Andrew L. Young v. Lake County Treasurer

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted October 22, 2024 *
Decided October 23, 2024
Before
MICHAEL B. BRENNAN, Circuit Judge
THOMAS L. KIRSCH II, Circuit Judge
CANDACE JACKSON-AKIWUMI, Circuit Judge
No. 24-1415
ANDREW L. YOUNG,
Debtor-Appellant,
v.
LAKE COUNTY TREASURER,
Creditor-Appellee.
Appeal from the United States District
Court for the Northern District of
Indiana, Hammond Division.
No. 2:23-CV-324-PPS
Philip P. Simon,
Judge.
O R D E R
D.A.Y. Investments, LLC became insolvent and filed for bankruptcy protection
under Chapter 11. The district court dismissed an appeal of an order that converted the
proceeding to Chapter 7, reasoning the party appealing, Andrew Young, lacked
* We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. FED. R. A PP. P. 34(a)(2)(C).
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with FED. R. A PP. P. 32.1

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No. 24-1415 Page 2
standing. Because Young was not pecuniarily affected by the order directed to the
insolvent limited liability company, he had no standing to appeal it; thus we affirm.
Young and limited liability companies of which he was the sole member
(including D.A.Y.) filed for Chapter 11 bankruptcy after they became insolvent. The
bankruptcy court jointly administered the cases, see FED. R. BANKR . P. 1015(b), and the
same counsel represented each debtor. The Treasurer in Lake County, Indiana, the
creditor, moved to convert each Chapter 11 case into a Chapter 7 proceeding.
See 11 U.S.C. § 1112. The debtors, including Young, jointly opposed the Treasurer’s
motions. The bankruptcy court, with the Treasurer’s agreement, see id. § 1112(b)(3),
postponed the motions while the parties litigated discovery disputes and a threshold
question related to the motions. Meanwhile, the bankruptcy court held status
conferences on the motions at which the same counsel represented all the debtors.
The Treasurer eventually moved for summary judgment on each of its motions
to convert. Each debtor, including D.A.Y., opposed their corresponding motion for
summary judgment. Young did not join D.A.Y.’s response or oppose the motion for
summary judgment directed against D.A.Y., but he attended oral argument on the
motions. The bankruptcy court granted the Treasurer’s motion for summary judgment
and converted D.A.Y.’s bankruptcy proceeding to Chapter 7. D.A.Y. then moved to
reconsider. Young did not join that motion, and the bankruptcy court denied it.
Appearing pro se in the district court, Young appealed the bankruptcy court’s
order against D.A.Y., but D.A.Y. itself did not appeal, and Young represented himself,
not D.A.Y. The Treasurer moved to dismiss Young’s appeal for lack of standing for two
reasons: First, in the bankruptcy court Young did not object to the motion to convert
D.A.Y.’s bankruptcy, and second, he was not aggrieved by the order against D.A.Y., a
legally distinct limited liability company. The district court granted the Treasurer’s
motion. Without reaching the second contention, it accepted the first argument that
Young lacked standing because he did not join D.A.Y. in opposing summary judgment
on the motion to convert D.A.Y.’s bankruptcy. The district court denied Young’s motion
to reconsider, and he appealed to this court.
This appeal turns on whether Young had standing in the district court to appeal
the bankruptcy court’s order converting D.A.Y.’s bankruptcy. “Bankruptcy standing is
narrower than Article III standing”; only a person “aggrieved” by an order of the
bankruptcy court can appeal it. In re Ray, 597 F.3d 871, 874 (7th Cir. 2010) (citations
omitted). Young is aggrieved only if (1) he attended and objected at a bankruptcy court

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No. 24-1415 Page 3
proceeding to the proposed order, and (2) he was “affected pecuniarily” by the order.
Id. (quoting In re Stinnett, 465 F.3d 309, 315 (7th Cir. 2006)).
Young’s first argument—that he appeared and objected to the motion to convert
D.A.Y.’s case—is debatable. He observes that he attended all hearings in the bankruptcy
court, he was the only natural-person debtor in the joint proceedings where each debtor
opposed the motions to convert, he shared counsel with D.A.Y., and he was its sole
member. The Treasurer counters that Young lacks standing because he did not join
D.A.Y.’s opposition to the Treasurer’s motion for summary judgment on its motion to
convert D.A.Y.’s bankruptcy case; nor did Young join D.A.Y.’s motion to reconsider the
conversion. Relying on an out-of-circuit case, see Matter of Point Ctr. Fin., Inc., 890 F.3d
1188 (9th Cir. 2018), Young replies that we should overrule our precedent and hold that
appearance and objection are not prerequisites to appeal a bankruptcy court’s order so
long as the order pecuniarily affected him.
We need not reassess the appear-and-object requirement or decide whether
Young satisfied it because, even if he did, Young lacks standing to appeal for the reason
that the order did not pecuniarily affect him. An order pecuniarily affects him only if it
diminishes his property, increases his burdens, or impairs his rights. In re Ray, 597 F.3d
at 874 (citing In re Cult Awareness Network, Inc., 151 F.3d 605, 608 (7th Cir. 1998)). This
rule limits appeals to “only those persons whose interests are directly affected by a
bankruptcy order to appeal.” Id. (quoting In re Cult Awareness Network, 151 F.3d at 608).
Young argues that the order directly affected him because, as the sole member of
D.A.Y., he lost “inseparable” and “indivisible” rights to the company’s assets, including
its real estate and cash. But he is incorrect. Under Indiana law, to benefit from the
corporate form, a limited liability company like D.A.Y. is distinct from its members.
See Pazmino v. Bose McKinney & Evans, LLP, 989 N.E.2d 784, 786 (Ind. Ct. App. 2013).
Young is “not personally liable for the debts, obligations, or liabilities” of D.A.Y.,
see IND. C ODE § 23–18–3–3(a), and he directly owns none of D.A.Y.’s assets, see Connolly
v. Connolly, 952 N.E.2d 203, 208 (Ind. Ct. App. 2011). Because D.A.Y.’s property, rights,
and burdens are legally distinct from Young’s, the conversion order had no direct
pecuniary effect on him.
Young replies unpersuasively that his pecuniary interest derives from the
possibility that he might not receive income from D.A.Y. or its assets. He cites dicta
from a case stating that managers of a debtor corporation might be able to appeal a
bankruptcy court’s order directed against that corporation if the “managers themselves
have been injured pecuniarily.” See In re C.W. Mining Co., 636 F.3d 1257, 1266 (10th Cir.

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No. 24-1415 Page 4
2011). But that passage does not help Young because D.A.Y.’s insolvency, not the
conversion order, is why Young is not receiving income from D.A.Y. Even if the
bankruptcy court had not converted D.A.Y.’s case from Chapter 11, Young would not
receive income from D.A.Y. because as the debtor-in-possession in a Chapter 11
proceeding, D.A.Y. would owe a fiduciary duty to its creditors. See In re Scott, 172 F.3d
959, 967 (7th Cir. 1999). And Indiana law would bar D.A.Y. from paying income to
Young while D.A.Y. remains insolvent. See IND. C ODE § 23–18–5. Likewise, the
liquidation of D.A.Y.’s assets in Chapter 7 did not diminish the value of Young’s
interest in those assets—the company’s insolvency already did that. Young seems to
assume that the conversion deprived him of conjectured income he might receive in the
future, if insolvency ends. But to acquire standing, injuries must be “imminent,” not
“conjectural.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). Thus, without a
pecuniary loss from the conversion order itself, Young lacked standing to appeal it.
AFFIRMED

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