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Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 

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• 

FILLD 

United States Court of Appeal, 'l'enth Circuit 

PUBLISH MAY 21 1993 

UNITED STATES COURT OF APPEAL5 ROBERT L. HOECKER 

Clerk 

TENTH CIRCUIT 

IN RE: BROADMOOR PIACE INVESTMENTS, LP., DEBTOR. 

G-K DEVELOPMENT COMPANY, INC., 

Appellant, 

vs. No. 92-3043 (D. c. No :a:. 

92-3048 9 ()-2 39 8-0, 

91-2442-V) 

BROADMOOR PIACE INVESTMENTS, LP., FORREST L ROBINSON, 

RESOLUTION TRUST CORPORATION, BLUE VAILEY FEDERAL SAVINGS 

AND LOAN, AND UNITED STATES TRUSTEE, 

Appellees. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF KANSAS 

William M. Modrcin, Kansas City, Missouri (Ronald L Gold, Shawnee Mission, Kansas, 

with him on the brief) for Appellant. 

Sherman A Botts, John W. McClelland (Roy H. Farchmin, William F. Schoeb, Wirken & 

King, Kansas City, Missouri, and Michael R. Roser, Jennifer H. McCoy, Lathrop & 

Norquist, Kansas City, Missouri, with them on the brief) for Appellee. 

Before KELLY and BARRETT, Circuit Judges, and OWEN, District Judge.• 

*The Honorable Richard Owen, Senior United States District Court Judge for the Southern 

District of New.York, sitting by designation. 

Appellate Case: 92-3043 Document: 010110115160 Date Filed: 05/21/1993 Page: 1 
OWEN, District Judge 

G-K Development Company, Inc. ( "G-K") appeals from an order of 

the United States District Court for the District of Kansas 

affirming the Bankruptcy Court's approval of the sale of the 

Broadmoor Place office building in Mission, Kansas to one Forrest 

L. Robinson. G-K contends that it, not Robinson, was and is the 

rightful purchaser of the property. 

Broadmoor Place Investments ("Broadmoor") was a Kansas limited 

partnership whose sole asset was the said building. Broadmoor 

filed a Chapter 11 petition in October, 1989. It then signed an 

agreement1 in June and July 1990 for the sale of the building to 

G-K, for $5.7 million. The said agreement necessarily required 

Broadmoor to seek the approval of the Bankruptcy Court for the sale 

and to use its best efforts to obtain that approval. 

Thereafter, in August, 1990, Broadmoor signed another 

agreement for the sale of the building to Robinson. G-K's bid was 

$5,700,000, subject to financing and other contingencies. The 

Robinson bid was $5,500,000 cash, no material contingenies, and a f 

$50,000 earnest money deposit. At this point, Broadmoor sought 

Bankruptcy Court approval for the sale. Broadmoor's application 

' . presented G-K' s bid as the favored one, advising the Court, 

however, that a second bid had been signed on August 7, 1990, with 

. , . 

1

While G-K calls its collective signed instruments here a 

"contract", this is a misnomer since there can be no contract in 

this situation without Bankruptcy Court approval, In re Landscape 

Properties. Inc., 100 B.R. 445, 447 (Bankr. E.D. Ark. 1988). 

Accordingly, these instruments are but binding bids, and we so 

refer to them hereafter. · 

2 

Appellate Case: 92-3043 Document: 010110115160 Date Filed: 05/21/1993 Page: 2 
I 

Robinson. Broadmoor regarded the Robinson agreement as a back-up. 

on September 10, 1990, the Bankruptcy Court approved the sale 

to Robinson, finding that it provided fewer contingencies and 

facilitated a more immediate closing. G-K appealed and sought a 

stay of the sale to Robinson. The Bankruptcy Court denied the stay 

on November 19, 1990. G-K then sought a stay in the District 

Court, which never ruled on the stay application. On December 7, 

1990, the building was transferred to Robinson pursuant to the 

approval agreement. 

On August 14, 1991, the District Court ruled on the merits of 

G-K' s appeal and remanded to the Bankruptcy Court to determine 

Robinson's good faith purchaser status under § 363 (m) of the 

Bankruptcy Code. The Bankruptcy Court declined to hold a hearing, 

but ruled that Robinson was a good faith purchaser. G-K's appeal 

from this ruling was dismissed by the District Court on the ground 

that the issues were moot within the meaning of Bankruptcy Code§ 

363(m) because the Sept~mber 13, 1990 order and the sale of the 

Broadmoor asset had not been stayed pending G-K's appeal, the sale 

had closed on December 7, 1990, and Robinson was a good faith 

purchaser. 

