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*

 This disposition is not appropriate for publication.

Although it may be cited for whatever persuasive value it may

have (see Fed. R. App. P. 32.1), it has no precedential value. 

See 9th Cir. BAP Rule 8013-1.

-1-

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. OR-10-1523-JuClPa

)

THE MARSHALL GROUP, LLC, ) Bk. No. 08-34585

)

Debtor. ) 

______________________________)

MARK R. MARSHALL; CATHY JO )

MARSHALL, )

)

Appellants, )

)

v. ) M E M O R A N D U M*

)

THE MARSHALL GROUP, LLC; )

CONRAD MYERS, Trustee; UNITED )

STATES TRUSTEE, )

)

Appellees. )

______________________________)

Argued and Submitted on October 20, 2011

at Portland, Oregon

Filed - November 8, 2011

Appeal from the United States Bankruptcy Court

for the District of Oregon

Honorable Randall L. Dunn, Bankruptcy Judge, Presiding ____________________________

Appearances: Appellant Mark R. Marshall argued for himself 

and Cathy Jo Marshall pro se;

Peter C. McKittrick, Esq., of Farleigh, Wada &

Witt argued for Appellee Conrad Myers, Trustee.

______________________________

FILED

NOV 08 2011

SUSAN M SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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** Hon. Scott C. Clarkson, Bankruptcy Judge for the Central

District of California, sitting by designation.

1

 Unless otherwise indicated, all chapter, section and rule

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. 

“Rule” references are to the Federal Rules of Bankruptcy

Procedure and “Civil Rule” references are to the Federal Rules of

Civil Procedure.

-2-

Before: JURY, CLARKSON,** and PAPPAS Bankruptcy Judges.

At issue in this appeal is the revocation of a confirmation

order. The order confirming the second amended plan of

reorganization dated June 21, 2010 (as modified September 7,

2010) (the “Plan”) filed by appellee, Conrad Myers, the

chapter 111 trustee, was entered on September 30, 2010. 

Appellants, Mark R. Marshall and Cathy Jo Marshall (the

“Marshalls”), did not appeal that order or move to stay

implementation of the Plan. They subsequently moved for

revocation of the order confirming the Plan under § 1144, which

the bankruptcy court denied. The Marshalls now appeal that

decision. 

The effective date of the Plan was October 15, 2010 (the

“Effective Date”). Since then, numerous transactions have been

completed or implemented according to the Plan and distributions

have commenced. As a result, we conclude that the Plan has been

substantially consummated within the meaning of § 1101(2). We

further conclude that we cannot fashion effective relief for the

Marshalls on appeal and, even if we could, it would be

inequitable to do so under these circumstances. Accordingly, we

DISMISS this appeal as moot.
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Alternatively, even if this appeal were not moot, we would

AFFIRM the bankruptcy court’s decision.

I. FACTS

The facts leading up to the bankruptcy of The Marshall

Group, LLC are not fully developed in the record, but are

lengthy and complex. The Marshalls were the sole members of the

Marshall Group, LLC. The Marshall Group, LLC was the surviving

entity under a roll up consolidation agreement entered into on

July 31, 2008, in contemplation of the filing of bankruptcy. 

The parties to that agreement were: (1) The Marshall Group,

LLC; (2) Marshall Medical, LLC; (3) Lincoln City Immediate

Health Care, LLC; (3) Redmond Immediate Health Care, LLC;

(4) McMinnville Immediate Health Care, LLC; (5) Marshall

McMinnville, LLC; and (6) M&CJ, LLC.

Through some of these entities, the Marshalls owned and

developed commercial property, including several parcels which

were located in the business district of McMinnville, Oregon

(the “McMinnville Property”). At some point, the Marshalls

hired Keeton-King Construction, Inc. (“KKC”) to perform

demolition and construction work on their various properties. 

The record shows that the Marshalls also entered into several

transactions with Arland and Ima Jean Keeton (the “Keetons”)

which we describe below.

The Marshalls were also engaged in the health care business

through their health care-named limited liability companies.

//

//

//
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2 The Lincoln City clinic was closed prior to debtor’s

bankruptcy filing.

