In Re: Peggy 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 Peggy Nestor. The appeal concerned a July 26, 2024 order by Bankruptcy Judge Michael E. Wiles approving the Chapter 11 trustee’s motion to enter an insurance premium financing agreement.

Marianne Nestor appealed the Bankruptcy Court order. She was acting without a lawyer. The District Court referred the appeal to Magistrate Judge Sarah L. Cave, who ordered Marianne Nestor to explain why the appeal should not be dismissed for lack of subject-matter jurisdiction—that is, the court’s legal authority to hear the appeal.

Jurisdiction and Report and Recommendation

Federal Rule of Bankruptcy Procedure 8002(a) requires a notice of appeal to be filed within 14 days after the relevant bankruptcy order is entered. Judge Cave found that Marianne Nestor had not filed her notice of appeal within that period. After considering her response, Judge Cave issued a Report and Recommendation recommending that the appeal be dismissed without prejudice because the District Court lacked jurisdiction.

Albert Togut objected only to the recommended form of dismissal. He argued that the appeal should be dismissed with prejudice, asserting that Marianne Nestor and Peggy Nestor had filed untimely appeals from nearly every Bankruptcy Court order entered after Togut’s appointment as trustee. He also argued that the appeals impeded administration of the bankruptcy estate, imposed costs on the estate, and served no useful purpose.

Ruling

Judge Jennifer H. Rearden reviewed the objection de novo, meaning independently and from the beginning. The court explained that when it lacks subject-matter jurisdiction, it lacks power to dismiss with prejudice. The court also relied on the rule that the deadline for appealing a bankruptcy order is jurisdictional; without a timely notice of appeal, the District Court cannot consider the appeal.

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 of Court was directed to close the case and mail a copy of the order to Marianne Nestor.