This is because, while there is a single federal Bankruptcy Code, there are hundreds of bankruptcy judges throughout the United States and each one has the authority to interpret many of the Code’s provisions differently.And, while debtors are generally given wide latitude to select the venue of their choice, there are circumstances in which creditors or other interested parties successfully challenge the debtor’s choice.(Richmond, VA), Crescent Jewelers (Oakland, CA), Diversified Restaurant Concepts (San Jose, CA), Eastman Kodak Company (New York, NY), Edwards Theatres (Orange County, CA), ERLY Industries, Inc. Louis, MO), Fox & Hound (Delaware), Kmart (Chicago, IL), Lodgenet Interactive Corp.(New York, NY), Merry-Go-Round (Delaware), Natrol, Inc. Tuchin represented Suzuki Motor Corporation, a Japan-based manufacturer of engines and vehicles sold worldwide, as the largest creditor (secured and unsecured) in the chapter 11 case of American Suzuki Motor Corporation.(Delaware), Pegasus Satellite Television (Portland, ME), Petries Retail (New York, NY), Sega Gameworks (Los Angeles, CA), Sydran Services (Oakland, CA), Tower Records (Delaware), United Airlines (Chicago, IL), Young Broadcasting, Inc. He has represented Viacom, Paramount, CBS and Cerberus as creditors in numerous cases. BGI Creditors' Liquidating Trust (In re BGI, Inc.), 772 F.3d 102 (2d Cir. In a matter of first impression, the court ruled that the standards governing equitable mootness in an appeal of an order confirming a chapter 11 plan of reorganization also apply in the context of a chapter 11 liquidation. Parker Interests (In re Grimland, Inc.), 243 F.3d 228 (5th Cir. 2012), but its ruling deepened a split among the circuits with respect to the standard of review and burden of proof to be applied. The Second Circuit explained that the GC Claimants failed to establish that general unsecured creditors, who could be stripped of their recovery if the class were certified, received notice of the appeal.Mootness "Mootness" is a doctrine that precludes a reviewing court from reaching the underlying merits of a controversy. To avoid dismissal on the basis of equitable mootness under Chateaugay, an appellant must demonstrate that: 1. (In re GWI PCS 1 Inc.), 230 F.3d 788, 799–800 (5th Cir. Outlook To the extent that any ambiguity existed in the Second Circuit regarding application of the doctrine of equitable mootness to appeals arising from chapter 11 liquidation proceedings, BGI definitively dispels it.In federal courts, an appeal can be either constitutionally or equitably moot. The court can still order some effective relief; 2. 2000) (same), with Charter, 691 F.3d at 483 (abuse-of-discretion standard); Paige, 584 F.3d at 1339–40 (same); and Cont'l Airlines, 203 F.3d at 210 (same). ("Borders"), filed for chapter 11 protection in February 2011 in the Southern District of New York. Interestingly, the court expressly left for "a future panel of our Court the question of whether a district court may also invoke equitable mootness in the context of a Chapter 7 liquidation." The principal thrust of the ruling, however, is directed more toward the consequences of failing to take appropriate and timely action—a strategic blunder on the part of the GC Claimants that could readily have been avoided.
In contrast, the judge-fashioned remedy of "equitable mootness" bars adjudication of an appeal when a comprehensive change of circumstances occurs such that it would be inequitable for a reviewing court to address the merits of the appeal. Such relief will not unravel intricate transactions so as to knock the props out from under the authorization for every transaction that has taken place and create an unmanageable, uncontrollable situation for the Bankruptcy Court; 4. In July 2011, the bankruptcy court authorized Borders to liquidate substantially all of its assets.
Steve, Brutzkus Gubner’s Managing Partner, represents financial institutions, Fortune 500 companies (and their financing divisions), closely held businesses and high net worth individuals in complex bankruptcy and insolvency matters.
He is known in the insolvency arena as the “involuntary bankruptcy go-to lawyer” because of his management of the sensitive issues surrounding involuntary bankruptcy filings, and general business advice he applies to navigate potential pitfalls and solve problems before they occur.
Court of Appeals for the Second Circuit considered whether the doctrine of "equitable mootness" applied to the appeal of a confirmation order approving a liquidating chapter 11 plan. 2012), however, a panel of the Third Circuit adopted a more nuanced approach, holding that the foremost consideration is "whether allowing an appeal to go forward will undermine the plan, and not merely whether the plan has been substantially consummated." The Second Circuit reaffirmed the doctrine of equitable mootness in In re Charter Communications, Inc., 691 F.3d 476 (2d Cir. According to the Second Circuit: (i) the bankruptcy court's finding that the chapter 11 plan had been substantially consummated was not clear error, because, as of the effective date, Borders had transferred its property to the liquidating trust and the trust had distributed million to creditors; and (ii) the district court did not abuse its discretion in finding that the GC Claimants failed to satisfy at least two of the Chateaugay factors—i.e., ensuring adequate process for parties who would be adversely affected (factor 4) and demonstrating their own diligence in obtaining a stay pending appeal (factor 5).
The Second Circuit affirmed a district court ruling dismissing an appeal because the appellants failed to overcome the presumption of mootness triggered by "substantial consummation" of a liquidating chapter 11 plan. In Charter, the Second Circuit held that once a chapter 11 plan has been substantially consummated, an appeal is presumed to be equitably moot unless the appellant can demonstrate that it has met all five of the criteria delineated in its previous ruling in Chateaugay. Moreover, the court emphasized, having failed to participate in the plan confirmation proceedings or to appeal or seek a stay of the confirmation order, the GC Claimants did not "pursue their claims with all due diligence." Notably, the record reflected that at least one of the GC Claimants consulted counsel regarding his or her claims more than two weeks prior to the confirmation hearing but did not participate in the proceedings.