- Case No. 10-40930 (5th Cir. Aug 16, 2011)
- Court held that a flexible and less stringent standard is used in bankruptcy cases to determine if orders are final for purposes of appellate jurisdiction. Court further held that the business judgment standard in Section 363 (as opposed to the actual and necessary standard in Section 503) is the appropriate standard under the facts of this case for reviewing the Bankruptcy Court's order authorizing the Debtor to reimburse the due diligence expenses of qualified bidders' in a contemplated sale of a substantial asset of the estate.
- Procedural context:
- Appeal from the District Court's order that affirmed the Bankruptcy Court's order granting the Debtor's motion for authority to reimburse due diligence expenses of qualified bidders incurred in connection with the sale of a substantial asset of the Debtor's estate. The Court of Appeals for the Fifth Circuit affirmed the lower courts' rulings.
- The Debtor filed a motion seeking authority to reimburse qualified bidders their due diligence expenses incurred in connection with a contemplated sale of the Debtor's judgment that awarded the Debtor $1.4 billion plus 260 million shares in related entity against the Debtor's Parent entities. The Debtor's Parents objected to the reimbursement of due diligence expenses. The Debtor established a "compelling and sound business justification" to the Bankruptcy Court for granting the reimbursement request. The Debtor's Parents obtained a stay pending their appeal to the District Court. The Debtor's Parents, subsequently, obtained confirmation of a chapter 11 plan in the Debtor's case that reinstated the Debtor's Parents control over the Debtor. Certain beneficiaries under the reimbursement order intervened into the appeal of the reimbursement order. The District Court affirmed the Bankruptcy Court's order authorizing the Debtor to reimburse expenses of qualified bidders. The Debtor, after it was subject to its Parents' control again, and the Debtor's Parents appealed the reimbursement order to the Court of Appeals for the Fifth Circuit.
- The Hon. Smith and the Hon. Stewart, decided by a quorum due to the death of the Hon. Garwood.
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