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They operated urgent care clinics in Lincoln City,2 McMinnville

and Redmond, Oregon. The Marshalls apparently became involved

in the health care business after they obtained a $5 million

business and industry conditional commitment from the United

States Department of Agriculture to build two medical buildings

in 2002. Under the terms of the commitment, one of the

buildings had to be located in a rural area. Because the

Marshalls’ McMinnville Property did not meet that requirement,

with the assistance of KKC, the Marshalls located property in

Redmond, Oregon. In addition, construction of the buildings had

to be completed within 540 days. Otherwise, the Marshalls would

lose the loan guarantee which was a critical part of the project

plan.

KKC was involved with the construction of the health care

buildings on the McMinnville and Redmond properties. Numerous

disputes arose between the Marshalls and KKC in connection with

the development of the McMinnville Property. In late 2007, KKC

filed a $1.7 million construction lien claim against the

McMinnville Property. Thereafter, KKC commenced an arbitration

proceeding regarding construction related claims between the

parties with respect to the lien. KKC made claims for unpaid

work while the Marshalls alleged that the project took

substantially longer than expected and far exceeded the

contractually agreed upon construction costs. Presumably

because of the extra costs and delays, the McMinnville Property
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3 The Marshalls state in their opening brief that they were

in default with PremierWest Bank which had a consensual lien on

the McMinnville Property. They then allege that the bank sold

its interests in the loans collateralized by the McMinnville

Property to the Keetons and then that the Keetons formed a new

company, AJK, LLC to harbor that loan. There is no evidence in

the record that supports these facts.

4

 We take judicial notice of the Keetons’ motion for relief

from stay at Dkt. No. 105 which contains this information. See

Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R.

227, 233 n.9 (9th Cir. BAP 2003).

-5-

was at risk. The Marshalls’ opening brief suggests foreclosure

of the McMinnville Property by the Keetons was imminent.3

In addition to the arbitration proceeding, the Keetons and

KKC as plaintiffs, and the Marshalls, Marshall McMinnville, LLC,

M&CJ, LLC, Endeavors Inc., Marshall Properties, LLC, The

Marshall Group, LLC, and Lake Plaza, LLC, as defendants, were

parties in a Yamhill County Circuit Court proceeding. The

parties’ dispute in the circuit court proceeding involved, among

other things, breach of contract and foreclosure of trust

deeds.4

Bankruptcy Events

On September 4, 2008, The Marshall Group, LLC (which

included Marshall McMinnville, LLC, M&CJ, LLC, McMinnville

Immediate Health Care, LLC and Redmond Immediate Health Care,

LLC) filed a chapter 11 petition. Schedule A showed that debtor

owned real property valued at $8,970,000 which consisted of

commercial office buildings in McMinnville. On Schedule D,

debtor listed secured debt of $7,405,419, of which $6,399,162

was unsecured. Debtor listed $490,528 in priority debt on

Schedule E representing unpaid employment taxes. On Schedule F,
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5

 A significant number of the unsecured creditors were

patients who were owed refunds in small amounts.

6 AJK Properties, LLC was evidently owned by the Keetons.

7

 We take judicial notice of the adversary complaint because

it is relevant to this appeal. In re Atwood, 293 B.R. at 233

n.9. It is unclear whether the Keeton-King adversary complaint

was identical to the complaint that was filed prepetition in the

Yamill County Circuit Court.

-6-

debtor listed $4,738,683 in unsecured debt.5 At the time of

debtor’s filing, it was operating the two urgent care clinics

located in McMinnville and Redmond. The clinics were suffering

from issues with accounts receivable and cash flow. In

addition, debtor was still involved in the arbitration

proceeding with KKC over the construction costs associated with

the McMinnville Property and the state court case was pending.

On September 23, 2008, the United States Trustee (“UST”)

appointed a committee of unsecured creditors (the “Committee”). 

A. The KKC Adversary Proceeding

On January 13, 2009, the Keetons, KKC and AJK Properties,

LLC6

 (hereinafter we refer to these parties as “Keeton-King”)

filed an adversary proceeding against the Marshalls

individually, debtor and other Marshall related entities. The

complaint, which was over sixty pages long, alleged several

claims for relief, including breach of contract, foreclosure of

trust deeds, and foreclosure of assignment of rents.7

The background facts alleged in the complaint show that 

the Marshalls had personally executed two promissory notes in

favor of Keeton-King for $980,000 and that Keeton-King was owed

for construction work performed on numerous properties,
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8 In the Marshalls’ opening brief, they maintain that they

were “forced” into this new agreement which was written by the

Keeton’s CPA, Michael W. Holland, who actually had his license

revoked at the time. The Marshalls state that Holland is now a

convicted felon and has been reprimanded by the Oregon State Bar

for generating the April 2 “agreement” and practicing law without

a license. There is no evidence in the record that supports

these statements. In any event, whether or not these alleged

facts are true does not matter for purposes of this appeal.

