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NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. NC-13-1299-PaJuKu

)

THE ZUERCHER TRUST OF 1999, ) Bankr. No. 12-32747-HLB

)

Debtor. )

______________________________)

)

THE ZUERCHER TRUST OF 1999, )

)

Appellant, )

)

v. ) M E M O R A N D U M1

)

PETER S. KRAVITZ, Chapter 11 )

Trustee; WIN WIN ALEXANDRIA )

UNION, LLC, )

)

Appellees. )

______________________________)

Argued and Submitted on October 23, 2014,

at San Francisco, CA

Filed - December 17, 2014

Appeal from the United States Bankruptcy Court

for the Northern District of California

Honorable Hannah L. Blumenstiel, Bankruptcy Judge, Presiding

 

Appearances: Bradley Kass of Kass & Kass Law Offices argued for

appellant The Zuercher Trust of 1999; Reagan

Elizabeth Boyce of Ezra Brutkus Gubner LLP argued

for appellee Peter S. Kravitz; Elsa Horowitz of

Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP

argued for appellee Win Win Alexander Union, LLC.

 

Before: PAPPAS, JURY, and KURTZ, Bankruptcy Judges.

FILED

DEC 17 2014

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

1 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.
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Chapter 112 debtor The Zuercher Trust of 1999 (“Debtor”)

appeals the order of the bankruptcy court approving the trustee’s

sale of two real properties under § 363. We conclude that the

bankruptcy court did not err in finding in the sale order that

creditor Win Win Alexandria Union, LLC (“Win Win”) at the time of

the sale order was a good faith purchaser for purposes of

§ 363(m). However, consistent with our precedent, we must REMAND

this matter to the bankruptcy court to decide whether it should

reconsider its good faith finding based upon events and facts

occurring after entry of the sale order. 

I. FACTS

A. Background

Debtor, a business trust, owns and develops real estate in

California. Its managing member is Monica Hujazi (“Hujazi”). At

issue in this appeal is the bankruptcy court’s approval of the

sale of two Los Angeles properties owned by Debtor, one located

on Alexandria Avenue (the “Alexandria Property”), and the other

on Union Avenue (the “Union Property” and, together, the

“Properties”).

On June 24, 2005, East West Bank loaned $4,250,000 to Debtor

and co-borrower Hujazi (the “Alexandria Note”) secured by a deed

of trust against the Alexandria Property. The same day, East

West Bank loaned Debtor and Hujazi $2,254,000 (the “Union Note”)

2 Unless otherwise indicated, all chapter and section

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

Rule references are to the Federal Rules of Bankruptcy Procedure,

Rules 1001–9037, and all Civil Rule references are to the Federal

Rules of Civil Procedure 1–86.

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secured by a deed of trust against the Union Property. 

Debtors operated the Properties as apartment complexes. On

November 15, 2010, Debtor and Hujazi defaulted under the terms of

the Alexandria and Union Notes by failing to pay the amounts due. 

In February of 2011, East West Bank assigned the Notes and the

trust deeds securing them to Win Win. By that time, the

Properties had been placed involuntarily into the Rent Escrow

Account Program (“REAP”) by the Los Angeles Housing Department. 

See L.A., CAL. HOUSING CODE § 162.00 et seq. REAP is an

enforcement tool used to ensure that landlords adequately

maintain rental properties and to bring improperly maintained

properties with building and safety code violations into

compliance. While a property is enrolled in REAP, rents from

tenants are not paid to the landlord/owner but, instead, into a

city trust fund.

Win Win filed a complaint in state court for, inter alia,

judicial foreclosure of the trust deeds on the Properties and the

appointment of a receiver, alleging that, in addition to the

default on its loan obligations, Debtor was not taking the

necessary steps to maintain the Properties and that there was a

need to remedy building and safety code violations in order to

remove the Properties from the REAP program. Win Win Alexandria

Union, LLC v. Hujazi, case no. BC 456257 (Los Angeles Super. Ct.

March 1, 2011). After a contested hearing, on March 16, 2011,

the state court granted Win Win’s request to appoint a receiver

and entered an order appointing Kevin Singer (“Receiver”). Win

Win was ordered by the state court to pay all costs of the

receivership as well as the costs of the required repairs and

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corrections to bring the Properties into compliance so they could

be removed from REAP. Win Win alleges that, since March 1, 2011,

it has advanced all fees and costs associated with the

receivership and with the rehabilitation of the Properties. On

July 26, 2012, the Alexandria Property was released from REAP;

the Union Property was released from REAP in March 2013. 

On September 24, 2012, the state court denied Debtor’s

request for a stay of the foreclosure proceedings. The

Alexandria Property, now out of REAP, was scheduled for a deed of

trust sale to occur on September 26, 2012.

B. The Bankruptcy Case

Debtor filed a petition under chapter 11 of the Bankruptcy

Code the day of the trustee’s sale. At that time, approximately

$7,459,000 was owed on the Alexandria Note and $5,595,000 on the

Union Note.

On October 5, 2012, Win Win filed a motion in the bankruptcy

court for relief from the automatic stay to continue with its

foreclosures, arguing that the Alexandria and Union Properties

were over-encumbered; Win Win also sought dismissal of the

bankruptcy case. In support of its motion, Win Win provided an

accounting of amounts owed under the Notes together with the

amounts it had paid to the Receiver and to obtain appraisals of

the Properties. According to a declaration of appraiser

D. Michael Mason, he valued the Alexandria Property at

approximately $5,300,000 and the Union Property at approximately

$3,300,000, demonstrating that Debtor lacked equity in both

Properties. 

Also on October 5, Win Win moved for an order to excuse the

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Receiver’s compliance with § 543(d) to turn over the Properties

to Debtor and to allow the Receiver to retain control of them.

Debtors opposed the motions, arguing that Win Win had inflated

the amounts owed under the Notes, that the alleged values for the

Properties were too low, and that Debtor should be allowed to

recover and rehabilitate the Properties under its reorganization

plan which proposed to remodel and convert them to assisted

living facilities.

