IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 09-10963

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff

R. ALLEN STANFORD,

Defendant - Appellant

v.

RALPH S. JANVEY,

Appellee

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:09-CV-0298-N

Before STEWART, PRADO, and ELROD, Circuit Judges.

PER CURIAM:

*

The Securities and Exchange Commission (SEC) brought an action against

several defendants, including R. Allen Stanford (hereinafter Stanford). Later,

United States Court of Appeals

Fifth Circuit

F I L E D

December 17, 2010

Lyle W. Cayce

Clerk

 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

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the district court, at the SEC’s request, appointed Ralph Janvey as receiver for

Stanford’s assets (hereinafter Janvey or the Receiver), as well as those of

Stanford-controlled entities. Subsequently, Janvey filed two motions seeking

approval of the judicial sale of assets from the Receivership Estate, which

Stanford opposed. The district court granted the motions. We granted

Stanford’s petition for interlocutory appeal of the district court’s judgments. For

the following reasons, we DISMISS this appeal as moot.

I.

This appeal arises out of an alleged multi-billion dollar Ponzi scheme

perpetrated by a network of some 130 entities, spanning 14 countries, controlled

by Stanford. On February 16, 2009, the SEC filed suit against Stanford.

Concurrent to filing suit, the SEC sought a temporary restraining order and

preliminary injunction to freeze all of Stanford’s assets. The district court

granted the order and later appointed Janvey receiver of the assets. Pursuant

to the district court’s order, Janvey has broad powers to “[p]erform all acts

necessary to conserve, hold, manage, and preserve the value of the Receivership

Estate, in order to prevent any irreparable harm.” The district court also

granted Janvey’s subsequent request for the appointment of a private-equity

advisor, Park Hill Group (PHG), to manage Stanford’s investment portfolio.

After Janvey and PHG conducted their preliminary valuation of Stanford’s

investment portfolio, they determined that many of Stanford’s investments had

a negative equity and “a number include contractual commitments that would

require the Receivership Estate to contribute additional millions of dollars or

face significant dilution or total loss of the investment.” At issue in this case are

interests in three limited partnerships—Israel Opportunity Fund I, L.P. (IOF I);

Israel Opportunity Fund II, L.P. (IOF II); and Midway CC Hotel Partners, L.P.

(Midway or Midway Interest).

In July 2009, Janvey filed two motions with the district court. In the first

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motion, Janvey asked the district court to confirm the sale of IOF I and IOF II

(collectively, the IOF Interests) because the Receivership Estate could not afford

the $61 million additional funds that the IOF Interests would require. Janvey

also explained that the Receivership Estate was already past-due on a pending

capital contribution to IOF II of $2.5 million and risked dilution of its initial

investment of approximately $14.3 million to approximately $400,000.

Similarly, Janvey filed a second motion asking the district court to confirm the

sale of Midway because the Receivership Estate could not afford the pending

capital call, which would require it to choose between investing an additional

$3.2 million into the partnership or face having its limited partnership interest

diluted from 71.83% to approximately 59.30% pursuant to Midway’s partnership

agreement. In both motions, Janvey explained that liquidation of the IOF and

Midway Interests would achieve the maximum benefit from the holdings and

was in the best interest of the Receivership Estate. In response to the motions,

Stanford argued that the sales constitute a breach of the Receiver’s fiduciary

duty, were not in the best interests of the Estate, and should not occur until the

case is resolved on its merits.

On August 25, 2009, in two separate orders,the district court approved the

sale of the IOF and Midway Interests. In both orders, the district court

summarily held that “the transactions . . . are in the best interests of the

Receivership Estate.” We granted Stanford’s petition for an interlocutory

appeal. At issue on appeal is: (1) whether this court has jurisdiction to review

the district court’s orders and (2) whether the district court had subject matter

jurisdiction to confirm the sale of the IOF and Midway Interests. We hold that

although we have statutory jurisdiction over this appeal, the appeal is moot.

