Edwards Family Partnership LP v. Johnson (In re Community Home Financial Services Inc.)
Edwards Family Partnership LP v. Johnson (In re Community Home Financial Services Inc.), ___F.3d___ (5th Circuit Court of Appeal, 3/5/21) appeal no. 20-60718: This is an additional Circuit holding that Trustees have standing to appeal, even if the Trustee has no pecuniary interest in the ruling being appealed. Cites 9th Circuit, 1st Circuit and 6th Circuit decisions that recognize “the inadequacy of a pecuniary-interest test for trustee standing.” Also cites a Fourth Circuit decision that says a trustee never has a pecuniary interest. Decision says that the Fifth Circuit had “implicitly recognized” the same principle.
Decision observes that a “trustee’s standing comes from the trustee’s duties to administer the bankruptcy estate, not from any pecuniary interest in the bankruptcy.” Therefore, 5th Circuit held appeal was not moot (due to the 2 law firms that had appealed, and which did have a pecuniary interest in the appeal—their fees—having settled and dropped out of the appeal. Decision holds trustee had standing because “the payment of fees to [the two firms] directly affects the administration of the bankruptcy estate” and the trustee’s responsibility for “ensuring that only proper payments are made from the bankruptcy estate.”