The bankruptcy court conducted a hearing on the Win Win

motions on November 27, 2012. After hearing from the parties,

the court ruled that Debtor had “grossly mismanaged” the

Properties by allowing them to be placed in REAP and then taking

no action to cure the violations. The court ordered that the

Receiver need not turn over the Properties to Debtor pending

further order. In connection with the stay relief motion, as to

Debtor’s proposal to convert the Properties into assisted living

facilities, the court found that Debtor’s proposed plan did not

appear feasible in light of its lack of the required capital,

inability to obtain funding, and Debtor’s proposed lack of debt

repayment to Win Win during the refinance/renovation period. The

court continued the stay relief hearing and directed Debtor to

submit certified appraisals for each property if it wished to

contest the appraisals offered by Win Win.

On January 10, 2013, the United States Trustee filed a

motion to appoint a chapter 11 trustee in the bankruptcy case

because Debtor was not meeting its fiduciary obligations, had

incomplete schedules, and had grossly mismanaged the bankruptcy

estate. At a status conference and continued stay relief hearing

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on September 14, 2013, the bankruptcy court granted the

U.S. Trustee’s request and indicated that, upon appointment, the

chapter 11 trustee would have thirty days to investigate and

report to the court whether it should grant relief from stay or

whether the trustee should proceed with a sale of the Properties. 

Acting on the court’s order, the U.S. Trustee appointed Peter S.

Kravitz chapter 11 trustee (“Trustee”) on January 31, 2013.3

§ 1104(d).

C. The Sale of the Properties

Trustee submitted his report to the bankruptcy court on

February 14, 2013. Trustee’s investigation included, among

others, obtaining two brokers opinions on the value of the

Properties, as well as a review of Win Win’s certified

appraisals, a request to Debtor to provide the details for its

plan for capitalizing its proposed conversion of the Properties.

In his report, Trustee noted that Debtor had not provided any

certified appraisals, did not submit a plan for capitalization of

the conversion to assisted living units, and that brokers who

were contacted by Trustee at Debtor’s request would not submit

offers for the Properties for various reasons and, in particular,

because the Properties were not ADA compliant. The report

concluded, based on the Win Win appraisals, the brokers’ opinions

obtained by Trustee, and other information available to him,

“that, as the Properties stand today, there is no equity

available to the estate . . . [and that] Debtor has not responded

3 The order directing appointment of a trustee was not

appealed.

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to the Trustee’s request for a viable plan that will provide a

feasible means to effect conversion for [Debtor’s proposed

uses.]” Trustee noted that, while the bankruptcy court could

grant Win Win stay relief so that it could foreclose, such would

provide no benefit to the estate. Rather than lose the

Properties to foreclosure, Trustee opined that a sale of the

Properties could provide some benefit to all concerned, if

additional concessions could be obtained from Win Win. 

On March 28, 2013, with Win Win’s support, Trustee filed a

“Motion for Entry of an Order: (a) Approving Sale Procedures and

Bid Protections; and (b) Scheduling an Auction and Hearing to

Approve the Sale.” Debtor promptly objected to any sale of the

Properties, contending that Trustee’s sale prices were too low

and his figures regarding the debt on the Properties were

inflated. After a contested hearing on April 11, 2013, the

bankruptcy court, on April 25, 2013, entered an “Order Setting

Sale and Bid Procedures” (the “Procedures Order”). The salient

portions of that order provided that: (A) The Properties would be

sold at auction free and clear of all liens, claims, and

encumbrances; (B) Win Win would submit opening credit bids of

$4,500,000 for the Alexandria Property and $2,700,000 for the

Union Property, and could thereafter offer additional credit bids

up to $8,000,000 for the Alexandria Property, and $7,100,000 for

the Union Property; (C) All auction bidders must submit a

“qualified bid,” which required that a bid be made no later than

one week before the auction, at least $150,000 above the minimum

bids for each of the Properties, be accompanied by a deposit of

$250,000 for each bid, and provide readily verifiable proof of

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funds for the full amount of the bids; (D) The highest offer at

auction will be the final sale price, subject to bankruptcy court

approval; (E) If the successful bidder is a party other than Win

Win, and the successful bid is less than Win Win’s total secured

claim on either Property, Win Win will release its liens on both

Properties; and (F) Win Win would pay Trustee $50,000 for each

Property, which deposit would be nonrefundable unless Win Win was

the successful bidder for the full value of its claim on that

Property. 

On May 2, 2013, Trustee filed a “Motion for Entry of an

Order Authorizing and Approving the Sale of the Properties” (the

“Sale Motion”). The Sale Motion generally incorporated the terms

of the Procedures Order and provided additional information on

the purported administrative claims of Win Win, and specified

that if the motion was approved, regardless of who was the

successful bidder at the auction, Win Win would agree to cap its

administrative claims at $50,000. 

On May 30, 2013, the hearing on the Win Win stay relief

motion and the Sale Motion was held, which was followed by the

auction. Because it intended to approve a sale of the

Properties, the bankruptcy court deemed the Win Win motion for

stay relief or dismissal as moot. The court granted the Sale

Motion: 

I find the [Trustee’s proposed] sale to be in the

estate’s best interests, given the savings of

litigation costs, [and] the waiver of satisfaction of

substantial claims against the estate that would result

from the sale. I further find that the trustee’s

efforts to market the properties was sufficient, given

the length of time the properties have been on the

market, the estate’s resources, and the simple fact

that these properties are property of a bankruptcy

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estate.

Hr’g Tr. 30:12-20.

The bankruptcy judge then left the courtroom, whereupon the

Trustee conducted the auction. There were no offers other than

the Win Win opening offer of $2,700,000 for the Union Property. 

However, Jonathan Barach, president of Vista Investment Group,

LLC (“Vista”), submitted a qualified bid of $6,800,000 for the

Alexandria Property, the only bid in excess of the Win Win offer.

After the auction concluded, the bankruptcy judge returned

to the courtroom and, after hearing from the parties, directed

Trustee to prepare an order approving the sales, which order

should recite its conclusions that the successful bidders were

good faith purchasers for purposes of § 363(m), that the sale was

free and clear of all liens, claims, and encumbrances, and that

the usual fourteen-day stay of the order under Rule 6004(h) would

be waived.

The bankruptcy court entered the order approving the sale on

June 10, 2013 (the “Sale Order”). The Sale Order provided, in

relevant part:

3. The Trustee is authorized to sell and transfer to

Win Win . . . the Union Property[.]

4. [Vista] is confirmed as the successful bidder for

the Alexandria Property. The Trustee is

authorized to sell and transfer to Vista or its

designee the Alexandria Property [for]

$6,800,000[.]

