IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 00-20593

(Summary Calendar)

 

In the Matter of: THE GINTHER TRUSTS, A Texas Joint Venture,

Debtor,

--------------------------

FERGUS M. GINTHER; ADRIANA N. GINTHER,

Appellants,

versus

THE GINTHER TRUSTS, A Texas Joint Venture; REDSTONE EL DORADO

ACQUISITION, L.P.,

Appellees,

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Appeal from the United States District 

Court for the Southern District of Texas

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January 29, 2001

Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.

PER CURIAM:

Appellants Fergus and Adriana Ginther contend that the District

Court erred in dismissing as moot their appeal of the bankruptcy court’s

authorization of the sale of the undivided interest of the Ginther

Trusts, a Texas joint venture (“the Venture”), in the El Dorado Ranch
2

(“the Ranch”) to Redstone El Dorado Acquisition, L.P. (“Redstone”). The

Venture owned, in the aggregate, approximately 51% of the undivided

interest in the Ranch, a real estate development in Texas, and joined

all other owners of fractional interests in selling the Ranch to

Redstone. As the Venture was then a debtor in bankruptcy, it did not

sell its fractional interest in the Ranch until after it obtained

authorization from the bankruptcy court pursuant to 11 U.S.C. § 363(b).

Appellants contended in bankruptcy court that the sale should not have

been authorized because, inter alia, the Venture lacked standing to

become a debtor in bankruptcy. Appellants also asserted —— for the

first time on appeal to the district court —— that Redstone was not a

good faith purchaser. Because, however, (1) the sale was authorized by

the bankruptcy court, and (2) Appellants were unable to obtain a stay

of the sale, we affirm the district court’s dismissal of this appeal as

moot.

I. Facts and Proceedings

In the 1950s, Noble C. and Minnie Lee Ginther, husband and wife,

acquired the Ranch, a 2033 acre tract of Texas real property.

Thereafter, it was developed into the El Dorado Ranch and El Dorado

Country Club. They sold fractional interests in the Ranch, retaining

approximately 51 percent in undivided ownership. 

In the mid-1980s, the Ginthers (“grantors”) created the Ginther

Revocable Trust, a revocable inter vivos trust, to which they

transferred their interest in the Ranch. The trust agreement provided
3

that, on the death of the first grantor to die, the trustee would divide

the assets of the trust into two separate shares, not necessarily equal

in value, one share to hold the property of the surviving grantor, the

other share to hold the property of the deceased grantor. 

In accordance with that provision of the trust agreement, on the

death of Noble C. Ginther in 1989, the trust’s 51 percent interest in

the Ranch was divided into two separate shares: The decedent’s

undivided 24.7 percent interest went into the Noble C. Ginther Grantor

Trust and the survivor’s undivided 26.7 percent interest went to the

Minnie Lee Ginther Grantor Trust. These trust shares —— actually sub

trusts —— were then placed under the fiduciary control of the Advent

Trust Company, as successor trustee of the two grantor trusts that

resulted (collectively the “Ginther Trusts”).

In 1998, the Venture, referring to itself as a Texas joint venture,

voluntarily filed for relief under Chapter 11 of the bankruptcy code.

In response to a challenge mounted by a number of creditors to the

Venture’s standing to file for bankruptcy, the bankruptcy court found

that the Venture constituted a de facto joint venture under Texas law,

that it owned a fractional interest of some 51% to 53% in the Ranch, and

that it did have standing as a debtor in bankruptcy court. 

The Venture and the other owners of the Ranch entered into an

agreement to sell the Ranch to Redstone, subject to the Venture’s

obtaining the bankruptcy court’s approval of the sale of its interest.

Appellants challenged the Venture’s record title to the Ranch and

attempted to block the sale. They did not, however, challenge
1 In re GWI PCS 1 Inc., 230 F.3d 788, 800 (5th Cir. 2000).

4

Redstone’s status as a good faith purchaser until they appealed to the

district court. 

