United States Bankruptcy Appellate Panel of the Sixth Circuit
In re: Jeffrey W. Pasley, Debtor.
Robert W. Keats, Chapter 7 Trustee, Appellee. Jeffrey W. Pasley, Appellant,
Appeal from the United States Bankruptcy Court for the
Western District of Kentucky at Louisville. No.
3:16-bk-33769-Alan C. Stout, Judge.
W. Keats, KEATS & SCHWIETZ, PLLC, Louisville, Kentucky,
Jeffrey W. Pasley, Louisville, Kentucky, pro se.
Before: HARRISON, PRICE SMITH, and WISE, Bankruptcy Appellate
N. WISE, Bankruptcy Appellate Panel Judge.
Jeffrey W. Pasley ("Debtor") is the sole member of
R.E.N. Enterprises, LLC ("REN"), a Kentucky limited
liability company. REN owns real estate at 4528 West
Broadway, Louisville, Kentucky ("LLC Real Estate").
Appellee/Chapter 7 Trustee Robert W. Keats
("Trustee") filed a motion seeking authority from
the United States Bankruptcy Court for the Western District
of Kentucky to sell the LLC Real Estate. Trustee asserted
that Debtor's interest in REN was estate property under
§ 541(a)(1),  and Debtor is deemed to have assigned that
interest to Trustee, who had the same rights that Debtor
would have as to REN, including the right to sell REN's
property. Debtor objected. The bankruptcy court held two
hearings, both times explaining that Trustee stands in
Debtor's shoes as the sole member of REN and has whatever
authority Debtor would have to sell the LLC Real Estate. The
bankruptcy court subsequently entered an order ("Sale
Order") granting Trustee's motion. Debtor appealed
the Sale Order, arguing that the court lacked authority to
enter the Sale Order because the LLC Real Estate is not
property of his bankruptcy estate.
Panel has jurisdiction to decide this appeal. The United
States District Court for the Western District of Kentucky
has jurisdiction to hear appeals from final orders issued by
the Bankruptcy Court. 28 U.S.C. § 158(a)(1). The
district court has authorized appeals to this Panel under 28
U.S.C. § 158(b)(6), and no party elected to have the
district court hear this appeal. "[A] bankruptcy
court's order may be immediately appealed if it is (1)
'entered in [a] . . . proceeding[ ]' and (2)
'final'-terminating that proceeding." Ritzen
Grp., Inc. v. Jackson Masonry, LLC (In re Jackson
Masonry, LLC), 906 F.3d 494, 499 (6th Cir. 2018)
(quoting 28 U.S.C. § 158(a)), cert. granted sub nom.
Ritzen Grp., Inc. v. Jackson Masonry, LLC, No. 18-938,
2019 WL 266853 (May 20, 2019). A bankruptcy court's order
authorizing a trustee to administer an asset is a final
order. Bonner v. Sicherman (In re Bonner),
330 B.R. 880 (unpublished table decision), available
at 2005 WL 2136204, at *1 (B.A.P. 6th Cir. 2004)
("bankruptcy court's order granting the
trustee's motion to reopen the bankruptcy case to
administer an asset is a final order, because the
determination that the trustee may administer the asset as
property of the estate is conclusive on the merits.")
(citation omitted). A bankruptcy court's sale order is
also a final order. K&B Capital, LLC v. Official
Unsecured Creditors' Comm. (In re LWD,
Inc.), 335 Fed.Appx. 523, 526 (6th Cir. 2009) ("a
sale order by a bankruptcy court is generally a final,
appealable order."); accord ELM Road Dev. Co. v.
Buckeye Ret. Co., LLC, Ltd. (In re Hake), 419
B.R. 328, 331 (B.A.P. 6th Cir. 2009) (citations omitted).
relevant facts are undisputed. Debtor filed a chapter 7
bankruptcy petition on December 19, 2016, and his amended
petition lists "DBA R.E.N. Enterprises, LLC" in
response to question 4, which asks for "[a]ny business
names . . . you have used in the last 8 years." (Bankr.
No. 16-33769-acs, ECF No. 143-1 at 2, 4.) Debtor listed
his 100% ownership interest in REN as an asset valued at $50,
000 on Schedule B but did not separately identify the
LLC's assets or debts. Debtor did not claim an exemption
in his REN membership interest on amended Schedule C. (ECF
discovered that REN owns the LLC Real Estate. On June 29,
2018, Trustee filed a "Notice and Motion to Sell Real
Property Free and Clear (11 U.S.C. § 363) 4211 West
Broadway and 4528 West Broadway" (the "Sale
Motion"). Only the Sale Motion as it pertains to the LLC
Real Estate is at issue in this appeal. Pursuant to §
363, the Sale Motion sought authority for Trustee to: (a)
list the LLC Real Estate with a realtor or sell it privately;
(b) pay closing costs "as an administrative expense of
the debtor estate"; and (c) hold the net sale proceeds
pending further order. (ECF No. 115 at 2.) Trustee asserted
that REN owns the LLC Real Estate, and Debtor's interest
in REN "is an interest of the Debtor that upon the
filing of a bankruptcy petition by the Debtor falls into the
hands of the Trustee, which ultimately gives the Trustee
authority to sell the Debtor's property."
Id. (citing § 541).
objected to the Sale Motion, arguing that the LLC Real Estate
should not be sold until a pending adversary proceeding
relating to separate real estate was resolved, but he did not
explain the correlation between the LLC Real Estate sale and
the adversary proceeding. Trustee filed a Supplemental Brief
in support of the Sale Motion, reaffirming his positions that
Debtor is deemed to have assigned his membership interest in
REN to Trustee upon his bankruptcy filing and that Trustee
had the right to liquidate ...