5. Win Win is confirmed as the backup purchaser of

the Alexandria Property in the event that the sale

of the Alexandria Property to Vista fails to

close. In such event, Win Win or its designee is

confirmed as the purchaser, and the Trustee is

authorized to sell and transfer to Win Win the

Alexandria Property [for] $4,500,000.

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7. Win Win and Vista are deemed to be good faith

purchasers as that term is used in and for the

purposes of 11 U.S.C. § 363(m).

9. Pursuant to 11 U.S.C. § 363(f), effective upon

closing, the sale of each and both of the

Properties will vest in the respective purchaser

all right, title and interest of the Debtor and

the bankruptcy estate in the Properties free and

clear of all liens, claims, encumbrances or

interests[.]

12. This order shall be effective upon its entry, and

any stay provided by application of Bankruptcy

Rule 6004(h) is waived.

13. Win Win may not assert an administrative claim in

the Case for more than $50,000.

Debtor filed a timely notice of appeal of the Sale Order on

June 21, 2013. Debtor did not seek a stay pending appeal from

either the bankruptcy court or this Panel.

D. Subsequent Events 

The parties strenuously dispute the facts and events 

following the entry, and Debtor’s appeal, of the Sale Order. 

Because these contentions appear in their appellate pleadings, we

acknowledge them here as assertions, but not for their truth.

The parties agree that Trustee was apparently unable to

complete the sale of the Alexandria Property to Vista, ostensibly

because a tax lien and other issues rendered Trustee unable to

obtain insurable title for Vista. As a result, Trustee did not

close the sale with Vista and, instead, completed the sale of the

Alexandria Property to Win Win as the backup purchaser under the

Sale Order. 

At some time before July 30, 2013, Win Win apparently sold

the Alexandria Property to Alex Court Apartments, LLC (“Alex

Court”), which is alleged to be a subsidiary and “designee” of

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Vista, for $6,800,000, the same price as under the Sale Order,

and Win Win agreed to pay certain costs and assume the risks

related to this appeal. On July 30, 2013, the Sale Order and

grant deeds transferring ownership of both Properties to Win Win

free and clear of all liens, claims, interests and encumbrances,

were recorded. The same day, a grant deed transferring the

Alexandria Property from Win Win to Alex Court was recorded.

On August 12, 2013, Trustee filed a motion with this Panel

to dismiss this appeal as moot. Debtor opposed the motion. A

motions panel ruled that “All relief requested in [Win Win’s]

motion to dismiss is hereby ORDERED DENIED. The appeal is not

moot at this time.”

II. JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C.

§§ 1334 and 157(b)(2)(N). The Panel has jurisdiction under

28 U.S.C. § 158. 

III. ISSUES

Whether this appeal is equitably moot.

Whether the bankruptcy court clearly erred in finding the

sales were to good faith purchasers for purposes of § 363(m).

Whether the bankruptcy court abused its discretion in

approving the sale of the Properties under § 363(b).4

4 By listing this issue, we acknowledge that Debtor raised

it in this appeal. However, because the Sale Order included a

§ 363(m) finding as to the purchasers, as an appellate court we 

are precluded from reviewing any issues other than the "good

faith" of the purchasers. Ferrari N. Am., Inc. v. Sims

(In re R.B.B., Inc.), 211 F.3d 475, 478-80 (9th Cir. 2000); see

(continued...)

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IV. STANDARDS OF REVIEW

Mootness is a question of law reviewed de novo. Nelson v.

George Wong Pension Trust (In re Nelson), 391 B.R. 437, 442 (9th

Cir. BAP 2008).

A bankruptcy court’s determination of whether a purchaser of

property acted in good faith under § 363(m) is a finding of fact

reviewed for clear error. Thomas v. Namba (In re Thomas),

287 B.R. 782, 785 (9th Cir. BAP 2002). A finding of fact is

clearly erroneous if it is illogical, implausible, or without

support from evidence in the record. United States v. Hinkson,

585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).

A bankruptcy court’s decision to approve a sale of estate

property under § 363 is reviewed for abuse of discretion. Moldo

v. Clark (In re Clark), 266 B.R. 163, 168 (9th Cir. BAP 2001). 

In determining whether the bankruptcy court abused its discretion

we first determine de novo whether the trial court identified the

correct legal rule to apply to the relief requested and, if so,

we then determine whether the bankruptcy court’s application of

that standard was “(1) illogical, (2) implausible, or (3) without

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

record.” United States v. Loew, 593 F.3d 1136, 1139 (9th Cir.

2010).

4(...continued)

also In re River-W. Plaza Chicago, LLC, 664 F.3d 668, 672 (7th

Cir. 2011) ("Our appellate jurisdiction over an unstayed sale

order issued by a bankruptcy court is statutorily limited to the

narrow issue of whether the property was sold to a good faith

purchaser.").

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V. DISCUSSION

A. This appeal is not equitably moot.

1. 

Win Win argues that this appeal is equitably moot because

Debtor did not seek a stay pending appeal and Win Win would be

financially harmed by a reversal of the Sale Order. We disagree. 

Equitable mootness prevents an appellate court from reaching

the merits when appellants have "‘failed and neglected diligently

to pursue their available remedies to obtain a stay'" and changes

in circumstances "‘render it inequitable to consider the merits

of the appeal.'" Darby v. Zimmerman (In re Popp), 323 B.R. 260,

271 (9th Cir. BAP 2005) (quoting Focus Media, Inc. v. Nat'l

Broad. Co., Inc. (In re Focus Media, Inc.), 378 F.3d 916, 923

(9th Cir. 2004)). In other words, equitable principles may

require dismissal of the appeal when the appellant neglects to

obtain a stay pending appeal and the rights of third parties

intervene. Spirtos v. Moreno (In re Spirtos), 992 F.2d 1004,

1006 (9th Cir. 1993); In re Popp, 323 B.R. at 271. 

The party asserting equitable mootness must demonstrate that

the case involves transactions "so complex or difficult to

unwind" that equitable mootness applies. Lowenschuss v. Selnick

(In re Lowenschuss), 170 F.3d 923, 933 (9th Cir. 1999). The

Ninth Circuit recently provided additional guidelines for our

inquiry into equitable mootness:

We endorse a test similar to those framed by the

circuits that have expressed a standard: We will look

first at whether a stay was sought, for absent that a

party has not fully pursued its rights. If a stay was

sought and not gained, we then will look to whether

substantial consummation of the plan has occurred. 

