, these “ifs” include: (1) certain related parties
filing certain claims against parties related to NexPoint; (2) a different court proceeding to
adjudicate those claims, (3) that proceeding resulting in a judgment against the related
entities; (4) a separate proceeding to determine that NexPoint is an alter-ego of those
entities against whom the judgment was entered; (5) the court then ruling to include fees
from this bankruptcy case in that judgment; (6) the same court concluding that NexPoint
is foreclosed from arguing the reasonableness of these fees; and (7) additional courts
unanimously upholding these decisions.
24
See Notice of Supplemental Authority at 1, NexPoint Advisors v. Pachulski Stang
et al., No. 22-10575 (5th Cir. Apr. 19, 2023) (Dkt. No. 84).
25
In re Dean, 18 F.4th at 844 (quoting In re Technicool, 896 F.3d at 384).
26
See generally 572 U.S. 118.
27
Id. at 128.
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But it is settled that “[f]or a Supreme Court decision to override a
Fifth Circuit case, the decision must unequivocally overrule prior precedent;
mere illumination of a case is insufficient,” 28 that “an intervening change in
the law [cannot be] a mere ‘hint’ of how the [Supreme] Court might rule in
the future.” 29 Yet Lexmark focuses solely on standing under the Lanham
Act, 30 and the year after Lexmark was decided, we expressly held in Superior
MRI Services Inc. v. Alliance Healthcare Services, Inc. that Lexmark “deals only
with the zone-of-interests test and not with the requirement that a party
assert its own rights.” 31 In other words, this Court found Lexmark to reach
only circumstances analogous to those at issue in Lexmark, rather than
broadly modifying—or undermining—all prudential standing concerns, such
as the one animating the “person aggrieved” standard in bankruptcy appeals.
And post-Lexmark, this Court has repeatedly reaffirmed the “person
aggrieved” standard in analogous situations, implicitly affirming its life post-
Lexmark. 32
_____________________
28
Gahagan v. U.S. Citizenship & Imm. Servs., 911 F.3d 298, 302 (5th Cir. 2018)
(emphasis added) (quoting United States v. Petras, 879 F.3d 155, 164 (5th Cir. 2018)); see
also Carter v. S. Cent. Bell, 912 F.2d 832, 840 (5th Cir. 1990) (requiring adherence to a prior
panel’s interpretation “unless that interpretation is irreconcilable with” a later Supreme
Court decision).
29
Hines v. Quillivan, 982 F.3d 266, 271 (5th Cir. 2020) (second alteration in
original) (quoting United States v. Alcantar, 733 F.3d 143, 146 (5th Cir. 2013)); Petras, 879
F.3d at 164 (holding that “mere illumination of a case is insufficient” to abrogate our circuit
precedent).
30
See generally 572 U.S. 118.
31
778 F.3d 502, 506 (5th Cir. 2015) (emphasis added).
32
See Azby Fund v. Wadsworth Ests., L.L.C., No. 22-30092, 2022 WL 17582273, at
*2 (5th Cir. Dec. 12, 2022) (unpublished) (per curiam) (“Typically, ‘[t]o determine
whether a party has standing to appeal a bankruptcy court order, this court uses the
“person aggrieved” test.’” (quoting In re Dean, 18 F.4th at 844) (alteration in original));
In re Mar. Commun./Land Mobile L.L.C., 745 F. App’x. 561, 562 (5th Cir. 2018)
(unpublished) (per curiam) (citing and deploying the “person aggrieved” test); Kingdom
10
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We are yet to address directly the “person aggrieved” standing in
light of Lexmark. Superior MRI concerned a contractual claim following a
Chapter 7 bankruptcy rather than a district court’s appellate review of a
bankruptcy court order, and other published precedent has not explicitly
addressed this argument. 33 As Superior MRI’s reasoning applies with equal
force and certitude here, we do so now: Lexmark does not expressly reach
prudential concerns in bankruptcy appeals and brought no change relevant
here. 34
C.
NexPoint also argues that the current law of “person aggrieved” is
unsound, pointing to this Court’s 1995 decision in Cajun Electric Power
Cooperative v. Central Louisiana Electric Cooperative. 35 There, we held: “To
have standing to appeal a bankruptcy order, a party must show that it was
_____________________
Fresh Produce, Inc. v. Stokes Law Office, L.L.P. (In re Delta Produce, L.P.), 845 F.3d 609, 619
(5th Cir. 2016) (same); Fortune Natural Res., 806 F.3d at 366 (same).
