14-817-bk(L)
Harbour Trust Co. Ltd. v. Aaron

                                  UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                      SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed on or
after January 1, 2007, is permitted and is governed by Federal Rule of Appellate Procedure 32.1 and
this Court’s Local Rule 32.1.1. When citing a summary order in a document filed with this Court, a
party must cite either the Federal Appendix or an electronic database (with the notation “summary
order”). A party citing a summary order must serve a copy of it on any party not represented by
counsel.

        At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 21st
day of January, two thousand fifteen.

PRESENT:           RALPH K. WINTER,
                   JOSÉ A. CABRANES,
                   REENA RAGGI,
                                Circuit Judges.


In re: Plusfunds Group, Inc.,

                   Debtor,


HARBOUR TRUST CO. LTD., Trustee for the SPhinX Trust,

                   Appellant-Cross-Appellee,

                             v.                                      Nos.    14-817-bk(L),
                                                                             14-940-bk(XAP)
ROBERT AARON, DERIVATIVES PORTFOLIO
MANAGEMENT, LTD., DERIVATIVES PORTFOLIO
MANAGEMENT, LLC, DPM MELLON LIMITED,

                   Appellees-Cross-Appellants.


FOR APPELLANT-CROSS-APPELLEE:                         DAVID J. MOLTON (Andrew S. Dash, Daniel
                                                      J. Saval, Brown Rudnick LLP, New York, NY,
                                                      Leo R. Beus, Beus Gilbert PLLC, Phoenix,
                                                        AZ, on the brief), Brown Rudnick LLP, New
                                                        York, NY.

FOR APPELLEES-CROSS-APPELLANTS:                         GREGG M. GALARDI (Daniel G. Egan,
                                                        Andrew O. Bunn, on the brief), DLA Piper
                                                        LLP, New York, NY.

     Appeal from a judgment of the United States District Court for the Southern District of
New York (Paul A. Crotty, Judge).

        UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court is VACATED and the
cause is REMANDED for the Bankruptcy Court to explain what prejudice, if any, would result
from reopening the bankruptcy case.

        Appellant Harbour Trust Co. Ltd. (the “Trustee”) appeals from the February 13, 2014
judgment of the District Court affirming the May 13, 2013 decision of the United States Bankruptcy
Court for the Southern District of New York (James M. Peck, Bankruptcy Judge) denying the Trustee’s
motion to reopen the Chapter 11 case of Plusfunds Group, Inc. We assume the parties’ familiarity
with the underlying facts, the procedural history of the case, and the issues on appeal.

        Section 350(b) of the Bankruptcy Code provides that “[a] case may be reopened in the court
in which such case was closed to administer assets, to accord relief to the debtor, or for other
cause.” 11 U.S.C. § 350(b). “A bankruptcy judge’s decision to grant or deny a motion to reopen
pursuant to 11 U.S.C. § 350(b) shall not be disturbed absent an abuse of discretion.” Smith v.
Silverman (In re Smith), 645 F.3d 186, 189 (2d Cir. 2011). “The reason is that such decisions invoke the
exercise of a bankruptcy court’s equitable powers, which is dependent upon the facts and
circumstances of each case.” State Bank of India v. Chalasani (In re Chalasani), 92 F.3d 1300, 1307 (2d
Cir. 1996).

         Upon review of the record and relevant law, we are unable to ascertain whether the
Bankruptcy Court fully considered whether any of the parties would suffer prejudice if it granted the
Trustee’s motion to reopen. See Batstone v. Emmerling (In re Emmerling), 223 B.R. 860, 864 (B.A.P. 2d
Cir. 1997) (“[T]he decision to reopen or not is discretionary with the court, which may consider
numerous factors including equitable concerns . . . . A court of equity must consider whether
reopening a case would prejudice the adversary or cause a change in the adversary’s position.”).
Although the Bankruptcy Court stated that “there has been no showing of prejudice resulting from
denial of the Trustee’s request to reopen the case,” In re PlusFunds Grp., Inc., 492 B.R. 202, 210
(Bankr. S.D.N.Y. 2013) (emphasis supplied), it was silent as to whether any prejudice would result
from granting the Trustee’s request. We therefore remand to the Bankruptcy Court to explain what
prejudice, if any, would result from reopening the case.


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        We intimate no view on the merits of the Trustee’s motion to reopen or on the question of
appellees’ standing. Should the parties feel that further appeal to the District Court is necessary after
the Bankruptcy Court more fully explains its decision, we encourage the District Court to consider
any such appeal on an expedited basis. Any further appeal to this Court shall be heard by this same
panel and may be initiated by filing a letter with the Clerk of the Court requesting reinstatement of
this appeal. See United States v. Jacobson, 15 F.3d 19, 21-22 (2d Cir. 1994).

                                           CONCLUSION

       For the reasons stated above, the District Court’s February 13, 2014 judgment is
VACATED and the cause is REMANDED for the Bankruptcy Court to explain what prejudice, if
any, would result from reopening the bankruptcy case.

        Any further appeals in this matter are to be referred to this panel.



                                                        FOR THE COURT:
                                                        Catherine O’Hagan Wolfe, Clerk




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