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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

FORT LAUDERDALE DIVISION

In re:

No Rust Rebar, Inc., Case No. 21-12188-PDR

 Debtor. Chapter 7

 / 

No Rust Rebar, Inc.,

 Plaintiff, 

v. Adv. Case. No. 21-1111-PDR

Green Tech Development, LLC, 

Defendant. 

 / 

ORDRER DENYING DEFENDANT’S MOTION TO DISMISS

This matter came before the Court upon Defendant Green Tech Development, 

LLC’s (“Green Tech”) Motion to Dismiss (the “Motion”).1 Green Tech essentially 

1 (Adv. Doc. 115).

Peter D. Russin, Judge

United States Bankruptcy Court

_____________________________________________________________________________

ORDERED in the Southern District of Florida on May 16, 2023.

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argues that, as a result of intervening events, including the conversion of the main 

case to chapter 7, this adversary has become moot and should therefore be dismissed. 

For the reasons that follow, the Motion is denied. 

JURISDICTION & VENUE

The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1334(b). The 

matter was properly removed under 28 U.S.C. § 1452(a); the Court has statutory 

authority to hear and determine this case under 28 U.S.C. §157(a); and venue is 

proper under 28 U.S.C. § 1409(a).

BACKGROUND

In the complaint, Plaintiff/Debtor No Rust Rebar, Inc. (“No Rust”) asserts the 

existence of an oral option to purchase certain real property in the City of Pompano 

(the “Property”) from Green Tech. In March 2021, after litigation between the parties 

over this alleged oral option had been pending for more than four years, No Rust filed 

a voluntary Chapter 11 bankruptcy petition and removed the case to this Court. Only 

Count III remains, pursuant to which No Rust seeks specific performance requiring 

Green Tech to consummate the sale of the Property to No Rust pursuant to the alleged 

oral option. The parties previously filed cross motions for summary judgment, which 

were denied.2 

 While this case was initially filed as a chapter 11, for various reasons, the 

Court converted it to a chapter 7.3 The chapter 7 Trustee and Green Tech ultimately 

2 (Adv. Doc. 72).

3 (Doc. 193).

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entered into a settlement agreement4 that would permit the Trustee to sell the 

Property, require the parties to execute mutual releases, and require the parties to 

dismiss this adversary. The settlement agreement provides in paragraph 3, however,

that it “shall be subject to and conditioned upon” the Court entering a final order 

“which has not been stayed and as to which order... the time to appeal... has expired 

and as to which no appeal... has been taken.” The Court granted the Rule 9019 motion 

to approve the settlement,5 but the order was appealed,6 and therefore the settlement 

agreement remains subject to and conditioned upon the outcome of the appeal. 

ANALYSIS

To find refuge from this quagmire, Green Tech seeks dismissal, arguing the 

adversary is moot pursuant to Article III, § 2 of the U.S. Constitution or under 

theories of equitable mootness. These arguments, however, are simply inadequate to 

deliver the relief Green Tech desires. 

I. Constitutional Mootness.

Green Tech argues that, under Article III, § 2 of the U.S. Constitution, “[a] case 

is moot when the issues presented are no longer live or the parties lack a legally 

cognizable interest in the outcome.” Desert Fire Prot. v. Fontainebleau Las Vegas 

Holdings, LLC (In re Fontainebleau Las Vegas Holdings, LLC), 434 B.R. 716, 738-739 

(S.D. Fla. 2010) (quoting BankWest, Inc. v. Baker, 446 F.3d 1358, 1364 (11th Cir. 

4 (Doc 218, Exhibit A).

5 (Doc. 257).

6 (Doc. 268).

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2006)). Since federal courts are limited to deciding active cases and live controversies, 

if the parties have no legally cognizable interest in the outcome of a case, or if there 

are no longer “live” issues, then the Court lacks jurisdiction and must dismiss. “When 

considering whether a court has jurisdiction or is required to dismiss a case for 

mootness, the court considers the subsequent events and the facts existing at the 

present time, not at the time the complaint was filed.” See Jews for Jesus, Inc. v. 

Hillsborough Cnty. Aviation Auth., 162 F.3d 627, 629 (11th Cir. 1998). 