-7-

including on the McMinnville project (collectively, these debts

are referred to in the complaint as the “Global Debt”). 

Further, Keeton-King had loaned another Marshall related entity,

M&CJ, LLC, $1 million dollars (the “Million Dollar Loan”). When

none of these debts were paid, the Keeton-King parties and the

Marshalls and their related entities entered into an agreement

in April 2007.8 That agreement extended the due date for the

Global Debt and the Million Dollar Loan to 120 days after the

completion of the McMinnville project. In return, the Marshalls

and their LLCs agreed to be jointly and severally liable to the

Keeton-King parties. Finally, the complaint states that after

the April 2007 agreement, the Keetons loaned the Marshalls and

their LLCs additional sums which included making their interest

payments to PremierWest Bank for the $3.2 million loan obtained

by debtor that had been increased to $3.725 million. 

All together, Keeton-King asserted claims which were

secured by debtor’s real property in excess of $5 million and

claimed to hold unsecured debts in the amount of $6 million. 

Debtor and its co-defendants asserted counterclaims seeking

$1 million and attorney’s fees.

//
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B. The Arbitration Proceeding Concludes

On February 24, 2009, the bankruptcy court granted KKC

relief from stay to continue with the arbitration proceedings.

In September 2009, KKC obtained an arbitration award

against the Marshalls for $2.7 million plus interest and

attorney’s fees. The final award was entered on October 6,

2009. The Marshalls moved to vacate the award, arguing that KKC

procured the award by fraud, corruption, or other undue means. 

The factual basis for the Marshalls’ allegation was that KKC had

assisted them in locating the property upon which to build their

Redmond clinic. According to the Marshalls, it came to light

that the Keetons were co-owners of other properties in the

Redmond development where the clinic was eventually located. 

The Marshalls maintained that KKC had performed the construction

work on the Redmond property first for the benefit of the

Keetons and used construction loan proceeds from the Marshalls

to make capital improvements to their properties.

The state court directed the arbitrators to reopen the case

and hear the Marshalls’ fraud arguments. After doing so, the

arbitrators dismissed the Marshalls’ motion to vacate and the

state court entered a final order confirming the arbitration

award in June 2010.

C. The Appointment Of The Trustee

On March 27, 2009, the UST filed a motion to dismiss or

convert the bankruptcy case to one under chapter 7. The motion

was mostly based on debtor’s failure to pay taxes, including

employment tax obligations, and alleged unauthorized payments

going from debtor to Mr. Marshall and vice versa. Prior to the
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9 We take judicial notice of the trustee’s report which is

at Dkt. No. 209. In re Atwood, 293 B.R. at 233 n.9.

-9-

hearing on that motion, the UST filed a motion to appoint a

chapter 11 trustee in the event the court found dismissal or

conversion inappropriate.

Numerous parties, including debtor’s attorney, appeared at

the April 28, 2009 preliminary hearing on the UST’s two motions. 

After the preliminary hearing, and before the final hearing, the

parties stipulated that (1) the UST’s motion to dismiss would be

denied, (2) the motion to convert was reserved pending the

chapter 11 trustee’s report, and (3) the UST’s alternative

motion to appoint a chapter 11 trustee was granted. The

stipulation further provided that the chapter 11 trustee would

promptly investigate the financial circumstances of debtor and

file an initial report not later than four weeks after the date

of acceptance of appointment. The court approved the

stipulation and on May 8, 2009, Conrad Myers was appointed the

trustee.

The trustee took several months to investigate the

operations and cash flow from the urgent care clinics. In a

July 31, 2009 report, the trustee concluded that the clinics

could be turned around and eventually sold for the benefit of

the creditors.9 In addition, the trustee elected not to commit

the limited cash flow of the estate to engage in costly

litigation with KKC. Accordingly, the trustee engaged in

negotiations with the Keeton-King parties to settle their

secured and unsecured claims asserted in the adversary
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proceeding.

In March 2010, the trustee filed a notice of intent to

compromise the Keeton-King claims. At the same time, the

trustee filed a notice of intent to sell the McMinnville

Property to Keeton-King by credit bid, free and clear of liens. 