33
See Matter of Highland Cap. Mgmt., L.P., 57 F.4th 494, 501 (5th Cir. 2023)
(affirming that “[t]his circuit uses the ‘person aggrieved’ standard to determine whether a
party has standing to appeal a bankruptcy court order” without discussing Lexmark
(citation omitted)); In re Dean, 18 F.4th at 844; In re Technicool, 896 F.3d at 385–86; Lejeune
v. JFK Capital Holdings, L.L.C. (In re JFK Capital Holdings, L.L.C.), 880 F.3d 747, 751 (5th
Cir. 2018) (stating that “[w]e use the ‘person aggrieved’ test to determine whether a party
has standing to appeal an order of the bankruptcy court” without discussing Lexmark
(citation omitted)).
34
As well, among a series of Rule 28(j) letters, Appellant points us to, inter alia, a
recent Ninth Circuit case that appears to deploy Article III standing as the threshold
jurisdictional hurdle before resorting to the “person aggrieved” standard. Letter, No. 22-
10575 (5th Cir. June 20, 2023) (Dkt. No. 92); see Matter of E. Coast Foods, Inc., 66 F.4th
1214, 1218 (9th Cir. 2023) (citing Susan B. Anthony List v. Driehaus, 573 U.S. 149, 167
(2014)). It is not offended by the more exacting “person aggrieved” metric attending the
disposition of bankruptcy claims like the one at issue.
35
Matter of Cajun Elec. Power Co-op., Inc., 69 F.3d 746 (5th Cir. 1995) (“Cajun
Electric”), opinion withdrawn in part on reh’g, 74 F.3d 599 (5th Cir. 1996).
11
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‘directly and adversely affected pecuniarily by’ the order or that the order
diminished its property, increased its burdens, or impaired its rights.” 36
NexPoint focuses on the disjunctive “or” and the latter clause—which, by
its text, allows for appeals absent monetary harm—arguing that later
iterations inappropriately distorted the standard for bankruptcy standing by
requiring such a financial detriment. Appellees counter: (1) NexPoint failed
to raise this argument to the district court, forfeiting it; and (2) adopting
arguendo the Cajun Electric standard, NexPoint still fails to meet this
threshold.
“An argument not raised before the district court cannot be asserted
for the first time on appeal.” 37 This, of course, remains true in bankruptcy
appeals, where this Court “[a]ct[s] as a ‘second review court.’” 38 NexPoint
replies that it lacked an opportunity to raise its Cajun Electric argument
below. True, in the Motion to Dismiss stage, Appellees focused on
NexPoint’s general unsecured and administrative expenses to argue that
NexPoint lacked standing. But in response NexPoint relied on the adversary
proceeding to establish that it had standing and made the same argument
regarding Lexmark’s effect on the “person aggrieved” as well as its argument
_____________________
36
Id. at 749 (emphasis added).
37
HSBC Bank USA, N.A. v. Crum, 907 F.3d 199, 207 (5th Cir. 2018) (quoting XL
Specialty Ins. Co. v. Kiewit Offshore Servs., Ltd., 513 F.3d 146, 153 (5th Cir. 2008)).
38
Matter of Lopez, 897 F.3d 663, 668 (5th Cir. 2018) (quoting Official Comm. of
Unsecured Creditors v. Moeller (In re Age Ref., Inc.), 801 F.3d 530, 538 (5th Cir. 2015)); see
also Ries v. Paige (In re Paige), 610 F.3d 865, 871 (5th Cir. 2010) (“As we generally do not
consider arguments raised for the first time on appeal, [the appellant’s] argument is
waived.”); Crosby v. OrthAlliance New Image (In re OCA, Inc.), 552 F.3d 413, 424 (5th Cir.
2008) (“A thorough review of the record confirms that [the appellant] did not raise the
issue of assignment in the bankruptcy court. At oral argument, [the appellant] also admitted
that it had not raised the assignment issue below. Since this issue was not properly
presented to the bankruptcy court, it cannot be raised now for the first time on appeal.”).
12
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regarding the “zone of interests” delineated in 11 U.S.C. §§ 330 and 1109(b),
to which we will turn. By failing to raise the Cajun Electric argument
simultaneously, NexPoint waived its right to do so here.
D.
Finally, NexPoint argues that Bankruptcy Code §§ 330 & 1109 confer
appellate standing. 39 We disagree. Section 1109(b) provides that “[a] party in
interest, including . . . a creditor . . . may raise and may appear and be heard
on any issue in a case under this chapter.” 40 In lay terms, § 1109(b) speaks to
one’s standing to appear and be heard before the bankruptcy court, a concept
distinct from standing to appeal the merits of a decision. As other courts have
recognized, “[b]ecause Section 1109(b) ‘expands the right to be heard [in a
bankruptcy proceeding] to a wider class than those who qualify under the
“person aggrieved” standard,’ courts considering the issue have concluded
that ‘merely being a party in interest is insufficient to confer appellate
_____________________
39
Because the argument relies upon the identical “party in interest” language from
both statutory provisions, see 11 U.S.C. §§ 330, 1109, we will refer only to § 1109(b).
