Petfinders, L.L.C. v. Chapter 11 Trustee Sherman (In The Matter of Ondova Ltd. Co.)

Citation:
Fifth Circuit Court of Appeals; No. 13-10120
Tag(s):
Ruling:
The plain language of section 363(m) prevents an appellate court from granting effective relief in cases challenging bankruptcy court orders authorizing the sale of property of the estate to a good-faith purchaser, “whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale . . . were stayed pending appeal.”
Procedural context:
After Trustee's sale of domain name was approved by the bankruptcy court, objecting parties sought an emergency stay of the sale and appealed the sale order. The court granted, then vacated, a stay of the sale, and the Trustee consummated the sale.
Facts:
Trustee moved to sell Debtor's domain name under section 363, over the objection of third-parties that claimed ownership of the domain. The Court held an evidentiary hearing, ruled in favor of the Truste, and also abrogated the 14 day stay provided in Bankruptcy Rule 6004(h). The third-parties sought an emergency stay that was initially granted but later vacated. Once the stay was vacated, the Trustee confected the sale as allowed by the bankruptcy court. Meanwhile, the third-parties appealed the sale order to the district court on the basis this the domain name was not property of the estate and added an additional argument that the buyer was not a "good faith purchaser" under section 363(m). After refusing to entertain the newly asserted argument, the Fifth Circuit found the appeal to have been mooted by the Trustee's consummation of the sale.
Judge(s):
Before JOLLY, HIGGINBOTHAM, and DAVIS, Circuit Judges.

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