The bankruptcy court proceeded to approve the Venture’s sale of its

interest in the Ranch to Redstone as good faith purchaser. Appellants

appealed that decision to the district court and then to us, and they

sought a stay of the sale pending each appeal. Like the bankruptcy

court, however, the district court —— and ultimately this court ——

refused to grant a stay, and the sale of the Ranch to Redstone was

consummated.

Despite their failure to obtain a stay of the sale, Appellants

prosecuted their appeal of the bankruptcy court’s authorization of the

sale to the district court, which dismissed their appeal as moot because

the sale had already been closed. That dismissal is now before us on

appeal.

II. Analysis

A. Standard of Review

We review de novo the district court’s dismissal of an appeal from

the bankruptcy court as moot.1

B. Failure to Obtain a Stay

After the bankruptcy court authorized the sale of the Venture’s

interest in the Ranch to Redstone pursuant to 11 U.S.C. § 363(b),

Appellants were unsuccessful in their attempts to obtain a stay of the

sale, and it closed. 11 U.S.C. § 363(m) provides that a bankruptcy
2 11 U.S.C. § 363(m) (West 2000).

3 Gilchrist v. Westcott, (In Matter of Gilchrist), 891 F.2d

559, 561 (5th Cir. 1990) (citing Moody v. Empire Life Ins. Co. (In

re Moody), 849 F.2d 902, 905 (5th Cir.), cert. denied, 488 U.S. 967

(1988)).

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court’s authorization of the sale of property under 11 U.S.C. § 363(b)

“to an entity that purchased. . .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” cannot

be reversed or modified.2

Appellants contended, for the first time on appeal to the district

court, that Redstone was not a good faith purchaser of the Ranch, making

§ 363(m) inapplicable. As Redstone’s status as a good faith purchaser

was not challenged in the bankruptcy court, however, we need not address

this issue. “It is well established that we do not consider arguments

or claims not presented to the bankruptcy court.”3 We nevertheless note

in passing that our thorough review of the record, Appellants’

arguments, and the bankruptcy court’s well-reasoned opinion, convinces

us that if we were to address the good faith purchaser issue we would

likely agree with the bankruptcy court’s determination that Redstone was

a good faith purchaser as a matter of law.

C. Subject Matter Jurisdiction

Appellants also challenge the subject matter jurisdiction of the

bankruptcy court by urging that the Venture was not a debtor with

standing in bankruptcy court. This contention is irrelevant to the
4 891 F.2d 559 (5th Cir. 1990).

5 796 F.2d 994 (7th Cir. 1986).

6 Id. at 561 (quoting In re Sax, 796 F.2d at 998).

7 11 U.S.C. § 109(b) (West 2000).

6

instant inquiry, however. In In re Gilchrist,

4 we adopted the Seventh

Circuit’s interpretation of § 363(m) that a failure to obtain a stay is

fatal to a challenge of a bankruptcy court’s authorization of the sale

of property, notwithstanding any questions as to that court’s

jurisdiction. As the Seventh Circuit had earlier held in In re Sax,

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[t]he appellants raise the jurisdictional argument as if it

somehow negates or excuses their failure to obtain a stay.

It does not. This appeal is moot because [the appellants]

failed to obtain a stay, so we cannot reach the question of

whether the bankruptcy court had jurisdiction to order and

approve the sale. . . .The bankruptcy court made the

determination that it had jurisdiction; an issue which it had

jurisdiction to decide. . . .That decision stands unless it

is appealed properly. . . .Despite the maxim that 'subject

matter jurisdiction can be raised at any time,' valid

procedural rules cannot be ignored just because the

jurisdictional decision is being challenged rather than the

decision on the merits.6

Moreover, we are persuaded, as was the bankruptcy court, that the

Venture’s resulting co-ownerships following the division of the original

trust on the death of the first settlor to die is a de facto joint

venture under Tex. Civ. Code Ann. § 6132b. Such joint ventures are

clearly “persons” entitled to be debtors in bankruptcy court.7

III. Conclusion

Because Appellants failed to obtain a stay of the sale of the

Venture’s interest in the Ranch to Redstone, the district court
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correctly dismissed Appellants’ appeal as moot. The decision of the

district court is therefore

AFFIRMED.