The trustee also filed a motion for an order authorizing debtor

to enter into a lease agreement with Keeton-King so that it

could continue to operate the McMinnville urgent care clinic on

the property. Finally, the trustee filed a motion for a

determination that the Keeton-King parties were good faith

purchasers within the meaning of § 363(m).

The basic structure of the proposed settlement was as

follows: Keeton-King would be allowed a $4.5 million secured

claim; the trustee would convey the McMinnville Property to

Keeton-King free and clear of all liens; the trustee and KeetonKing would enter into a lease agreement for the McMinnville

Property with Keeton-King as landlord and debtor as tenant;

Keeton-King would be allowed an unsecured claim in an amount

determined by the parties or the court; and the estate and

Keeton-King would enter into a settlement agreement and mutual

release. 

The Marshalls filed an objection to the trustee’s proposed

sale and compromise, asserting that (1) there was a substantial

basis for overturning the arbitration award; (2) the settlement

improperly resolved the claims without adequate information;

(3) the settlement included property that was not part of the

estate; and (4) the value of the McMinnville Property exceeded

the amount of any asserted claims by the Keeton-King parties. 
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Although they filed this objection, the Marshalls did not appear

at the June 14, 2010 hearing, produce any witnesses or offer any

evidence in support of their alleged value of the McMinnville

Property. 

The bankruptcy court approved the compromise, the lease

arrangement, and the sale free and clear of liens and made a

good faith determination by separate orders entered on June 28,

2010. Those orders were not appealed and became final orders in

the case.

D. The Confirmation Of The Chapter 11 Trustee’s Plan

A week before entry of these orders, on June 21, 2010, the

trustee filed the Second Amended Disclosure Statement and Plan

of Reorganization. Generally, the Plan provided for the

continued operation of the urgent care clinics so that they

could eventually be sold for the benefit of the creditors. 

Through the Plan, the chapter 11 trustee was appointed as the

Liquidating Trustee and was given the flexibility to exercise

reasonable business judgment to determine when to sell the

clinics.

Under the Plan, the Marshalls comprised the interest

holders class (Class 7) - each held a 50% membership interest in

debtor. They received no payment for their membership interests

and, therefore, they were impaired under § 1124 and deemed to

reject the plan under § 1126(g). Consequently, the Marshalls

were not entitled to vote on the Plan.

Objections to the Plan were due on August 31, 2010. The

Marshalls did not file an objection to the Plan or appear at the

confirmation hearing. No testimony was taken during the
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confirmation hearing and the bankruptcy court placed its

findings and conclusions on the record, deciding that all the

statutory requirements for confirmation of the Plan were met. 

On September 30, 2010, the court entered the order confirming

the Plan. The Marshalls did not appeal the confirmation order

or request a stay of implementation of the Plan. 

On the Effective Date of the Plan (October 15, 2010),

debtor became the reorganized debtor and the Marshalls’

membership interests were canceled and reissued to the Marshall

Group, LLC Liquidating Trust (the “Liquidating Trust”). The

membership interests are currently held for the benefit of

priority and unsecured creditors. Meanwhile, the clinics have

been operating and payments have been made to administrative and

priority claimants. In addition, the Plan vested certain

secured and unsecured creditors (or creditor representatives)

with the right to be on an advisory committee (the “Advisory

Committee”). The Advisory Committee’s role was to act in the

capacity of a board of directors and oversee the Liquidating

Trustee and manager of the day-to-day operations, Performance

Improvement Resources. At the time of this appeal, the

creditors, Liquidating Trustee, and Advisory Committee have been

following the provisions of the Plan for over a year.

E. The Marshalls’ Motion To Deny And Revoke The Confirmation 

Order

On October 15, 2010, the Marshalls filed their motion to

deny and revoke the confirmation order confirming the trustee’s

Plan. In their motion, the Marshalls requested entry of an

order that provided for (1) the immediate stay of the Plan
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10 The Marshalls refer to themselves as debtors-inpossession, however, the Marshalls were not in bankruptcy

themselves.

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confirmation; (2) a hearing as provided under § 1144; and

(3) restoration of the Marshalls’ debtor-in-possession status or

an immediate appointment of a new trustee. 

The Marshalls alleged that the proper procedures were not

used for their removal as debtors-in-possession;10 that the

trustee had not carried out his fiduciary responsibilities and

had grossly mismanaged the businesses; and that the Plan had not

been offered in good faith. Finally, the Marshalls alleged that

the arbitration award was obtained by fraud and that there was

an ongoing RICO criminal investigation concerning the actions of

KKC and the Keetons during the arbitration proceedings.

