### The Honorable Richard H. Battey, Chief Judge, United States 1 

### District Court the District of South Dakota. ___________ No. 96-1508

___________ Steve Veltman; Sue Veltman, * * Appellants, * * Appeal from the United States v. * District Court for the * District of South Dakota. Dennis Whetzal, Chapter 7 * Trustee; Internal Revenue * Service, * * Appellees. *

___________ Submitted: June 12, 1996 Filed: August 22, 1996

___________ Before BOWMAN, HEANEY, and BEAM, Circuit Judges.

___________ BEAM, Circuit Judge.

Steve an d Sue Veltman (the Veltmans), co-owners of property in th e bankruptcy estate of Troy and Connzella Ray (the debtors), appealed to the district court from ten bankruptcy court orders confirming the sale o f fifte enlots. The Veltmans alleged that they did not receive adequat e notice t hat the lots were to be sold free and clear of their ownershi p interest. The Veltmans now appeal the district court's order dismissing 1 their bankruptcy appeal for lack of subject matter jurisdiction for failur e to file a timely notice of appeal. We affirm.

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I. BACKGROUND
In January 1993, the debtors filed a petition under Chapter 11 of the Bankruptcy Code (Code). The bankruptcy estate included fifteen undevelope d lots located in Oak M ountain Estates, Lawrence County, South Dakota. The debtor s owned an undivided twenty-five percent interest in the propert y with the Veltmans. In July 1993, the Veltmans filed a motion in bankruptc y court to partition their interest in the property. The bankruptcy court entered an interim order authorizing the Chapter 11 debtors to sell th e lots free and clear of liens and encumbrances wi th the proceeds to be held in escrow until the final hearing on the motion to partition. The Interna l Revenue Service (IRS)--a creditor with a lien onthe property--objected to this order because it had not received sufficient notice. In Februar y 1994, th e bankruptcy court entered an amended interim order on th e Veltmans' motion to partition. This order againauthorized the debtors to sell the property free and clear of liens and encumbrances with th e proceeds to be held in escrow until the final hearing on the motion t o partition. All liens and encumbrances, including the IRS lien, were t o attach to the proceeds.

Subsequently, the Veltmans, the debtors, and Norwest Bank of Sout h Dakota (Norwest) (a creditor claiming an interest in the property ) negoti ated and entered into a stipulation whereby Norwest would receiv e sixty per cent of all net proceeds of sales up to $63,000 plus interest

. Under the stipulation, the Veltmans would not receive their twenty-fiv e percent interest; rather, they would receive the remaining forty percent of all ne t proceeds of sales up to $77,177.03 plus interest. The IR S opp osed this stipulation because the government was not included in th e division of the proceeds. Nevertheless, on Augu st 5, 1994, the bankruptcy court approved the stipulation over the objection of the IRS, with th e condition that the stipulation would be subject to the terms of the amende d interim order. One such term provided:

### The Veltman s did not execute and deliver the deeds, however, 2 

### until ordered to do so by the district court in the spring o f 1996.
-3- "[T]hat the Debtors are authorized to sell lots free and clear of all liens and encumbrances with the sales procee ds remaining after payment and settle ment of the authorized expenditures to be escrowed in an intere st-bearing account, with all liens and encumbrances on the real estate to attach to the proceeds o f the sale in the order of their priority, including any liens of the Uni ted States of America, acting through the Interna l Reve nue Service, with such priority and distribution o f pro ceeds to be determined by this [bankruptcy court] at a future hearing in this case."

Veltm anv. Whetzal , 192 B.R. 201, 202 (D.S.D. 1996) (quoting the Orde r Approving Stipulation, dated August 5, 1994, at 1-2).

In Jan uary 1995, the debtors' Chapter 11 case was converted to a Chapter 7 proceeding. In August, the Chapter 7 trustee, Dennis Whetza l (Trustee), filed a motion requesting the bankrup tcy court to authorize the sale of the real property "free and clear of all liens, encumbrances and interests ." Id. (emp hasis added by district court). Interested parties, including the Veltmans, received notice of the motion. No objections to this motio n were filed and on September 8, 1995, the bankruptcy cour t entered an order appr oving the sale. In this order, the bankruptcy court stated t hat the sale of the real property was subject to the terms an d conditions set forth in the Trustee's motion. T he Veltmans did not appeal this decision.