Green Tech argues that there is no live controversy because the parties have 

entered into a settlement agreement and the conversion of the case to chapter 7 moots

the specific performance remedy sought in the adversary because the chapter 7 

Trustee is not “in the business of making real estate investments” and is unable “to 

pay for the Property” were she to prevail. 

There are numerous problems with Green Tech’s arguments. Foremost, while 

the parties have entered into a settlement agreement and the Court has approved it, 

the parties agreed the settlement agreement “shall be subject to and conditioned 

upon” the Court entering a final order “which has not been stayed and as to which 

order... the time to appeal... has expired and as to which no appeal... has been taken...” 

However, an appeal has been taken and is pending, so the settlement remains 

conditional. Naturally, should the appeal be successful, the settlement would be void, 

and at that point, the controversy would still be “live.”

The arguments that the Trustee is not “in the business of making real estate 

investments” and is “unable to pay for the Property” were she to prevail are factual 

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issues in support of which Green Tech offers no evidence and in any event are not 

dispositive, even if true. The Trustee did not voluntarily dismiss this adversary when 

she had an opportunity to do so and instead negotiated a provision that includes

dismissal in exchange for consideration. The Court need not surmise the Trustee’s 

strategy in doing so but concludes by virtue of the terms of the settlement agreement 

itself that the parties attribute some value to the claim. If the appeal of the order 

approving the settlement agreement is successful, there is no reason for the Court to 

believe the Trustee will not seek to extract some value in exchange for dismissal or, 

even if the likelihood of prevailing in this adversary is remote, seek ways to try the 

case and finance the purchase of the Property. In the end, Green Tech’s argument 

relies on conjecture, which cannot be the basis for a finding of constitutional 

mootness. 

II. Equitable Mootness.

Green Tech next argues that the case should be dismissed under the doctrine 

of equitable mootness, a judicially created doctrine, which, unlike Article III 

mootness, is prudential and not jurisdictional.7 “Equitable mootness is a 

discretionary doctrine that permits courts sitting in bankruptcy appeals to dismiss 

challenges (typically to confirmation plans) when effective relief would be 

7 Equitable mootness is a court created doctrine concerning a party’s rights on the merits, 

rather than the court’s authority to adjudicate. Even when a litigant satisfies Article III’s 

constitutional standing requirements, a federal court may refuse to adjudicate its claims for relief 

under prudential principles where the relief is premised upon questions of broader social import, as 

opposed to those dealing with specific individual rights. See generally United States v. Windsor, 570 

U.S. 744, 760 (2013); Lexmark Int’l Inc. v. Static Control Components, Inc., 572 U.S. 118, 127 n.3 

(2014); Warth v. Seldin, 422 U.S. 490, 501 (1975). 

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impossible.” In re Bayou Shores SNF, LLC, 828 F.3d 1297, 1328 (11th Cir. 2016). It 

“reflects a court’s concern for striking the proper balance between the equitable 

considerations of finality and good faith reliance on a judgment and the competing 

interests that underlie the right of a party to seek review of a bankruptcy court order 

adversely affecting him.” First Union Real Estate Equity & Mortg. Invs. v. Club 

Assocs. (In re Club Assocs.), 956 F.2d 1065, 1069 (11th Cir. 1992). 

Green Tech relies principally upon Liquidity Sols., Inc. v. Winn-Dixie Stores, 

Inc. (In re Winn-Dixie Stores, Inc.), 377 B.R. 322, 330 (M.D. Fla. 2007). which sets

forth the following seven factors in analyzing equitable mootness of a bankruptcy 

appeal:

(1) the interests of finality and the passage of time;

(2) whether there has been a comprehensive change in the circumstances;

(3) whether a stay has been obtained and if not, why not;

(4) whether the debtor's reorganization plan has been substantially 

consummated and if so, what type of transactions have been consummated;

(5) the type of relief sought;

(6) the effect of granting such relief on third parties not currently before the 

court; and

(7) the threat to the re-emergence of the debtor as a revitalized entity

Without citing any legal authority, Green Tech attempts to apply the appellate 

equitable mootness doctrine to this adversary proceeding. The Court is loath to do so. 

It is clearly apparent from the factors set forth in Liquidity themselves, that equitable 

mootness generally applies to the narrow circumstances of an appeal of an order 

confirming a chapter 11 plan. This Court sees no basis to apply the doctrine to this 

adversary proceeding and could reject Green Tech’s argument on that basis alone. 

