Judge Dora Irizarry
Debtors Sky Lofts and S&Y Enterprises (S&Y) agreed to sell certain properties to CAB Bedford LLC for $20 million. After S&Y sought Chapter 11 protection the debtors and CAB Bedford agreed to reduce the purchase price to $16.5 million. Thereafter, Sky Lofts sought Chapter 11 protection. While confirmation of debtors' reorganization plans were pending they agreed, in May 2011, to sell the properties to Bedford JV for $21 million. In March 2012 bankruptcy court approved debtors' third amended plans of reorganization to sell the properties to CAB Bedford for $21 million. Its Sept. 28, 2012, order denied Bedford JV's Feb. 24, application for an administrative expenses claim. Despite standing under 11 USC §503(b)(3) and (b)(4) Bedford JV did not show, by preponderant evidence, entitlement to a substantial contribution administrative expense. District court affirmed. Among other things, despite claiming to be the "direct" and "sole" cause of the third amended plans, Bedford JV did not participate or have direct involvement in their negotiation or preparation. Rather, Bedford JV was the sole objector to those plans, supporting bankruptcy court's finding that its actions did not directly benefit the estate or advance the bankruptcy processes.
