In Re: Nestor

Background

Peggy Nestor filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York on April 25, 2023. Marianne Nestor, Peggy Nestor’s sister, became involved in the bankruptcy proceedings through co-ownership of a property with her sister.

The appeal concerned a June 21, 2024 bankruptcy-court decision authorizing the Chapter 11 trustee to employ Vinay Agarwal, CPA, LLC as the trustee’s accountants. Marianne Nestor appealed that decision to the district court and represented herself.

Report and Recommendation

Magistrate Judge Sarah L. Cave ordered Marianne Nestor to show why the appeal should not be dismissed for lack of subject-matter jurisdiction. Federal Rule of Bankruptcy Procedure 8002(a) requires a bankruptcy appeal notice to be filed within 14 days after entry of the order being appealed. Judge Cave determined that Marianne Nestor had not filed her notice within that period.

Judge Cave recommended dismissing the appeal without prejudice because the court lacked jurisdiction. Albert Togut objected only to the recommended form of dismissal. He argued that the appeal should be dismissed with prejudice because Marianne Nestor and the debtor had filed other late appeals and because further appeals would burden the bankruptcy estate and creditors.

District Court’s Ruling

Judge Jennifer H. Rearden reviewed the objection de novo, meaning independently and without deference to the magistrate judge’s conclusion on the challenged issue. The court explained that when a court lacks subject-matter jurisdiction, it does not have power to dismiss with prejudice. The court also relied on authority treating the time limit for bankruptcy appeals as jurisdictional.

The court overruled Albert Togut’s objection, adopted Judge Cave’s Report and Recommendation in its entirety, and dismissed Marianne Nestor’s appeal without prejudice. The clerk was directed to close the case and mail a copy of the order to Marianne Nestor.