Arlington Capital, LLC v. Bainton McCarthy LLC

Federal 7th Circuit Court
Civil Court
Standing
Citation
Case Number: 
No. 15-2543
Decision Date: 
July 11, 2016
Federal District: 
N.D. Ill., E. Div.
Holding: 
Vacated and remanded

General unsecured creditor lacked standing to object to attorney fee petitions submitted to Bankruptcy Trustee by certain law firms, even though creditor argued that work performed by said law firms never had chance of benefiting bankruptcy estate. While Bankruptcy Ct. had approved said fee petitions that arose out of law firm’s pursuit of section 363(n) claim against instant creditor, which purchased debtor’s assets under conditions that Trustee believed had produced lower than market price for said purchase, Bankruptcy Ct. should have dismissed said objection due to creditor’s lack of standing to raise objection given fact that creditor had failed to show that it would have benefited financially if it would have prevailed in said objection. Moreover, record showed that other creditors with higher priority would have received any proceeds had creditor prevailed in its objection.