The trustee filed an opposition, asserting that the

Marshalls had to show that the trustee procured the confirmation

order by actual fraud to succeed on their motion under § 1144. 

The trustee argued that the court should be “very cautious” in

revoking the Plan when the Marshalls did not have a right to

vote and none of the voting creditors who were allegedly

defrauded joined or supported their motion.

At the December 1, 2010 hearing on the Marshalls’

attorney’s motion to withdraw, the court conducted a

“preliminary hearing” on the Marshalls’ motion to deny or revoke

the Plan. The bankruptcy court clarified the issues and the

corresponding evidence that was to be presented at the final

evidentiary hearing scheduled for December 14, 2010. First, the

bankruptcy court made clear that the arbitration award was a
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11 It is unclear what subsection of Civil Rule 60(b) the

court was referring to.

12 Three days after the Marshalls filed their motion seeking

revocation of the confirmation order, the trustee filed a motion

to settle and compromise Keeton-King’s unsecured claims which was

also scheduled for hearing on December 14, 2010. The Marshalls

objected to the trustee’s proposed settlement. The bankruptcy

court overruled the Marshalls’ objection to the settlement at the

December 14, 2010 hearing. The court advised the Marshalls that

if they ever had specific documentation after the criminal

proceedings were finished, they could move for reconsideration of

the order at that time.

In their opening brief, the Marshalls state that an issue on

appeal is whether the bankruptcy court erred in denying their

objection to the trustee’s motion to compromise Keeton-King’s

unsecured claims. However, they did not designate this order in

their notice of appeal and that order has become a final order in

the case. Evidently, in an abundance of caution (or oversight),

the trustee’s brief addresses the merits of this order. It is

unnecessary for us to consider these arguments.

-14-

final judgment and any issues related to that award would not be

considered. Mr. Marshall acknowledged to the court that the

arbitration award was final and that they would not have another

opportunity to present evidence to the bankruptcy court so that

it could be overturned. 

In addition, the bankruptcy court stated that it was

treating the Marshalls’ motion to revoke the plan as a motion

under Civil Rule 60(b) because there was no testimony at the

confirmation hearing.11 The court further explained that the

Marshalls had to show that the court was wrong in confirming the

Plan under § 1129(a).

At the December 14, 2010 final evidentiary hearing,12 the

court reiterated that it would not take evidence regarding the

Keeton-King transactions, whether related to the settlement of
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13 This focus was inconsistent with the bankruptcy court’s

earlier directive to Mr. Marshall that it was treating the

Marshalls’ motion for revocation of the confirmation order under

Civil Rule 60(b). In that regard, the court stated that

Mr. Marshall had to demonstrate how the court’s ruling was

“wrong” rather than how the confirmation was “procured by fraud”

within the meaning of § 1144. However, reliance on Civil Rule

60(b) or § 1129(a) to revoke a confirmation order is contrary to

Ninth Circuit law. Dale C. Eckert Corp. v. Orange Tree Assocs.,

Ltd. (In re Orange Tree Assocs., Ltd.), 961 F.2d 1445, 1447

(9th Cir. 1992). In any event, the court’s error was harmless in

light of our decision to dismiss this appeal as moot. See Rule

9005 (incorporating Civil Rule 61 which states “At every stage of

the proceeding, the court must disregard all errors or defects

that do not affect any party’s substantial rights.”).

-15-

the adversary proceeding or in relation to the arbitration

proceeding. The court then focused on whether the confirmation

order was procured by fraud under § 1144.13 Mr. Marshall was

sworn in and testified, but the record reflects that his

testimony was about the alleged fraud of Keeton-King. The court

denied the Marshalls’ motion by order entered December 15, 2010. 

The Marshalls timely appealed.

II. JURISDICTION

The bankruptcy court had jurisdiction over this proceeding

under 28 U.S.C. §§ 1334 and 157(b)(2)(A) and (L). As set forth

below, we conclude that this appeal is moot. Therefore, we do

not have jurisdiction over the moot appeal. I.R.S. v. Pattullo

(In re Pattullo), 271 F.3d 898, 900 (9th Cir. 2001). If this

appeal were not moot, we have jurisdiction under 28 U.S.C.

§ 158. 

III. ISSUES

A. Whether this appeal is moot; and 

B. Whether the bankruptcy court erred by denying the
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Marshalls’ motion for revocation of the order confirming the

Plan.