Prior to the sale, the Trustee asked the Veltmans to commit t o selling their interest at the auction and delivering their deeds a t closing. The Veltmans agreed in a letter dated September 29, 1995, i n whichthey also referenced the stipulation. The property was sold at an
auc tionfor approximately $273,000. The Trustee prepared deeds for th e Velt mans to execute. On October 3, 1995, the Trustee filed a motion t o 2 confirm the sale of the real property

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free of all liens, encumbrances, and interests in the property. Th e Veltmans filed an objection to the Trustee's motion, stating that: (1 ) they were willing to comply with the stipulation and the bankruptcy court order dated August 5, 1994; (2) they had no obje ction to the sale of their interest in the property on the terms and conditions of the stipulation; (3) they had no objection to the results of the auction sale; and (4) they did not want their proceeds to be commingled with the funds of th e bankruptc yestate. The Veltmans then filed a motion to release th e procee ds of the sale according to the terms of the stipulation. Th e bankruptcy court denied the Veltmans' motion andconfirmed the sale in ten separate orders dated October 26, 1995. On Nove mber 2, 1995, the Veltmans filed a notice of appeal from those orders and a motion to stay actio n pending appeal, which the bankruptcy court denied on November 6, 1995.

Th e Veltmans appealed to the district court, which found that i t lacked subject matter jurisdiction to decide the case because the Veltmans had failed to appeal the September 8th bankruptcy court order authorizing the sale of the real property within ten days of the date of the entry of judgme nt as required. See Fed. R. Bankr. P. 8002(a). Rejecting th e Veltmans' contention that the order of September 8, 1995, failed to provid e them with adequate notice of any intent to sell the property free and clea r of the ir ownership interest, the district court dismissed the Veltmans ' appeal. The Veltmans now appeal from the district court's order. On appeal, the Veltmans contend that their notice of appeal filed on November 2 , 1995, was timely. They argue that the bankruptcy court' s October 26th orders confirming the sale notified them for the first time that th e property was sold free and clear of their interest. They als o assert that the bankr uptcy court could not transfer their fee interest in the property without first conducting an adversarial proceeding.

### The Veltmans do not assert that the notice requirements set 3 

### out in the bankruptcy rules were violated. See Fed. R. Bankr. P. 2002.
-5- II. DISCUSSION

We must f irst determine which bankruptcy court order authorized the sale of t he property free and clear of the Veltmans' interest. Th e Veltmans contend that the September 8th order did not so authorize the sal e of the property because: (1) that order failed to provide them wit h adequate notice; and (2) the bankruptcy court failed to comply wit h provisions in the Code that require an adversari al proceeding and specific determinations prior to selling the interest of a non-debtor co-owner.
Turning f irst to the question of adequate notice, we agree with the district court that the September 8th order provided the Veltmans wit h sufficient notice that the property was to be so ld free and clear of their interest. Under the Code, a Chapter 7 trustee has the authority to sell

3 the real property in the bankruptcy estate after notice and a hearing. 11 U.S.C. § 363(b)(1). The notice and hearing required prior to sale of the real property are defined in the Code as follows:

(1) "after notice and a hearing", or a similar phrase--

(A) me ans after such notice as is appropriate i n the particular circumstances, and such opportunity for a hearing as is appropriate in the particula r circumstances; but (B) authorizes an act without an actual hearing if such notice is given properly and if-- (i) such a hearing is not requeste d timely by a party in interest.

. . . .

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11 U.S.C. § 102(1). The bankruptcy court's September 8th order approved the sale of the property subject to the terms and conditions set out in th e Trustee's motion. One such condition was that the court authorize the sal e of the real property free and clear of all liens, encumbrances an d interests . This lang uage provided the Veltmans with adequate notice that the prope rty was to be sold free and clear of their ownership interest

. Theyfiled no objection to the Trustee's motion and did not appeal th e bankruptcy court's Se ptember 8th order. Therefore, the Veltmans received adequate notice and waived their request for a hearing.

The Ve ltmans first filed a notice of appeal on November 2, 1995 , after the bankruptcy court entered several orders confirming the sale of the pro perty on October 26, 1995. In general, failure to file a timel y notice of appeal from a bankruptcy court's order deprives the distric t court of jurisdiction to review that order. See , e.g. , Jacobson v

. Nielsen , 932 F.2d 1272 (8th Cir. 1991) (per curiam). An appeal from a bankruptcy court order to a district court must be made by filing a notice of appeal with the clerk within ten days of the entry of that order. Fed. R. Bankr. P. 8001(a) & 8002(a). We agree with t he district court that the Velt mans should have filed their notice of appeal within ten days o f September 8, 1995. S ee Fed. R. Bankr. P. 9006(a) (setting out the method to calculate the ten-day period). Therefore, th e district court correctly conclu ded that it lacked subject matter jurisdiction to review th e bankruptcy court's September 8th order.