Next, we will look to the effect a remedy may have on

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third parties not before the court. Finally, we will

look at whether the bankruptcy court can fashion

effective and equitable relief without completely

knocking the props out from under the plan and thereby

creating an uncontrollable situation for the bankruptcy

court.

Motor Vehicle Cas. Co. v. Thorpe Insulation Ins. Co. (In re

Thorpe Insulation Ins. Co.), 677 F.3d 869, 881 (9th Cir. 2012).

Win Win argues that this appeal is equitably moot because:

(1) Debtor failed to obtain, or even request, a stay of the Sale

Order pending appeal; (2) in reliance on the Sale Order, Win Win

subsequently sold the Alexandria Property to a Vista subsidiary,

a third party; and (3) reversal of the Sale Order at this time

would be detrimental to Win Win and Vista.

Win Win is correct that Debtor failed to request or obtain a

stay pending appeal. The Thorpe Insulation court expresses

considerable concern about cases in which an appellant fails to

"pursue with diligence all available remedies to obtain a stay of

execution of the objectionable order." In re Thorpe Insulation

Ins. Co., 677 F.3d at 881. More recent cases from the Ninth

Circuit have explained the equitable mootness rules discussed in

Thorpe Insulation, and in particular the consequences of an

appellant’s failure to seek a stay pending appeal. Rev Op Grp.

v. ML Manager (In re Mortgages Ltd.), 771 F.3d 1211 (9th Cir.

2014) (all cites below are to this opinion as "In re Mortgages,

Ltd.” at <page>); Rev Op Grp. v. ML Manager (In re Mortgages

Ltd.), 771 F.3d 623 (9th Cir. 2014); Rev Op Grp. v. ML Manager

(In re Mortgages Ltd.), ___ Fed. Appx. ___, 2014 WL 5840462 (9th

Cir. 2014). 

Reviewing the history of Ninth Circuit and BAP decisions

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discussing an appellant's failure to seek a stay and equitable

mootness, the In re Mortgages, Ltd. court cited to Trone v.

Roberts Farms, Inc. (In re Roberts Farms, Inc.), 652 F.2d 793

(9th Cir. 1981): "It is obligatory upon appellant . . . to pursue

with diligence all available remedies to obtain a stay of

execution of the objectionable order . . . if failure to do so

creates a situation rendering it inequitable to reverse the

orders appealed from." Id. at 798 (quoted in In re Mortgages,

Ltd., at 1215). Commenting on Roberts Farms and Thorpe

Insulation, the In re Mortgages, Ltd. court observed: "While we

recognized in Thorpe that an appeal should not be automatically

dismissed for failure to obtain a stay, we reiterated our warning

from Roberts Farms that an appellant must seek a stay. 

Otherwise, we stated the appellant has by definition ‘not fully

pursued its rights,' [quoting Thorpe Insulation, 677 F.3d at 881]

and thus the appeal is subject to dismissal." In re Mortgages,

Ltd., at 1216. Based upon the rules articulated in Roberts Farms

and repeated in Thorpe Insulation, the In re Mortgages, Ltd.

court reasoned that failure to seek a stay pending appeal, at

least without an adequate excuse, requires dismissal of an

appeal. "This is a clear bright-line rule that all litigants can

understand." In re Mortgages, Ltd., at 1217.

Here, not only did Debtor not seek a stay pending appeal,

but also rather than offer an acceptable excuse for not doing so,

it made the troubling assumption that it was under no obligation

to do so because the bankruptcy court allegedly erred in its good

faith finding in the Sale Order and, thus, § 363(m) would not

apply. Debtor seemingly did not contemplate that its failure to

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seek a stay might raise equitable mootness problems.

But while Debtor did not seek a stay pending appeal, and

provided no good excuse for its failure to do so, under the case

law our inquiry does not end there. The rule discussed in

In re Mortgages, Ltd. is subject to the same condition explained

in Roberts Farms, Inc., Lowenschuss, and Thorpe Insulation, that

there must also be some subsequent event that would render

consideration of the issues on appeal inequitable, and thereby

trigger an equitable mootness analysis. In re Robert Farms,

Inc., 652 F.2d at 798 ("Appellants have failed and neglected

diligently to pursue their available remedies to obtain a stay of

the objectionable orders of the Bankruptcy Court and have

permitted such a comprehensive change of circumstances to occur

as to render it inequitable for this court to consider the merits

of the appeal."); Lowenschuss v. Selnick (In re Lowenschuss),

170 F.3d 923, 933 (9th Cir. 1989) ("a claim is not equitably moot

because th[e] case does not present transactions that are so

complex or difficult to unwind that the doctrine of equitable

mootness would apply"); In re Thorpe Insulation Co., Inc.,

677 F.3d at 883 ("most importantly, we look to whether the

bankruptcy court on remand may be able to devise an equitable

remedy."). Indeed, the In re Mortgages, Ltd. court observed that

"[a] party can move to dismiss an appeal as equitably moot if

‘great changes in the status quo occurred after the district

court rendered the orders appealed from[.]'" In re Mortgages,

Ltd., at 1214 (quoting Algeran, Inc. v. Advance Ross Corp.,

759 F.2d 1421, 1423 (9th Cir.1985)).

In sum, while in this appeal Debtor did not seek a stay of

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the Sale Order pending appeal and has provided no satisfactory

explanation for the failure to do so, to complete our equitable

mootness analysis we must consider whether Debtor's failure to

seek a stay "creates a situation rendering it inequitable to

reverse the orders appealed from." In re Mortgages, Ltd., at

1216, (quoting In re Roberts Farms, Inc., 652 F.2d. at 798). We

conclude that equity does not require that this appeal be

dismissed. 

Here, relying upon the Sale Order, Trustee sold the

Alexandria Property to Win Win, and Win Win almost immediately

resold it to Vista's subsidiary. There is case law to support

the argument that a sale of property to a third party may moot an

appeal because it precludes effective relief. Baker & Drake v.

Pub. Serv. Comm'n of Nev. (In re Baker & Drake), 35 F.3d 1348,

1351 (9th Cir. 1994). And in its analysis of the equitable

mootness doctrine in bankruptcy cases, Thorpe Insulation

expresses concern for third parties whose rights may be impacted

on appeal but who are not "before the court." 677 F.3d at 881. 