IV. STANDARD OF REVIEW 

Mootness is a question of law reviewed de novo. S. Or.

Barter Fair v. Jackson Cnty., Or., 372 F.3d 1128, 1133 (9th Cir.

2004); Arnold & Baker Farms v. United States (In re Arnold &

Baker Farms), 85 F.3d 1415, 1418 (9th Cir. 1996).

We review the bankruptcy court’s decision to deny a motion

to revoke an order of confirmation for an abuse of discretion. 

Vicenty v. San Miguel Sandoval (In re San Miguel Sandoval),

327 B.R. 493, 511 (1st Cir. BAP 2005); Varde Inv. Partners, L.P.

v. Comair, Inc. (In re Delta Air Lines, Inc.), 386 B.R. 518

(Bankr. S.D.N.Y. 2008). We follow a two-part test to determine

objectively whether the bankruptcy court abused its discretion. 

United States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir.

2009). First, we “determine de novo whether the bankruptcy

court identified the correct legal rule to apply to the relief

requested.” Id. Second, we examine the bankruptcy court’s

factual findings under the clearly erroneous standard. Id. at

1262 n.20. We affirm the court’s factual findings unless those

findings are “(1) ‘illogical,’ (2) ‘implausible,’ or (3) without

‘support in inferences that may be drawn from the facts in the

record.’” Id. (internal quotation marks omitted). If the

bankruptcy court did not identify the correct legal rule, or its

application of the correct legal standard to the facts was

illogical, implausible, or without support in the record, then

the bankruptcy court abused its discretion. Id.
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V. DISCUSSION

A. Mootness

We consider first whether we have jurisdiction to entertain

the Marshalls’ appeal. The trustee asserts that this appeal is

both constitutionally and equitably moot. As the party

advocating mootness, the trustee bears the burden of proving

that there is no effective relief for us to provide. Palmdale

Hills Prop., LLC v. Lehman Comm. Paper, Inc. (In re Palmdale

Hills Prop., LLC), 654 F.3d 868, 2011 WL 3320429, at *4 (9th

Cir. 2011). 

We have previously described the constitutional and

equitable mootness rules in United States v. Gould (In re

Gould), 401 B.R. 415, 421 (9th Cir. BAP 2009), aff’d, 603 F.3d

1100 (9th Cir. 2010): 

Constitutional mootness derives from Article III of

the United States Constitution, which provides that

the exercise of judicial power depends on the

existence of a case or controversy. The doctrine of

constitutional mootness is essentially a recognition

of Article III’s prohibition against federal courts’

issuing advisory opinions. While the Article III

mootness doctrine has a ‘flexible character,’ it

applies when events occur during the pendency of the

appeal that make it impossible for the appellate court

to grant effective relief. If no effective relief is

possible, we must dismiss for lack of jurisdiction. 

A variation of the mootness rule, the equitable

mootness doctrine, applies when appellants ‘have

failed and neglected diligently to pursue their

available remedies to obtain a stay’ and circumstances

have changed so as to ‘render it inequitable to

consider the merits of the appeal.’

These rules, which affect our jurisdiction, apply in a § 1144

proceeding. See In re Delta Air Lines, 386 B.R. at 537 n.15

citing Chang v. Servico, Inc. (In re Servico, Inc.), 161 B.R.

297, 300–01 (S.D. Fla. 1993); Almeroth v. Innovative Clinical
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Solutions, Ltd. (In re Innovative Clinical Solutions, Ltd.),

302 B.R. 136, 141 (Bankr. D. Del. 2003) (applying equitable

mootness to dismiss a case brought under § 1144); S.N. Phelps &

Co. v. Circle K Corp. (In re Circle K Corp.), 171 B.R. 666,

669–70 (Bankr. D. Ariz. 1994) (dismissing § 1144 complaint on

grounds of mootness).

1. This Appeal Is Constitutionally Moot

 We may dismiss an appeal based on mootness when a

reorganization plan has been so substantially consummated that

effective relief is no longer available. See Arnold & Baker

Farms, 85 F.3d at 1419-20. “‘[S]ubstantial consummation means —

(A) transfer of all or substantially all of the property

proposed by the plan to be transferred has been transferred;

(B) assumption by the debtor or by the successor to the debtor

under the plan of the business or of the management of all or

substantially all of the property dealt with by the plan; and

(C) commencement of distribution under the plan.” § 1101(2). 

