Helmstetter v. Herzog, No. 21-2486 (7th Cir. 2022)
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In 2014, Helmstetter filed a state court lawsuit against his former employer, Kingdom. Kingdom filed counterclaims and a separate lawsuit. Helmstetter's 2019 bankruptcy petition automatically stayed the state court litigation. Helmstetter filed schedules of assets and liabilities under penalty of perjury, valuing his total assets at $8.5 million, which included his projected state court recovery at between $5-7.5 million. Helmstetter valued his liabilities at $6.5-$10.5 million. After Helmstetter filed his first amended schedules, bankruptcy trustee Herzog obtained approval of a settlement with Kingdom, which agreed to pay the estate $550,000. Subsequently, Helmstetter filed amended schedules, valuing his total assets at $43 million and his liabilities at $20 million; he included $16 million for the state court litigation. Helmstetter provided no evidence to support the estimates, and his accountants’ report did not explain the methodologies they used.
The bankruptcy court approved the settlement agreement over Helmstetter’s objection. Without seeking a stay of the order, Helmstetter appealed. The district court dismissed. Herzog and Kingdom executed the settlement agreement and dismissed the state court litigation. The Seventh Circuit affirmed. Helmstetter failed to show how it is likely, not merely speculative, that his purported injury would be redressed by a favorable decision; he lacks Article III standing to appeal the decision.
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