Official Committee of Unsecured Creditors v. Anderson Senior Living Property, LLC (In re Nashville Senior Living, LLC)

Summarized by Michael Coury , Glankler Brown, PLLC
15 years 5 months ago

Citation:

6th Circuit Court of Appeals, Case No. 09-05817, (September 3, 2010)

Tag(s):

6th Circuit

Ruling:

The Sixth Circuit Court of Appeals affirmed the decision of the Sixth Circuit Bankruptcy Appellate Panel which dismissed the appellant's appeal on grounds of statutory mootness under 11 U.S.C. 363(m) for failure to obtain a stay of a sale of assets pending appeal. The Court found that, for purposes of Section 363(m), a sale approved pursuant to 11 U.S.C. 363(a) or (b) included the sale of an non-debtor's interest in property pursuant to 11 U.S.C. 363(h). The Court rejected the Committee of Unsecured Creditor's construction of 363(h) which would have placed sales of non-debtor's interests under 363(h) outside the ambit of a sale under 363(a) or (b), and therefore outside the protection afforded to purchasers by 363(m).The Court held that, once the requirements of 363(h) have been satisfied, the sale is approved as a sale of assets under either 363(a) or (b) and is subject to dismissal for statutory mootness under 363 (m).

Procedural context:

This was an appeal from the B.A.P.'s dismissal of an appeal from a final, but unstayed, judgment of the bankruptcy court approving a sale of assets pursuant to 11 U.S.C 363(a) and which included the sale of a non-debtor's interest in jointly owned property under 363(h). The B.A.P. dismissed the appeal as statutorily moot under Section 363(m) since the Committee had failed to obtain a stay pending appeal.

Facts:

The Debtors, which co-owned various senior housing properties with certain non-debtors as tenants in common, obtained court approval of a sale procedure to sell the properties, free and clear of the interests of the debtors and the non-debtors under 11 U.S.C.363 (a) and (h). Separate adversary proceedings were also filed to sell the non-debtors' interests under 363(h). The bankruptcy court approved the sale over the objection of the Official Unsecured Creditors' Committee. The bankuptcy court denied the Committee's motion for a stay pending appeal and the Committee did not obtain a stay from the B.A.P. prior to closing of the sale.

Judge(s):

Rogers (Cook, concurring); (Clay, concurring in the result)

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