Here, numerous critical transactions have been completed or

implemented in accordance with the confirmed Plan: 

• Prior to confirmation, the McMinnville Property was 

sold to Keeton-King in satisfaction of its secured claims

pursuant to a court-approved compromise. The order approving

that sale was entered by a separate order which long ago became

a final order in this case. Part and parcel of that sale was

Keeton-King’s agreement to lease the McMinnville Property to

debtor so that it could continue to operate the McMinnville

urgent care clinic on the property. That order also is final

and cannot be undone. The sale and lease are critical to the
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14 The trustee had estimated that unsecured creditors would

receive a return of approximately ten to twenty percent.

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continued operation of the McMinnville urgent care clinic which

itself is a crucial component of the Plan. 

• On the Effective Date, the Marshalls’ equity interests

in debtor were extinguished and new membership interests were

issued in the name of the Liquidating Trust for the benefit of

the unsecured creditors. 

• On the Effective Date, all assets of debtor revested

in the reorganized debtor. 

• On the Effective Date, the Liquidating Trustee 

implemented the Plan provisions for the post-confirmation

operation of the clinics to increase their profitability and

enhance their value in preparation for an eventual sale. The

proceeds of the sale will be used to partially satisfy the

claims of unsecured creditors in accordance with the Plan.14 The

day-to-day operations of the clinics continue to be performed by

Performance Improvement Resources. 

• On the Effective Date, an Advisory Committee was

appointed. That committee has the authority to act as an

advisory board of directors and has the power of oversight of

the Liquidating Trustee and the manager of the reorganization

debtor. 

• Distributions have commenced. A distribution has been

made to administrative and priority claims, including that of

the Internal Revenue Service (“IRS”). There is approximately

$3,666 remaining on the IRS’s secured claim.
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These transactions and the disbursements to administrative

and priority creditors compel us to conclude that the Plan has

been substantially consummated. However, substantial

consummation by itself does not resolve the issue. We still

must consider whether we could grant effective relief. First

Fed. Bank of Cal. v. Weinstein (In re Weinstein), 227 B.R. 284,

289 (9th Cir. BAP 1998). 

The Marshalls have requested a myriad of novel forms of

relief given the order on appeal. They “suggest” that (1) the

chapter 11 bankruptcy was improper because the Keetons declared

themselves managing members of debtor; (2) the Keetons had no

standing in the case to join in the UST’s motion for the

appointment of a trustee; (3) the Keetons are not good faith

purchasers and any such finding should be “revoked”; (4) the

Keetons should be excluded from having any input into the

chapter 11 case; (5) no payments are due to the Keetons from

debtor; and (6) the trustee should be removed from the status as

a trustee for debtor and another trustee should be appointed to

review his activities. 

In essence, the Marshalls seek a “do over” of the entire

bankruptcy proceeding which they themselves commenced over three

years ago. The orders appointing the trustee and granting the

Keetons good faith purchaser status are final orders and, as

such, we do not revisit the merits of those orders in this

appeal. In addition, were we to grant the Marshalls’ remaining

“suggestions,” an unraveling of the underlying bankruptcy case

would occur and innocent third parties would be affected. Even

if there were some merit to the Marshalls’ argument — which
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there is not — an unraveling of the case would produce

unacceptable and inequitable results. 

Absent the negotiated agreements with Keeton-King, debtor

would once again become enmeshed in costly and protracted

litigation. Further, absent the lease agreement with KeetonKing for the McMinnville Property, the operations of the

McMinnville clinic would be put at risk. Without the

McMinnville clinic operations, the modest return to unsecured

creditors would further be reduced. 

In short, under these circumstances, the substantial

consummation of the Plan is the “event” that has occurred during

the pendency of this appeal that makes it impossible for us to

grant effective relief to the Marshalls. If no effective relief

is possible, we must dismiss this appeal for lack of

jurisdiction. 

2. The Appeal Is Equitably Moot

Even if we could fashion some effective relief, we conclude

that the Marshalls’ appeal is also equitably moot for several

reasons. First, there was only one objection to the Plan —

which was later withdrawn — and the Marshalls themselves never

objected to the Plan or even appeared at the confirmation

hearing. Second, it is undisputed that the Marshalls did not

appeal the confirmation order or seek a stay of the

implementation of the Plan. Next, as discussed above, the Plan

has been substantially consummated and the Marshalls’ requested

relief would affect both the rights of parties not before us in

this appeal and the success of the confirmed Plan. Finally, any

relief at this late date would undermine the strong policy
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15 The Marshalls’ motion was filed well within the 180-day

period.