But in this case, it is not at all clear that Vista (or its

designee, Alex Court) is the sort of "third party" entitled to

benefit from the equitable mootness doctrine. Vista was approved

as a bidder in the Sale Order and its chief executive appeared

before the bankruptcy court and submitted the bid. Vista has

also participated in this appeal by filing a declaration in

support of Win Win's appellate brief. In short, in our view,

Win Win, Vista, and its subsidiary are "before the court" both in

the bankruptcy court and in this appeal.

Another critical question is whether reversal of the Sale

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Order involves transactions "so complex or difficult to unwind"

that equitable mootness applies. In re Lowenschuss, 170 F.3d at

933. Surprisingly, we think this question is answered by Win Win

in its appellate brief. According to Win Win, it entered into an

agreement with Vista which specifies the consequences and

respective rights and responsibilities of those parties if the

Sale Order were to be unwound by this Panel:

Win Win and [Vista] agreed that if the Sale Order is

reversed: Win Win must return [] the entire $6,800,000

plus interest at 10% per annum; the portion of the

purchase not used to pay off the existing loan Win Win

secured in connection with the purchase of the

Properties is [to] be held in escrow pending resolution

of the appeal; [Vista] shall not be reimbursed for any

improvements or liable for completion of any

improvements at the Alexandria Property[;] however if

required by the Trustee, Win Win is responsible to

return the Alexandria Property to its pre-possession

condition; and [Vista] is to retain all rental income

received during its ownership.

Win Win Br. at 12-13.

In light of the parties' contract, none of the transactions

involved in this appeal are "so complex or difficult to unwind"

that equitable mootness would prevent our reversal of the Sale

Order. Indeed, Win Win and Vista bargained for these

transactions in anticipation of a possible reversal of the Sale

Order in this Panel.

Although Debtor's decision to forego any effort to obtain a

stay pending appeal was a risky one, we conclude that, even now,

the Sale Order could be effectively unwound without inequity. 

This appeal is not equitably moot.

2.

Additionally, Debtor argues that the mootness of this appeal

has already been “fully adjudicated” because the motions panel

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denied Trustee’s motion to dismiss. Debtor’s Reply Br. at 12. 

Because of this, Debtor has apparently declined to address Win

Win’s argument that our review of the Sale Order is prohibited

based on the bankruptcy court’s § 363(m) finding and the fact

that Debtor did not obtain a stay of the sales pending appeal. 

Debtor was mistaken to have forfeited its opportunity to

address the merits of the § 363(m) issue. In this circuit, a

merits panel is always free to review the decisions made in an

appeal by a motions panel. See United States v. Houser, 804 F.2d

565, 567 (9th Cir. 1986); In re Crystal Sands Props., 84 B.R. 665

(9th Cir. BAP 1988). Moreover, contrary to Debtor’s position,

the motions panel did not “fully adjudicate” the question of

mootness; instead, the motions panel denied the motion to dismiss

because the “appeal is not moot at this time." In employing this

language in its order, the motions panel implicitly acknowledged

that the mootness issue may be revisited by this Panel. We have

done so above.

B. The bankruptcy court did not clearly err in determining

that Win Win was a good faith purchaser in the Sale

Order.

1.

We first address a preliminary matter. Debtor requests in

its reply brief that the Panel strike four volumes of Trustee’s

excerpts of record because Trustee failed to designate them

within the fourteen day period required by Rule 8006.5 Debtor

5 The Federal Rules of Bankruptcy Procedure were modified

effective December 1, 2014. This discussion refers to the Rules

which were in effect at the time this appeal was filed. Rule

(continued...)

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Reply Br. at 1. But we are also mindful of the provision in Rule

8001(a) which instructs that:

An appellant’s failure to take any step other than 

timely filing a notice of appeal does not affect the

validity of the appeal, but is ground for only such

action as the district court or bankruptcy appellate

panel deems appropriate[.] 

Debtor has given us no reason, other than the Rule 8006 time

requirement for designating the record on appeal, for rejecting

the “supplemental” documents offered by Trustee in the four

volumes. With a few minor exceptions that do not affect our

analysis, these are all documents appearing in the docket of the

bankruptcy court, and known to the bankruptcy court at the time

of entry of the Sale Order. We therefore exercise our discretion

and have considered Trustee’s supplementary excerpts.6

2.

There is also a misconception in Debtor’s arguments in this

5(...continued)

8006 was modified and renumbered as Rule 8009 and Rule 8001 was

modified and renumbered as Rule 8003 as of December 1, 2014. The

salient provisions of each rule remain unchanged.

6 Debtor also requests that we strike two declarations filed

by the President of Vista and the Managing Member of Win Win, and

attached to Win Win’s appellate brief, relating to the actions of

those purchasers after entry of the Sale Order. To the extent

that these declarations attempt to explain disputed facts, such

as the reason why Trustee did not complete the sale of the

Alexandria Property to Vista, the Panel will not try to resolve

those disputes. However, to the extent that the declarations

discuss undisputed facts, such as the existence and terms of the

agreement between Vista and Win Win to take certain actions in

the event this Panel overturns the Sale Order, we considered

those facts in our discussion of equitable mootness in the

Jurisdiction section above.

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appeal which we must dispel. Several times in its appellate

briefs Debtor argues that “[t]he burden of proof is on the

proponent of good faith, i.e., the Appellee [Trustee and Win Win]

herein.” For support, Debtor cites to this Panel’s opinion in

T.C. Investors v. Joseph (In re M Capital Corp.), 290 B.R. 743,

747 (9th Cir. BAP 2003) (“the proponent of section 363(m) good

faith has the burden of proof.”). However, the Ninth Circuit

explicitly rejected the BAP’s In re M Capital Corp. holding

concerning the burden of proof on good faith under § 363(m)

because, according to the court, it was inconsistent with Ninth

Circuit precedent.7 Weinstein, Eisen & Weiss, LLP v. Gill

(In re Cooper Commons, LLP), 424 F.3d 963, 970 (9th Cir. 2005). 