### As argued by the IRS in its motion to dismiss for lack o f 4 

### subject matter jurisdiction, which was submitted to us after oral argument, once a sale becomes final and a stay is not entered the sale cannot be reviewed on appeal. See 11 U.S.C. § 363(m); se e also In re CGI Indus., Inc. , 27 F.3d 296, 299 (7th Cir. 1994) (stating that two complementary policies support this conclusion: (1) the importance of encouraging finality in bankruptcy sales by protecting good-faith purchasers; and (2) the court's genera l jurisdictional bar from deciding cases in which it cannot provide a remedy). But see In re Mobe rg Trucking, Inc. , 112 B.R. 362, 363 (Bankr

. 9th Cir. 1990) (stating that subsection 363(m) does no t ren der an appeal unreviewable when the appellant seeks to attac k the sect ion 363 sale on the grounds of improper notice). The IR S also submitted an affidavit by the Trustee in which the Truste e attested that the real propert y had been conveyed to each buyer by trustee's deed, that the Veltmans had supplied the warranty deeds as or dered by the district court, and that those deeds had bee n filed.
-7- We also doubt that the October 26th orders are now reviewable b ecause the proper ty has already been sold. See 11 U.S.C. § 363(m). Even if we 4 review the later bankruptcy court orders of

### Because the Veltmans consented to the sale of the property, 5 

### we need not rely on a theory o f implied consent. Some courts have found implied consent, however, when a party with an interest i n the bankruptcy estate fails to object after receiving notice of the sale under subsection 363(f)(2 ). See In re Tabone, Inc. , 175 B.R. 855, 858 (Bankr. D.N.J. 1994); In re Elliot , 94 B.R. 343, 34 5 (E.D. Pa. 1988).
-8- October 26, the Veltmans have failed to establish that the bankruptcy cour t erred in authorizing the sale of the property free and clear of th e Veltmans interest. Under the Code, a bankruptcy trustee may sell property of the bankruptcy estate under subsection 363(b) "free and clear of an y interest in such property of an entity other than the estate" if "suc h entity consents." 11 U.S.C. § 363(f)(2). In the stipulation, the Veltman s consented to the sale of the property free and clear of their interest

. They also consented to the sale of their propert y interest in their letter of S eptember 29, 1995. Moreover, the Veltmans did not dispute thei r obligationto execute and supply the deeds to the real property in their object ionto the bankruptcy court's October orders confirming the sale

. Instead, they objected to any sale in which they would receive an amount different than the sum agreed to in the stipulation. Thus, the Veltmans consente d to the sale of the lots and have waived any objection to th e sale. 5

The Veltmans contend that their consent to the sale was conditioned upon the enforcement of the stipulation. The Veltmans

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understandably express concern about the amount they will receive for thei r property interest without the protection of the stipulation. Because this question is essential ly one of valuation, however, it is best left to the bankruptcy court to r esolve. While we recognize that the stipulation was entered into while th e case was proceeding under Chapter 11, the terms of the s tipulation seem to provide a fair and equitable resolution to th e valuation dispute. Unlike other "creditors," the Veltmans had an ownershi p interest in the property. Moreover, the stipulation was executed by the parties and accepted by the bankruptcy court on several occasions. Lastly , as the district court noted, the Trustee did not submit a propose d distribution of sale proceeds to the bankruptcy court. Veltman , 192 B.R. at 202-03. In any event, we leave it to the ban kruptcy court to determine the value of the Veltmans' property interest in the fund.

The Veltmans next contend that the bankruptcy court erred i n author izing the sale of their property interest without first complyin g with bankruptcy provisions that require an adver sarial proceeding prior to the sale of an innocent co-owner's interest in a bankruptcy estate. See 11 U.S.C. § 363(h); Fed. R. Bankr. P. 7001. As discussed above, we do not have s ubject matter jurisdiction to review the September 8th orde r authorizing the sale because the Veltmans failed to file a timely notice of appeal from that order. Moreover, it is doubtful that any of th e bankruptcy court's orders are reviewable now tha t the sale of the property has become final. Se e 11 U.S.C. § 363(m); see also supra note 4. In any event, the Veltmans h ave waived this argument by failing to present it to the bankruptcy court in a timely manner.

If we reviewed the Veltmans' contention, we would find it to b e without merit. As the Veltmans acknowledge in their brief, subsectio n 363(h) is inapplicable if the non-debtor property owner consented to the sale. We have already concluded that the Veltmans consented to the sale of the property free and clear of their

### The V eltmans reliance on In re Wickham , 127 B.R. 9, 1 1 6 

### (Bankr. E.D. Va. 1990) is misp laced. In that case, the court held tha t the trustee must comply with the requirements of subsectio n 363(h) as well as those in sub section 363(f) to sell a non-debtor, co-owner's interest in tenancy by the entirety property in th e ban kruptcyestate because the co-owner opposed the sale. Th e Veltmans' consent to the sale makes this a different case.
-10- interest and thus neither the protection provide d by subsection 363(h) nor a hearing was necessary. 6

III. CONCLUSION

For t he reasons discussed above, we conclude that we lack subjec t matter jurisdiction to review this appeal. Accordingly, we affirm th e district court's order and leave it to the bankr uptcy court to resolve the valuation question as to the amount the Veltmans should receive for their ownership interest in the property that was sold. The parties may als o present their arguments for costs, damages, and sanctions to the bankruptc y
cour t for consideration along with the valuation issue. All pendin g motions are denied.

A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.