*Pursuant to Local Rule 47.5, the court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in Local Rule 47.5.4.

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IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 96-30555

_____________________

In The Matter of: JOE CONTE TOYOTA INC

Debtor

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

JOSEPH P CONTE, JR

Appellant

v.

JOE CONTE TOYOTA INC

Appellee.

_________________________________________________________________

Appeal from the United States District Court

for the Eastern District of Louisiana

(95-CV-4212-J)

_________________________________________________________________

December 13, 1996

Before KING, DAVIS, and BENAVIDES, Circuit Judges.

PER CURIAM:*

Joseph Conte, Jr. (“Conte”) appeals a judgment by the

district court dismissing his appeal of a compromise order in the

bankruptcy court as moot. Finding no error, we affirm.

I. BACKGROUND
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Joe Conte Toyota, Inc. (“Conte Toyota” or the “debtor”)

filed a voluntary petition for relief under Chapter 11 of the

United States Bankruptcy Code on June 7, 1995. At the time it

filed for bankruptcy protection, the debtor was in the process of

negotiating the sale of its business goodwill and certain

specified assets to a third party purchaser, Troy Duhon

(“Duhon”). Prior to filing, the debtor had engaged in lengthy

litigation with Gulf States Toyota, Inc., Toyota Motor Credit

Corp., and Toyota Motor Sales, Inc. (the “Toyota entities”). The

debtor alleged that the Toyota entities violated state and

federal law and the terms of various agreements. The Toyota

entities counterclaimed and filed claims on the estate.

The debtor’s board of directors authorized its attorneys to

reach a compromise of the litigation with the Toyota entities. 

On October 5, 1995, the bankruptcy court held a hearing on a

motion to approve the compromise. Conte appeared pro se to

object to the compromise of the debtor’s claim against the Toyota

entities, contending that the compromise was not in the best

interest of the debtor and that the board and the attorneys had

no authority to act. The bankruptcy court, however, approved the

compromise on November 2, 1995. The compromise contains the

following conditions, among others: that the Toyota entities will

approve Duhon as the successor dealer and operator of the

franchise and give him a Dealer Sales and Service Agreement, that

Duhon will increase his purchase offer by $110,000, that the
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Toyota entities will pay the debtor $100,000 and release all

claims against it, and that the debtor will release all claims

against the Toyota entities. 

On November 8, 1995, the debtor obtained an order of

confirmation on its reorganization plan. The plan incorporated

the terms of the compromise, specifically the sale of certain

assets of the debtor to Duhon, the transfer to Duhon of all its

rights under the Dealer Sales and Services Agreement, and the

issuance of a new Dealer Sales and Services Agreement to Duhon by

the Toyota entities. No objection was filed to the confirmation

of the plan, and no stay was requested. 

On November 13, 1995, Conte filed a notice of appeal of the

compromise order in federal district court. On November 15, the

debtor, the Toyota entities, and Duhon executed the acts

necessary to effectuate the terms of the compromise and plan. On

April 16, 1996, the district court granted Conte Toyota’s motion

to dismiss on the ground of mootness. Conte filed a timely

notice of appeal. 

II. DISCUSSION

We review the granting of a motion to dismiss de novo,

accepting as true all well-pleaded assertions in the light most

favorable to the plaintiff. House the Homeless, Inc. v. Widnall,

94 F.3d 176 (5th Cir. 1996). 

The debtor argues that Conte’s appeal of the compromise
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order is moot because the relief requested cannot be granted. In

the bankruptcy context, a court may decline to address the merits

of a claim “when there has been substantial consummation of the

plan such that effective judicial relief is no longer available -

- even though there may still be a viable dispute between the

parties on appeal.” In re Manges, 29 F.3d 1034, 1039 (5th Cir.

1994). This court considers three factors to determine whether

a controversy in this context is moot: “(i) whether a stay has

been obtained, (ii) whether the plan has been substantially

consummated, and (iii) whether the relief requested would affect

either the rights of parties not before the court or the success

of the plan.” Id. 

Applying the three factors to the present case, we find that

the district court correctly dismissed the appeal as moot. 

First, Conte never obtained a stay of implementation of the

reorganization plan pending the appeal of the compromise order. 

Second, because of Conte’s failure to obtain a stay, the plan has

now been substantially consummated. “Substantial consummation”

is a statutory measure for determining whether a reorganization

plan may be amended or modified by the bankruptcy court. 11

U.S.C. § 1127(b). “Substantial consummation” is defined as:

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

proposed by the plan to be transferred;

(B) assumption by the debtor of 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
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(C) commencement of distribution under the plan.

Id. § 1101(2). In this case, the sale of the dealership’s

equipment and Conte Toyota’s franchise rights to Duhon and the

distribution of the settlement and sale proceeds to allowed

claimants resulted in substantial consummation of the plan. 

These actions transferred substantially all of the property to be

transferred by the plan and commenced distribution under the

plan. Third, because the plan has been substantially

consummated, the relief requested by Conte would affect the

rights of parties not before the court and would destroy the

success of the plan. By settling the ongoing litigation and

securing the Toyota entities’ approval of the Duhon sale, the

compromise facilitated the sale and made it possible for the

debtor to pay the allowed claimants according to the terms of 

the plan. Neither Duhon nor the allowed claimants are before the

court; and the plan could not have been implemented successfully

without the prior compromise. Thus, Conte’s appeal of the

compromise order was correctly dismissed as moot. 

III. CONCLUSION

For the foregoing reasons, the judgment of the district

court is AFFIRMED.