In Cooper Commons, the court noted that, as explained in

In re Adams Apple, 829 F.2d 1484, 1489 (9th Cir. 1987), in

connection with a sale to a creditor under § 363(m),8 “we presume

the [creditor’s] good faith and then inquire to see whether the

7 In Fitzgerald v. Nunn Worx SR, Inc. (In re Fitzgerald),

428 B.R. 872, 880-81 (9th Cir. BAP 2010), the BAP relied on

In re M Capital Corp. in ruling against the proponent of good

faith. In that case, however, the ruling was that the proponent

had not prayed for a good faith finding and the court made no

good faith determination at all, and thus it was not a question

of the shifting burden of proof.

8 In Cooper Commons, the court acknowledged that, in

In re Adams Apple, the court examined good faith under § 364(e),

while the M Capital Corp. BAP panel was reviewing a buyer’s good

faith under §363(m). In re Cooper Commons, LLP, 424 F.3d at 970. 

The Cooper Commons court noted that there was no difference in

the determination of good faith under those statutes. Id. at 970

n.2.

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presumption can be overcome.” Id. at 969-70.9

Under the facts of this case, however, we do not find it

necessary to reconcile In re M Capital with In re Adams Apple. 

Under In re Adams Apple, Win Win is presumptively a good faith

purchaser; as discussed below, consistent with In re M Capital,

Trustee has presented good and sufficient evidence that Win Win

was a good faith purchaser at the time of the Sale Order. Thus,

a burden of proof analysis in this case is unnecessary.

3.

Debtor argues that the bankruptcy court failed to make

adequate findings of fact regarding the good faith of purchaser

Win Win in connection with entry of the Sale Order. We disagree

and conclude the court’s findings satisfy the requirements of the

statute and case law. 

Section 363(m) provides that: 

The reversal or modification on appeal of an

authorization under subsection (b) or (c) of this

section of a sale or lease of property does not affect

the validity of a sale or lease under such

authorization to an entity that purchased or leased

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.

Under § 363(m), the first requirement of a "good faith"

purchaser is that there be an identifiable purchaser. 

In re R.B.B., Inc., 211 F.3d at 478-80. That element is

satisfied in this case; it is not disputed that Win Win was

clearly identified as a potential purchaser in connection with

9 The BAP decision in In re M Capital Corp. did not

acknowledge this presumption.

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both sales.

A second requirement for good faith under § 363(m) is that

all parties have adequate notice of the sale. United States v.

Moberg Trucking Co. (In re Moberg Trucking Co.), 112 B.R. 362,

366 (9th Cir. BAP 1990). Here, all parties in interest received

ample notice of the hearings held to approve the Bid Procedures

and the Sale Motions and of the sale itself.

The Bankruptcy Code does not provide a definition of a good

faith purchaser under § 363(m). Beyond the requirements

identified above, the Ninth Circuit has traditionally held that

“a good faith purchaser is one who buys ‘in good faith’ and ‘for

value.’” In re Ewell, 958 F.2d. 276, 281 (9th Cir. 1992) (citing

In re Abbotts Dairies of Pa., Inc., 788 F.2d 143, 147 (3d Cir.

1986)). Good faith under § 363(m), in turn, is defined

negatively, that is, “a lack of good faith is shown by ‘fraud,

collusion between the purchaser and other bidders or the trustee,

or an attempt to take grossly unfair advantage of other

bidders.’” Community Thrift & Loan v. Suchy (In re Suchy),

786 F.2d 900, 902 (9th Cir. 1985).

Therefore, in addition to requirements that there was

adequate notice of the sale and bidding procedures and that the

winning bidder was identifiable, the criteria for a good faith

purchaser under § 363(m) are that the winning bid provided value

to the estate and the winning bidder did not engage in fraud,

collusion, or attempt to take unfair advantage of other bidders.

In this case, the bankruptcy court made a finding that Win

Win’s bid, which in addition to its secured credit bid offered to

pay cash to the estate, along with its willingness to limit the

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amount of any potential administrative expense claims,

represented considerable value to the creditors of the bankruptcy

estate: 

I find the sale to be in the estate’s best interests,

given the savings of litigation costs [and] the waiver

of satisfaction of substantial claims against the

estate that would result from the sale.

Hr’g Tr. 30:11-15, May 30, 2013.

The bankruptcy court also noted that the “only evidence of

the [Alexandria Property’s] value before the court is an

appraisal prepared by Win Win which reflects the value of the

property at $5.3 million.” Hr’g Tr. 31:10-12. Similarly, the

only formal appraisal of the Union Property was also the Win Win

appraisal of $3,300,000. Of course, the bankruptcy court had

indicated that Debtor could challenge the accuracy of the Win Win

appraisals through submission of its own appraisals. Hr’g

Tr. 33:12-13, November 27, 2012. Debtor informed the bankruptcy

court that it would need forty-five days to prepare the

appraisals. Hr’g Tr. 33:20-23. While it was afforded time to do

so, Debtor never submitted any appraisal for either property, nor

did it ever provide an explanation for its failure to comply with

the bankruptcy court’s instructions if it intended to dispute the

value of the Properties.

Appraisals can assist the bankruptcy court in determining

the good faith of a proposed purchaser. While the Ninth Circuit

has not done so expressly, four other circuits have held that a

purchaser who pays at least 75 percent of the appraised value of

a property has purchased for value. Kabro Assocs., LLC v. Colony

Hill Associates (In re Colony Hill Associates), 111 F.3d 269, 276

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(2d Cir. 1997) (“Courts have held that a purchaser who pays ‘75%

of the appraised value of the assets’ has tendered value, as that

term is used for purposes of § 363(m).”); In re Abbotts Dairies

of Pennsylvania, Inc., 788 F.2d at 149; In re Bel Air Assocs.,

Ltd., 706 F.2d 301, 305 n.12 (10th Cir. 1983); In re Rock Indus.

Mach. Corp., 572 F.2d 1195, 1197 n.1 (7th Cir. 1978). Here, the

minimum credit bids to be made by Win Win at the sales,

$4,500,000 for the Alexandria Property, and $2,700,000 for the

Union Property, were more than 80% of the appraised values of the

Properties. In other words, on this record, the bankruptcy court

had an ample basis to conclude that Win Win’s minimum credit

bids, together with its other concessions, would yield sales of

benefit and value to the estate.