40
11 U.S.C. § 1109(b).
13
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standing.’” 41 We agree, as does the “leading treatise on bankruptcy law,
Collier” 42:
Although section 1109 speaks broadly of the right of a party in
interest to raise and to appear and be heard on any issue in a
chapter 11 case, the section is silent on the subject of a party’s
standing to take an appeal from an adverse decision, other than
to expressly prohibit the Securities and Exchange Commission
from taking an appeal. In general, in order for a person to be a
proper party to take an appeal, one must be a “person
aggrieved” by the outcome of a particular proceeding.
Consistent with the basic purpose of section 1109(b), a party
qualifies as a “person aggrieved” if the decision in question
adversely affects the party’s pecuniary interest. 43
_____________________
41
Advantage Healthplan, Inc. v. Potter, 391 B.R. 521, 541 (D.D.C. 2008) (alteration
in original) (citations omitted) (first quoting In re American Ready Mix, Inc., 14 F.3d 1497,
1502 (10th Cir. 1994); and then quoting In re Salant Corp., 176 B.R. 131, 134 (S.D.N.Y.
1994)), aff’d sub nom. Greater Se. Cmty. Hosp. Found., Inc. v. Potter, 586 F.3d 1 (D.C. Cir.
2009); see also In re Combustion Eng’g, Inc., 391 F.3d 190, 217 (3d Cir. 2004), as amended
(Feb. 23, 2005) (“[W]e apply a “persons aggrieved” standard, not a “party in interest”
standard, to determine bankruptcy appellate standing.”); In re Betteroads Asphalt, LLC,
Nos. 17-BK-04156, 17-BK-04157, 2020 WL 7048697, at *9 (D.P.R. Nov. 30, 2020)
(“Pursuant to § 1109(b) of the Bankruptcy Code, ‘merely being a party in interest is
insufficient to confer appellate standing.’” (quoting Advantage Healthplan, Inc., 391 B.R. at
540)); In re Prospector Offshore Drilling S.a R.L., No. 17-CV-11572, 2019 WL 1150563, at *6
(D. Del. Mar. 12, 2019) (“While [§ 1109] ‘confers broad standing at the trial level,’ ‘courts
do not extend that provision to appellate standing.’” (quoting In re PWS Holding Corp.,
228 F.3d 224, 249 (3d Cir. 2000)), aff’d sub nom. In re Paragon Offshore plc, No. 19-1627,
2022 WL 1055574 (3d Cir. Apr. 8, 2022); In re Packard Square, LLC, No. 17-CV-52483,
2018 WL 2184356, at *3 (E.D. Mich. May 11, 2018) (same); In re Victory Markets, Inc., 195
B.R. 9, 15 (N.D.N.Y. 1996) (“Contrary to Appellant’s interpretation, § 1109(b) does not
confer appellate standing.”).
42
Lamie v. U.S. Tr., 540 U.S. 526, 540 (2004).
43
7 COLLIER ON BANKRUPTCY, ¶ 1109.08 (16th ed. 2022) (footnotes omitted).
14
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And, despite NexPoint’s able effort, case law brings it no comfort. It
points to Collins v. Mnuchin 44 in which we observed that Lexmark stands for
the proposition that “[f]or very broad statutory rights like the APA, an injury
in fact and inclusion in the zone of interests can add up to a right of action,
even if prudential standing limits would have blocked it.” 45 But as Appellees
observe, Collins addressed shareholder claims against the Federal Housing
Finance Agency under the Administrative Procedure Act, and is not a
bankruptcy case, it “says nothing about Bankruptcy Code § 1109, the person
aggrieved standard, or anything else even tangentially related to the issues in
this appeal.” Collins, when read in conjunction with the “party in interest”
language from Bankruptcy Code §§ 330 and 1109, still fails to engage our
longstanding precedent that appellate standing in bankruptcy actions is
afforded only to a “person aggrieved.” 46
*****
We AFFIRM.
_____________________
44
938 F.3d 553 (5th Cir. 2019), reversed and vacated in part on other grounds, Collins
v. Yellen, 141 S. Ct. 1761 (2021).
45
938 F.3d at 575.
46
See supra n.32–33.
15