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However, to humor Green Tech’s argument, the Court will address the Liquidity 

Solutions factors in turn.

First, although Green Tech makes a strained attempt to do so, the interests of 

finality cannot apply in a circumstance where the terms of the settlement agreement 

itself prevent the very finality Green Tech seeks. The fact that time has passed and 

“Green Tech has been deprived of possession and the use of [the Property] as well as 

the inability for the Property to produce income for more than 6 years,” cannot be 

said to have been caused by the conversion of the case to chapter 7 or the fact that 

the order approving the settlement was appealed, preventing finality and dismissal 

of this adversary. 

Second, the conversion of the case to chapter 7 is not a “comprehensive change 

in the circumstances.” It simply results in the Trustee controlling the adversary 

instead of the Debtor. 

Third, while it is true there has been no stay pending the appeal of the order 

approving the settlement, the terms of the settlement dictate the order is not final 

and the settlement remains conditioned upon the outcome of the appeal. 

Fourth, the notion that Green Tech has “substantially consummated the 

[s]ettlement” attempts to apply a legal term involving substantial consummation of 

a confirmed plan to a settlement agreement. Green Tech offers no legal support for 

doing so, and this Court will not do so. 

Fifth, Green Tech argues “the Trustee does not have the financial ability to 

exercise” the alleged option so no “relief” can be provided. As the Court has already 

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concluded, Green Tech’s argument in this regard is conclusory with no factual support 

and not dispositive of the issue in any event. 

Sixth, while the effect of dismissal on the City of Pompano and Broward 

County may be beneficial, the Court is not aware of anything preventing Green Tech, 

the title owner of the Property, from “address[ing] the code violations, fines and 

outstanding utility bills.” 

Finally, while there is no threat to the re-emergence of No Rust as a revitalized 

entity, Green Tech’s argument misunderstands this factor. The issue is whether 

allowing an appeal of an order confirming a plan to continue would threaten the reemergence of a revitalized debtor. There is no confirmed plan so this factor simply 

has no application here and cannot be said to weigh in favor of finding equitable 

mootness.

Green Tech further argues that this adversary proceeding has become 

equitably moot because the main case was converted to chapter 7. Generally 

speaking, the doctrine of equitable mootness “permits courts sitting in bankruptcy 

appeals to dismiss challenges when (typically to confirmation plans) effective relief 

would be impossible.” Ullrich v. Welt (In re Nica Holdings, Inc.), 810 F.3d 781, 786 

(11th Cir. 2015) (parentheticals omitted). Naturally, issues that are exclusive to one 

chapter of the Bankruptcy Code are indeed moot upon conversion to another chapter. 

However, if the bankruptcy court can provide relief under the chapter to which the 

case is converted, then the court is entitled to do so. J.B. Lovell Corp. v. Carlisle Corp. 

(In re J.B. Lovell Corp.), 876 F. 2d 96, 98 (11th Cir. 1989) (citing Technical 

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Fabricators, Inc. v. Lyman Steel Co., Inc. (In re Technical Fabricators), 65 B.R. 197, 

199 (S.D. Ala. 1986)).

Here, the Trustee still retains control over the Debtor’s interest in this 

litigation and is free to continue to pursue it. There is no reason that this adversary 

proceeding could not continue merely because the main case was converted to chapter 

7. The fact that Green Tech does not believe the Trustee should pursue the litigation 

or that she is not likely to succeed is simply irrelevant. The rights of the parties 

remain uncertain, and relief is available under chapter 7. Indeed, Green Tech’s 

motion for summary judgment was denied, and material issues remain to be resolved, 

none of which has changed as a result of the conversion. In fact, but for the settlement 

agreement and appeal, this case may proceed to trial.8 Whether it will is a decision 

to be made by the Trustee if the order approving the settlement is overturned. In 

other words, effective relief is not “impossible” post conversion, and so the case is not 

moot under this theory either. 

III. Conclusion. 

For the reasons stated, the Court finds that this adversary proceeding is not 

moot. Accordingly, the Court hereby ORDERS: 

Green Tech’s Motion to Dismiss (Doc. 115) is DENIED. 

# # #

Copies to:

All parties in interest.

8 A fact which Green Tech acknowledged and even welcomed at the hearing on this Motion. 

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