Additionally, the bankruptcy court had evidence in the

record that the tenants’ association for the Properties was

preparing litigation against the Receiver, Win Win, and Debtor as

a result of the various code violations that resulted in the REAP

placement. Further, the bankruptcy court had voluminous records

from Trustee and Receiver relating to the significant

postpetition expenses incurred and paid by Win Win for the

maintenance and rehabilitation of the Properties. Debtor

objected in the bankruptcy case, and in this appeal, that these

costs were inflated, and that the bankruptcy court had not

formally decided that Win Win’s expenditures would be allowed as

administrative claims. Of course, allowance of any

administrative claims would require bankruptcy court review,

giving Debtor the additional opportunity to object. However, 

Debtor never submitted any argument or evidence that any specific

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items in the billings submitted by Win Win were excessive. 

Moreover, it cannot reasonably be disputed that substantial

expenses were continuing to be incurred as a result of the

estate’s ownership of the Properties. Avoiding accruing expenses

was therefore an additional benefit to a prompt sale of the

Properties. 

Finally, it is important to note that an auction occurred. 

No parties other than Vista submitted bids in excess of the Win

Win bid on the Alexandria Property and there were no bids besides

Win Win’s minimum bid for the Union Property. The absence of any

other interested bidders was also evidence that Win Win’s offers

were made in good faith.

4.

In contesting the bankruptcy court’s good faith finding,

Debtor makes two arguments. The first is that Trustee

“unilaterally decided” not to complete the sale as authorized by

the Sale Order to Vista, and instead “allowed his preferred

purchaser” (i.e., Win Win) to acquire the Alexandria Property “by

default.” Debtor’s Op. Br. at 12. In Debtor’s opinion, the

later sale of the Alexandria Property by Win Win to a Vista

subsidiary within weeks of entry of the Sale Order on the same

terms Vista originally bid renders the entire sale process

inherently suspicious. We examine the import of this argument in

the next section. 

Debtor’s second argument is that, at the time of the entry

of the Sale Order, “as a further indication of fraud, collusion

and unfair advantage . . . the Trustee and/or his counsel

thwarted attempts by prospective third party purchasers from

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making any bids on the property or engaging in the bankruptcy

process.” Debtor’s Op. Br. at 14. Debtor’s allegations were

discussed in the bankruptcy court at length at the hearings on

the Bid Motion and Sale Motion.

In opposition to this suggestion, Trustee represented that

he, or his office staff, had responded to every request for

information and to view the Properties made to him, including

ten-to-fifteen referrals from Debtor. He also noted that access

to the Properties was controlled by the Receiver as authorized by

the bankruptcy court and Trustee should not be blamed for the

difficulties some parties may have encountered accessing the

Properties.

Before the auction took place, the bankruptcy court

admonished Debtor's counsel for engaging in "gamesmanship,"

specifically, by providing a bid from Gangi Development of

$9,800,000 for the Alexandria Property the night before the

auction, and objecting at the last minute to Trustee's marketing

efforts on the Properties. Nevertheless, the court recessed to

allow the parties and the court to examine the late-filed bid. 

The court concluded the bid was inappropriate because it did not

conform to the Procedures Order: the offered deposit of $100,000

was less than the required deposit of $250,000; the bid was

untimely filed on May 30, 2013, whereas the Procedures Order

required submission no later than May 23, 2013; and the

submission included no proof that the bidder had readily

available funds to complete a sale. 

Fairly viewed, Debtor’s argument on appeal that Trustee

allegedly discouraged bids is a continuation of its position in

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the bankruptcy court that Trustee failed to properly market the

Properties. Despite the various allegations of Debtor, the court

found that Trustee had properly marketed the Properties:

I further find that the trustee’s efforts to market the

Union Street and Alexandria Avenue Properties was

sufficient, given the length of time the properties

have been on the market, the estate’s resources, and

the simple fact that these properties are property of a

bankruptcy debtor.

Hr’g Tr. 30:16-20. Here, the bankruptcy court had been presented

with two views of the evidence, one that Trustee had failed to

market the Properties by discouraging bidding, and one that

Trustee had not discouraged bidding but actively responded to

inquiries. Where there are two views of the evidence, the

bankruptcy court’s choice between them cannot be clearly

erroneous. Lehtinen v. Lehtinen (In re Lehtinen), 332 B.R. 404,

411 (9th Cir. BAP 2005).

We are also persuaded by Trustee’s arguments that, at the

time of entry of the Sale Order, the bankruptcy court had no

reason to believe that Trustee and Win Win were engaged in fraud,

collusion, or seeking to take unfair advantage of the sale

process. Contrary to its current position, at the hearing on the

bidding procedures, counsel for Debtor assured the court that it

was not asserting that Trustee had colluded with Win Win: “The

Debtor is not arguing there’s been any collusion between the

trustee [and Win Win].” Hr’g Tr. 18:6-8, April 11, 2013. As to

Debtor’s various allegations that Trustee and Win Win had

significant contacts before the Sale Order, this is not evidence

of any unfair advantage. Trustee was charged by the bankruptcy

court with responsibility for evaluating Win Win’s secured claim,

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and to do so, Trustee would presumably have contacts with Win

Win. 

5.

The bankruptcy court relied upon sufficient, competent

evidence in finding that the proposed sales to Win Win were for

value and benefitted the bankruptcy estate. At the time the Sale

Order was entered, the bankruptcy court had been offered no

credible evidence to show that Trustee or Win Win were engaged in

fraud, collusion, or unfair advantage. Therefore, we conclude

that the bankruptcy court did not clearly err in finding that, at

the time of entry of the Sale Order, Win Win was a good faith

purchaser. 

C. Because the Panel may not engage in fact-finding

concerning events that occurred after entry of the Sale

Order, this matter must be remanded to the bankruptcy

court to consider whether any basis exists to

reconsider its good faith finding in the Sale Order.

While we find no error in the bankruptcy court’s fact

finding that, based upon the record before it at the time of the

Sale Order, Win Win was a good faith purchaser entitled to the

protections of § 363(m), Debtor has directed the Panel’s

attention to certain facts occurring after entry of the Sale

Order that could plausibly support an inference of collusion

between Trustee and Win Win. In light of these developments,

under our case law, we must remand this matter to the bankruptcy

court for further proceedings.