On this appeal, pursuant to 28 u.s.c. § 158(d), G-K's main 

contentions are that the Bankruptcy Court was in error in three 

respects. First, it should not have had both the G-K and Robinson 

contracts before it at the same time for consideration, and by 

making a selection, it was improperly participating in the 

administration of the bankrupt's estate, performing administrative 

3 

Appellate Case: 92-3043 Document: 010110115160 Date Filed: 05/21/1993 Page: 3 
duties which, since the Bankruptcy Code of 1978, have been the sole 

responsibility of the trustee or debtor in possession, not the 

court. Accordingly, G-K contends, the Bankruptcy Court was without 

jurisdiction to make any selection, and consequently, its selection 

of the Robinson bid was a nullity. Second, G-K contends that the 

Robinson "contract" was not entered into in good faith, since 

Robinson had actual knowledge of the prior G-K "contract" and 

third, that being so, i.e. Robinson not being in good faith, the 

doctrine of mootness does not apply. On the basis of the 

foregoing, G-K seeks a remand of the proceeding to the Bankruptcy 

Court where, G-K submits, that Court, considering the G-K contract 

by itself, would find that G-K was a good faith purchaser, that its 

contract was acceptable, and upon acceptance would award G-K the 

Broadmoor office building pursuant to its terms. 

Turning to G-K' s first assertion of error, while there is 

support for its position that a Bankruptcy Court cannot be 

presented with competing bids from which il is .to choose, since 

that would involve it in an impermissible participation in the 

administration of a bankrupt's estate, we hold that a Bankruptcy 

Court in a case such as this does have the power to disapprove a 

· proposed sale recommended by a trustee or debtor-in-possession if 

it has an awareness there is another proposal in hand which, from 

the estate's point of view, is better or more acceptable, Landscape 

Properties, supra~ See also · 2 Lawrence P. King, Collier on 

Bankruptcy, 1 363.03[1] (15th ed. 1991) (normally, terms of sale 

"will ultimately rest in the judgment and discretion of the 

4 

Appellate Case: 92-3043 Document: 010110115160 Date Filed: 05/21/1993 Page: 4 
trustee, with the court becoming involved only when an issue is 

raised and a hearing is requested"); In re Summit Corp., 891 F.2d 

1, 5 (1st Cir. 1989) ("In order to achieve the goals of maximizing 

the value of the estate and protecting the interests of creditors, 

the court has plenary power to provide for competitive bidding."). 

Next, since the G-K proposal was a bid and not a contract (see 

note 1, supra), there was no bad faith on Robinson's part in 

signing and submitting its proposal knowing of G-K's. 2 

Two further grounds asserted by G-K to vacate the sale to 

Robinson have but scant support in the record. These are 1) 

inadequate notice of the sale; and 2) collusion between Broadmoor 

and Robinson evidenced by an allegedly concealed management 

contract between them. As to these claims, the notice of the 

hearing for the sale contained or referenced sufficient necessary 

information as to both bids and the time and place of their 

consideration. Next, as to the said management contract, while its 

details were not specified, the fact of its existence between 

Robinson and Broadmoor was specifically set forth in the Robinson 

bid on which the Bankruptcy Court acted, thus negating any claim of 

concealment and collusion. G-K's claim of collusion is further 

negated by the fact that Broadmoor proffered the G-K bid as its 

first choice. There is accordingly no basis to disturb the 

2we note that given the Bankruptcy Court's acceptance of the 

Robinson bid, G-K, absent some other meritorious ground for appeal, 

lacks standing to appeal, being merely an unsuccessful bidder and 

not an "aggrieved person" as is required. Holmes v. Silver Wings 

Aviation. Inc., 881 F.2d 939, 940 (10th cir. 1989); In re HST 

Gathering company. 125 B.R. 466, 468 (Bankr. w.o. Tex. 1991). 

5 

Appellate Case: 92-3043 Document: 010110115160 Date Filed: 05/21/1993 Page: 5 
Bankruptcy Court's finding of November 25, 1991 .that the Robinson 

transaction was in good faith and involved no fraud. Given this, 

we do not reach G-K' s contentions as to the District Court's 

finding of mootness here, which finding, being undisturbed, is 

itself dispositive of this appeal. 3 Matter of Andy Frain Services. 

Inc., 798 F.2d 1113, 1125 (7th Cir. 1986). 

The order of the District Court is affirmed. 

' ..... 

311 u.s.c. § 363(m) provides: "The reversal or modification 

on appeal of an authorization ••• of a sale or lease of property 

does not · affect the validity of a sale or lease under such 

authorization to an entity that purchased or leased such property 

in good faith, whether or not· such entity knew of the pendency of 

the appeal, unless such authorization and such sale or lease were 

stayed pending appeal." {emphasis added). 

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