Rev Op Group v. Mil Manager LLC (In the Matter of Mortgages Ltd)

Summarized by David Hercher , U.S. Bankruptcy Court, District of Oregon
11 years 3 months ago

Citation:

Matter of Mortgages Ltd., No. 12-15234 (9th Cir. Nov. 12, 2014).

Tag(s):

Ruling:

Two appeals were dismissed as equitably moot because, among other things, appellants did not seek stays of the appealed orders.

Procedural context:

The bankruptcy court confirmed the chapter 11 plan of Mortgages Ltd., which made and held real-estate-secured loans. Under the plan, ML Manager LLC manages the loans. ML Manager sought and obtained bankruptcy court orders clarifying that the plan authorized ML Manager both to act as agent for a group of investors, Rev Op Group, and to sell property and distribute the proceeds. Rev Op Group appealed both orders to the district court, which affirmed the orders. Rev Op Group then appealed to the Ninth Circuit, which dismissed the appeals as equitably moot.

Facts:

The appeals were equitably moot under the four-part test of In re Thorpe Insulation Co., 677 F.3d 869 (9th Cir. 2012): (1) Rev Op Group never sought to stay the orders pending appeal, nor did it give an adequate reason on the record for not doing so; (2) substantial consummation of the plan had occurred; (3) any alterations would inequitably harm third parties not before the court, because those parties would have to return distributions from the estate or sell property back to ML Manager; and (4) it would not be possible for the bankruptcy court to devise an equitable remedy were the rulings to be reversed. The Ninth Circuit panel would have relied solely on Rev Op Group’s failure to seek stays pending appeal, except that, in other cases, the Ninth Circuit had not consistently followed the opinion supporting that result, In re Roberts Farms, Inc., 652 F.2d 793, 798 (9th Cir. 1981). ML Manager, as appellee, could move to dismiss the appeals as equitably moot even though it did not move to dismiss the appeals as moot before the district court.

Judge(s):

J. Clifford Wallace and Jay S. Bybee, Circuit Judges, and Robert W. Gettleman, Senior District Judge for the Northern District of Illinois, sitting by designation

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