As explained above, a determination of good faith in a sale

order under § 363(m) is a finding of fact to be reviewed on

appeal for clear error. In re Thomas, 287 B.R. at 785. Based

upon the evidence and record, a bankruptcy court may, but is not

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required to, make a § 363(m) finding in connection with the

initial sale process. Id. (explaining that the “choice of

whether to make a finding of ‘good faith’ as part of the initial

sale process belongs, in this circuit, to the bankruptcy

court.”). However, all the facts necessary to a good faith

determination may not be available to the bankruptcy court at the

time it initially approves a sale:

The difficulty with the [§ 363(m)]factual determination

is that evidence genuinely probative of "good faith" is

not commonly introduced, or even reasonably available,

at the time a bankruptcy court approves a sale. To the

contrary, the fact-intensive evidence regarding the

buyer and relations with parties in interest that may

indicate fraud, collusion, or unfair advantage — i.e.

evidence suggesting lack of "good faith" — tends to

emerge after the sale.

Id.

Central to Debtor’s position on appeal is its allegation

that Trustee acted inappropriately in connection with the sales

and, thus, the bankruptcy court clearly erred in finding that Win

Win was a good faith purchaser. While we reject that notion

based upon the bankruptcy court’s findings made at the time of

the entry of the Sale Order, Debtor argues on appeal that the

actions of Trustee after entry of the Sale Order support its

contention. In particular, Debtor points to the events resulting

in Trustee’s apparent inability to close the sale of the

Alexandria Property to Vista, Trustee’s decision to sell the

Alexandria Property via a credit bid to Win Win as the “back up

bidder” under the Sale Order, and Win Win’s subsequent sale of

the Alexandria Property to a Vista subsidiary for the same price

as it originally offered Trustee. 

Of course, Trustee and Win Win dispute the existence of any

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irregularities after entry of the Sale Order. However, the facts

identified by Debtor justify additional inquiry, something the 

Panel may not undertake because “an appellate court is illequipped to take evidence and make findings on such a factintensive question as ‘good faith’ . . . .” Id. at 786. Whether

facts exist which could, conceivably, alter the bankruptcy

court’s good faith finding is a question that, as the factfinder, only the bankruptcy court, and not the Panel, can decide:

If an issue regarding “good faith” arises after the

§ 363(b) sale order is entered, regardless of whether

the court initially made a “good faith” finding, the

appropriate procedure for addressing the issue is

provided by Federal Rules of Civil Procedure 59 and 60,

which apply in bankruptcy by virtue of Federal Rules of

Bankruptcy Procedure 9023 and 9024. . . . In deciding

Rule 59 and 60 motions, the bankruptcy court will make

findings of fact regarding “good faith” (either for the

first time or supplementing prior findings), which

findings may then be reviewed on appeal for clear

error.

Id. at 785-86;10 see also First State Operating Co. v. Holbrook

(In re Lotspeich), 328 B.R. 209, 218 (10th Cir. BAP 2005)

(acknowledging that, in the absence of the fact findings

10 After the limited remand in In re Thomas, the bankruptcy

court entered detailed findings to support its conclusion that

the buyer in that case was indeed a good faith purchaser of the

property. Thomas again appealed the bankruptcy court's order,

and the Panel consolidated that appeal with the original appeal. 

In an unpublished decision, the Panel determined that the

bankruptcy court's finding of good faith was not clearly

erroneous and affirmed the bankruptcy court’s good faith finding

and the order approving the sale. Thomas v. Namba

(In re Thomas), BAP No. CC-02-1307/1237 (Memorandum, January 9,

2004). Thomas appealed the Panel's decisions to the Ninth

Circuit, which affirmed. Thomas v. Namba (In re Thomas),

154 Fed. Appx. 673 (9th Cir. 2005).

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necessary to show a purchaser is acting in good faith, a remand

to the bankruptcy court is required).

The essence of Debtor’s argument here is that two events

occurring after entry of the Sale Order evidence its contention

that there was some sort of fraud, collusion, or seeking unfair

advantage between Trustee and Win Win, and possibly between Win

Win and Vista, in completing the sales. First, as Trustee

concedes, Trustee did not complete the sale of the Alexandria

Property to the winning bidder, Vista, as ordered by the

bankruptcy court and, instead, sold the Property to Win Win as

the backup bidder. The record is disputed as to why the sale to

Vista by Trustee was not completed. Trustee and Win Win suggest

in their appellate briefs that an unresolved tax lien and

inability to obtain title insurance prevented the sale from

closing. Trustee, however, provides little information about

what tax lien was involved, why a title company would not insure

clear title, and why this predicament prevented the sale to

Vista, but allowed a sale to Win Win and later the Win Win-toVista transfer. Debtor disputes that these circumstances

justified Trustee’s decision to sell to Win Win instead of Vista.

The other significant post-Sale Order event targeted by

Debtor concerns Win Win’s almost simultaneous sale of the

Alexandria Property to Vista for the same price that Vista

originally bid in the bankruptcy court. Win Win alleges in its

appellate brief that it was under water in its investment in this

property in excess of $2,000,000, and that it did not want to

hold on to the asset. Debtor, however, argues that this

transaction suggests there was fraud, collusion, and unfair

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dealing among Trustee, Win Win, and Vista, insofar as there is no

adequate explanation why, within weeks of the sale, Vista would

decline to pay Trustee and the estate $6,800,000 absent title

insurance, but was nonetheless willing to pay Win Win the same

amount. 

While we are skeptical of Debtor’s allegations of

impropriety in concluding the sales, we cannot properly resolve

these issues. We are bound by In re Thomas which instructs that,

under these circumstances, the bankruptcy court, not the Panel,

should decide whether to reexamine its original § 363(m) good

faith determination. Since this appeal divested the bankruptcy

court of jurisdiction to alter the status quo of the appeal, the

Panel concludes its should grant a “limited remand to the trial

court for the purpose of determining the factual question of

‘good faith.’” In re Thomas, 287 B.R. at 786 (citing Chas. A.

Wright et al., FEDERAL PRACTICE & PROCEDURE § 3937.1 at n.29 (2d ed.

1996)). 

VI. CONCLUSION

While this Panel concludes that the bankruptcy court did not

err in ruling that Win Win was a § 363(m) good faith purchaser

based upon the record before it at the time it entered the Sale

Order, we REMAND this matter to the bankruptcy court with

instructions that it conduct such further proceedings as it deems

appropriate to decide whether it should reconsider its § 363(m)

good faith finding concerning the purchasers based upon any

events and facts occurring after entry of the Sale Order.

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