II.

We review “questions of law as to jurisdiction de novo.” Ramirez-Molina

v. Ziglar, 436 F.3d 508, 513 (5th Cir. 2006). Janvey makes two claims regarding

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our jurisdiction. He argues that: (1) we do not have statutory jurisdiction

pursuant to 28 U.S.C. § 1292(a)(2) and (2) we do not have constitutional

jurisdiction because this appeal is moot. We address each of these challenges in

turn.

A.

Stanford contends that we have jurisdiction to hear his appeal pursuant

to 28 U.S.C. § 1292(a)(2), which grants this court jurisdiction over certain

interlocutory appeals involving receivers. Janvey acknowledges that we have

jurisdiction pursuant to our interpretation of section 1292(a)(2) in United States

v. “A” Manufacturing Co., 541 F.2d 504 (5th Cir. 1976). However, Janvey claims

that we incorrectly interpreted section 1292(a)(2), and thus, this panel should

reconsider its decision in that case. In “A” Manufacturing, we explained that

“[s]ection 1292(a)(2) provides for appeals from interlocutory orders which take

steps to accomplish the purpose of receiverships such as directing the sale or

disposal of property. It logically follows that if an order directing a sale is

appealable then an order confirming a sale after the fact is likewise appealable.”

541 F.2d at 505–06.

It is well-established that a panel does not have the authority to overrule

a previous panel’s decision absent an intervening, contrary, or superseding

decision by this court, sitting en banc, or by the Supreme Court. United States

1

 Janvey also claims that the Supreme Court’s decision in Mohawk Industries, Inc. v.

1

Carpenter, 130 S. Ct. 599, 604–05 (2009), calls into question this court’s decision in “A”

Manufacturing. In Mohawk, an employment case, the employer sought a “collateral order

appeal” of the district court’s order to disclose information related to the employee’s pretermination interview with the employer’s attorney. 130 S. Ct. at 599. The Eleventh Circuit

dismissed the appeal for want of jurisdiction. Id. at 603. The primary question before the

Supreme Court was “whether disclosure orders adverse to the attorney-client privilege qualify

for immediate appeal under the collateral order doctrine.” Id. The Supreme Court explained

thatthe collateral order doctrine, articulated in Cohen v. Beneficial Industrial Loan Corp., 337

U.S. 541, 546 (1949), allows a “‘small class’ of collateral rulings that, although they do not end

the litigation, are appropriately deemed ‘final’” pursuant to section 1291. Mohawk, 130 S. Ct.

at 605. Ultimately, the court cautioned that the doctrine should be applied on a limited basis,

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v. Setser, 607 F.3d 128, 131 (5th Cir. 2010) (citing Burge v. Parish of St.

Tammany, 187 F.3d 452, 466 (5th Cir. 1999). Thus, pursuant to our decision in

“A” Manufacturing, we have jurisdiction to hear Stanford’s interlocutory appeal.

B.

Janvey also argues that, even if we have statutory jurisdiction, we lack

constitutional jurisdiction because Stanford’s appeal is moot. See United States

v. Lares-Meraz, 452 F.3d 352, 355 (5th Cir. 2006) (“Whether an appeal is moot

is a jurisdictional issue because it implicates Article III’s requirement of a live

case or controversy.”). Janvey contends that, because Stanford failed to seek a

stay of either sales transactions, this court cannot grant Stanford the relief he

seeks. Thus, Janvey argues, Stanford’s inaction rendered moot an appeal of the

district court’s judgments confirming the sales. In response, Stanford argues

that a stay was not necessary because the district court lacked subject matter

jurisdiction, as the sale of the IOF and Midway Interests were conducted without

following the statutorily mandated procedural requirements of 28 U.S.C. § 2001,

which governs the sale of real property, or 28 U.S.C. § 2004, which governs the

sale of personal property. For the following reasons, we conclude that this

appeal is moot.

