Lind v. Spacone

Case Type:
Case Status:
BAP No. EC-18-1001-BHKu (9th Circuit, Jul 27,2018) Not Published
BAP for 9th Circuit dismissed appeal of order approving sale as moot after trustee and buyer agreed to abandon the sale and filed new motion with bankruptcy court to approve sale. Based on trustee's and buyer's inability to close transaction, and mutual agreement to abandon approved sale and pursue different transaction with new motion, BAP determined appeal of order was moot.
Procedural context:
Bankruptcy court (ED Cal.) granted trustee's motion to approve the sale of real property. Debtor appealed to BAP for 9th Circuit.
Grape farming debtor and his wife filed two previous bankruptcy cases prior to current case. Bankruptcy court dismissed both without confirmation or discharge. In previous cases debtors identified four real properties, including "Davis Road" and "Peltier Road" and as vineyards in need of maintenance. Prior to current case, debtors borrowed $800k, placing deed of trust on one property ("Davis Road"). Debtors borrowed an additional $500k in exchange for staggered purchase of portion of Davis Road. Debtors then borrowed an additional $660k from three related lenders, granting third, fourth, and fifth deeds of trust against Davis Road. Debtors defaulted on first and obligation to convey the portion of Davis Road. Debtors entered into agreement to sell entirety of Davis Road for $3.432 million. Lender/buyer holding first and purchase right filed state court action. Husband filed chapter 12 case, valuing Davis Road at $3.262 million, without $2 million in secured obligations. Following trustee's motion to dismiss based on ineligibility for chapter 12, husband voluntarily converted to chapter 11. Trustee moved to sell Peltier Road for $2.8 million, Davis Road to $2.44 million, and related relief regarding competing lien, purchase rights, and deed of trust claims. Debtor did not object to relief and bankruptcy court granted orders regarding sale of Davis Road and related matters. Debtor appealed. Two weeks prior to oral argument, Trustee moved to dismiss appeal for mootness, stating that he and buyer were abandoning sale of Davis Road and starting over.
Brand, Hursh, Kurtz

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