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favoring the finality of confirmation orders that is recognized

in this circuit. See Great Lakes Higher Educ. Corp. v. Pardee

(In re Pardee), 193 F.3d 1083, 1087 (9th Cir. 1999). Therefore,

even if we could fashion effective relief, it would be

inequitable to do so under these circumstances. 

In sum, upon consideration of the principles of both

constitutional and equitable mootness, we conclude that this

appeal is moot and should be dismissed for lack of jurisdiction. 

B. The Merits

Even if this appeal were not moot, we affirm the bankruptcy

court’s decision on the merits. 

Absent an appeal, the parameters for revocation of a plan

are circumscribed by § 1144 which provides:

On request of a party in interest at any time before

180 days after the date of the entry of the order of

confirmation, and after notice and a hearing, the

court may revoke such order if and only if such order

was procured by fraud. An order under this section

revoking an order of confirmation shall-

(1) contain such provisions as are necessary to

protect any entity acquiring rights in good faith

reliance on the order of confirmation; and

(2) revoke the discharge of the debtor.

Section 1144 makes clear that “[t]he sole permissible basis [for

revocation] is fraud that is complained of within 180 days. If

there is no fraud, the order cannot be revoked.”15 Official

Comm. of Unsecured Creditors v. Michelson (In re Michelson),

141 B.R. 715, 723 (Bankr. E.D. Cal. 1992). 

Here, the record does not show that the order confirming
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the plan was “procured by fraud.” The Marshalls simply

reiterate the fraud of the Keetons and Keeton-King in their

opening brief, but then ask this Panel to conclude that the

trustee must have participated in the fraud because he turned a

“blind eye” to obvious questions raised by the Marshalls’

unsubstantiated allegations especially when: the trustee

(1) declared the Keetons a “good faith purchaser”; (2) testified

falsely about the Committee’s involvement in the settlement of

the Keeton-King unsecured claims; and (3) ignored that KKC was a

partner in ABC Partners, LLC; that ABC Partners, LLC had

collateralized Marshall McMinnville, LLC properties on March 23,

2006 and that the Marshall McMinnville, LLC was “missing”

monies. 

The record does not support the conclusion the Marshalls’

advocate. It was the bankruptcy court, not the trustee, that

determined that Keeton-King was a good faith purchaser after a

lengthy hearing. The Marshalls did not appear at the hearing

for this determination or appeal the ruling. Further, there is

nothing in the record that supports the Marshalls’ allegation

that the trustee testified falsely about the Committee’s

involvement in the proposed settlement of the Keetons and

Keeton-Kings unsecured claims. The Committee’s counsel

represented at the December 14, 2010 hearing that the Committee

withdrew its letter objection to the settlement. Counsel also

acknowledged that the Committee had gone over the facts and all

of the issues and did not object to the settlement. 

The Marshalls also provided no support for their assertion

that the trustee knew or should have known about the
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transactions between Keeton-King and ABC Partners, LLC or the

alleged “missing monies.” We found no evidence in the record

that even comes close to suggesting that the trustee somehow

used this information to perpetuate a fraud upon the creditors

or the court when he proposed the Plan. 

In short, bald assertions and conclusory statements do not

prove that the confirmation order was “procured by fraud.” 

There is simply no evidence in the record that the trustee

engaged in a fraudulent plan or scheme or that the creditors or

bankruptcy court were actually deceived by any fraudulent

misrepresentations, false statements, or omissions in connection

with the confirmation of the Plan. Accordingly, the bankruptcy

court properly denied the Marshalls’ motion to revoke the Plan.

Because the Marshalls also seek relief from the Plan in

their opening brief under § 1129(a) and Civil Rule 60(b) and

(d), we reiterate that an order confirming a plan can only be

revoked under § 1144. In re Orange Tree Assocs., Ltd., 961 F.2d

at 1447. Thus, neither § 1129(a) nor Civil Rule 60(b) provides

an alternative basis for revocation of the Plan. In any event,

the Marshalls offered no coherent basis for the reversal of the

confirmation order under § 1129 or Civil Rule 60(b) or (d). 

VI. CONCLUSION

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

Even if this appeal were not moot, we would AFFIRM the

bankruptcy court’s decision on the merits.