There is little authority discussing the effect of failing to seek a stay

pending appeal on a party’s right to challenge a district court’s order confirming

a judicial sale pursuant to § 2001 or § 2004. However, we are not without

guidance. Judicial sales often occur during the course of bankruptcy

proceedings, in which a stay pending appeal is statutorily mandated. See 11

U.S.C. § 363(m) (explaining that, unless a party obtains a stay pending appeal

and held that the appeal was properly dismissed by the Eleventh Circuit. Id. at 599. Janvey

contends thatthe analysis in Mohawk undermines the analysis in “A” Manufacturing because

“A” Manufacturing was based primarily on cases interpreting section 1291. However,“A”

Manufacturing does not rely on the collateral order doctrine. Thus, Mohawk is not applicable

to our interpretation of section 1292(a)(2) in “A” Manufacturing.

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of an order confirming the sale of property in a bankruptcy proceeding, an

appeal cannot effect the sale to a good faith purchaser). In those cases, we have

had the opportunity to opine on the importance of seeking a stay. See, e.g., Am.

Grain Assoc. v. Lee-Vac, Ltd., 630 F.2d 245, 247 (5th Cir. 1980). Moreover, there

is a plethora of case law discussing the consequences of failing to stay or enjoin

the sale of property. In these situations, we generally hold that the appeal is

moot where the action sought to be enjoined by this court has occurred. See

Seafarers Intern. Union of N. Am. v. Nat’l Marine Servs., 820 F.2d 148, 151 (5th

Cir. 1987), abrogated on other grounds by Litton Fin. Printing Div., a Div. of

Litton Bus. Sys., Inc. v. Nat’l Labor Relations Bd., 501 U.S. 190, 198 (1991). The

purpose of a stay or injunction, pursuant to Federal Rule of Civil Procedure 62

or Federal Rule of Appellate Procedure 8, is to prevent a party’s claim from being

moot by preserving the status quo pending resolution of an appeal. Neeley v.

Bankers Trust Co. of Tex., 848 F.2d 658, 661 (5th Cir. 1988). If proceedings are

not stayed, then an event may occur while a case is pending appeal that makes

it impossible for the court to grant any effectual relief. Tex. Midstream Gas

Servs., LLC v. City of Grand Prairie, 608 F.3d 200, 204–05 (5th Cir. 2010)

(citations and internal quotation marks omitted).

These basic principles are an important part of our jurisprudence because,

relevant to this case, the judicial sale of property often involves the rights of a

“good faith purchaser”—a party who purchases assets for value, in good faith,

and without notice of adverse claims. Hardage v. Herring Nat’l Bank, 837 F.2d

1319, 1323 (5th Cir. 1988); see also Black’s Law Dictionary 1355 (9th ed. 2009).

A good faith purchaser, like the purchasers of the IOF and Midway Interests, are

afforded special protection. The importance of securing the rights of good faith

purchasers is so fundamental that the Supreme Court explained almost 200

years ago: “Strong as a plaintiff’s equity may be, it can in no case be stronger

than that of a purchaser, who has put himself in peril by purchasing a title, and

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paying a valuable consideration, without notice of any defect in it, or adverse

claim to it.” See Boone v. Chiles, 35 U.S. 177, 210 (1836). Accordingly, with few

exceptions, good faith purchaser status trumps a challenge to an order

confirming the sale of property. See generally In re Bleaufontaine, Inc., 634 F.2d

1383, 1388 n.7 (5th Cir. 1981) (explaining that in bankruptcy proceedings a

party’s good faith purchaser status should be revoked if the party’s conduct

involved “fraud, collusion between the purchaser and other bidders or the

trustee, or an attempt to take grossly unfair advantage of other bidders.”

(citation and internal quotation marks omitted)). As Stanford did not seek to

stay the sale of the IOF and Midway Interests and the investments were sold to

good faith purchasers, we conclude that Stanford’s appeal is moot.

III.

For the foregoing reasons, we DISMISS this appeal as moot.

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