Jacobs

*19 MEMORANDUM ***

Creditor-Appellant Randall Jacobs filed a claim in the bankruptcy court seeking an administrative expense priority based on a certificate of indebtedness issued to him by Debtor-Appellee Audre, Inc. Jacobs also brought a claim on behalf of Robert Geras and Jerold Siegan for an administrative expense priority based on a $44,000 loan they allegedly made to Audre. The bankruptcy court denied Jacobs’s claim that was based on the certificate of indebtedness for failure to comply with the provisions of the court’s Sale Order authorizing the sale of such certificates. The bankruptcy court also concluded that Geras and Siegan failed to comply with the court’s orders regulating Audre’s post-petition incursion of debt, but allowed the claim as an unsecured non-priority claim. Jacobs appealed to the Bankruptcy Appellate Panel, which affirmed the bankruptcy court. This appeal follows.

The bankruptcy court determined that the essential issue was whether Jacobs was in fact a “purchaser” of a Class A Certificate under the Sale Order. Investors had paid money into a trust account that was to be used to pay Jacobs’s legal fees and purchase Class A Certificates. Jacobs claims…