In Re: Wansdown Properties Corporation N.V.

Background

Wansdown Properties Corporation, N.V., a Curaçao corporation, managed assets for Princess Ashraf Pahlavi and owned a Manhattan townhouse that was its principal asset. Wansdown hired Azadeh Nasser Azari to work on matters for the Princess. After the Princess died, Azari received a confession of judgment signed by Gholam Reza Golsorkhi. The confession purported to give Azari either a $2.7 million payment or recurring monthly payments of $9,000. Azari filed the confession in New York state court, and a lien was created on the townhouse. She later obtained authorization for a sheriff’s sale of the property.

The day before the scheduled sale, Wansdown filed for bankruptcy under Chapter 11. Wansdown then began an adversary proceeding against Azari, claiming that its obligation to pay her was a voidable transfer under § 544(b) of the Bankruptcy Code. Azari moved for summary judgment, which is a request to resolve claims without a trial when there is no genuine dispute over important facts.

Bankruptcy Court Proceedings

The Bankruptcy Court denied Azari’s summary-judgment motion. It concluded that Wansdown could pursue the § 544(b) claim because at least one creditor could benefit from the avoidance action, eligible creditors had not yet been paid under the confirmed plan, and at least some claims were impaired. The Bankruptcy Court also granted Wansdown partial summary judgment on Azari’s affirmative defenses of unclean hands and fraud and entered partial judgment for Wansdown.

Azari sought permission to appeal part of the Bankruptcy Court’s interlocutory order and decision. An interlocutory appeal is an appeal before the lower court has entered a final judgment resolving the entire dispute. Azari argued that Wansdown had no right to pursue the action on behalf of creditors because, in her view, Wansdown had sufficient capital to pay them and the litigation would benefit Wansdown or its professionals rather than the creditors.

District Court’s Analysis

The district court explained that it has discretionary authority to hear an interlocutory appeal from a bankruptcy court. Courts generally apply the standard in 28 U.S.C. § 1292(b), which requires a controlling legal question, substantial grounds for disagreement about that question, and a likelihood that an immediate appeal would materially advance the end of the litigation. Interlocutory appeals are generally disfavored.

The court declined to grant leave to appeal. It found that Azari had not shown substantial grounds for disagreement about the issue presented. The court also stated that Azari’s proposed question was closely tied to the facts of this case and had limited applicability to other cases. Although the court did not need to decide the two remaining statutory requirements, it concluded that the circumstances did not justify departing from the general practice of postponing appellate review until final judgment. The court also found no exceptional circumstances warranting an immediate appeal.

Disposition

The court denied Azari’s motion for leave to appeal. The court’s conclusion addressed whether Azari could take an immediate interlocutory appeal; it did not resolve the underlying § 544(b) dispute on the merits. The court dismissed the action for lack of jurisdiction, directed the Clerk to terminate the identified motions, and closed the case.