F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

I N T H E M A T T E R O F : M O R T G A G E S L T D ., Debtor
,

R E V O P G R

O U P ; S T E R

N B E R G E N T E R P R I S E S P R O F I T S H A R I N G P L A N , Appellants
,

v.

ML M A N A G E R L L C, Appellee

. No. 12-15234

D.C. Nos. 2:09-cv-02698-RCJ 2 :08-bk-07465-RJ H

R E V O P G R

O U P , Appellant
,

v.

ML M A N A G E R L L C, Appellee

. No. 12-15459

D.C. No. 2:11-cv-00200-RCJ

OPI NI ON

A ppeal from the United States District Court for the District of Ariz o na Robert Clive J ones, District J udg e, PresidingI N T H E M A T T E R O F : M O R T G A G E S L T D

. 2

Arg ued and Submitted J anuary 16, 2014—San F rancisco, California

F iled November 12, 2014

B efore: J . Clifford W allace and J ay S. B y bee, Circuit J udg es, and Robert W . Gettleman, Senior District J udg e. *

Opinion by

J udg e W allace

SUMMARY * *

Bankruptcy

The panel dismissed, a s e quitably moot, appeals from two bankruptcy

court orders in a Chapter 11 case.

P u r s u ant to the confirmed plan of reorg aniz ation of Mort ga ge s L td., a private lender for certain real estate investments in Ariz ona, ML Manag er L L C was the manag er of the loans left in Mortg a g es L td.’s portfol i o

. M o rtg ag e s L td. raised m o n e y from investors to ex tend loans to real
estate purchasers, secured by th e p urchased r eal estate, a nd acted a s servicing ag ent for the loa n s and properties. The investors received pass-throug h f ractional interests in the real

* T h e Ho n o rab le Ro b ert W

. Gettlem an , S en i o r D i s t rict Ju dg e f o r th e U.S. D i strict Co u rt f

o r th e No rth ern D istrict o f Illin ois, sittin g b y d esig n atio n

.

** T h is su m m ary co n stitu

t es n o p ar t o f t h e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.I N T H E M A T T E R O F : M O R T G A G E S L T D

. 3

estate that secured the loans and the resulting loan pay ments. They acquired an actual interest in each underly ing loan.

Rev Op Group, a g roup of pass-throug h investors, moved f o r an order ruling that ML Manag e r c o uld not act a s age n t for their interests, an d t h at objecting investors like Rev Op Group should not be o blig ed to pay an y s h a r e of an ex it financing loan taken by ML Manag er to pay for ex penses related to the completed bankruptcy

. The bankrup t c y court rejected bot h a r g uments in a “Clarification Order.” The bankruptcy court also i s sued a “ D istribution Order” approving ML Manag e r’s distribution of the proceeds of its liquidation of the loan portfolio.

The panel held that Re v O p G roup’s appeals from the Clarification O rder and the Distribution Order were e quitably
moot because the G roup did n ot seek a stay before the bankruptcy or district courts, as r equired by In re Roberts Farms, Inc.
, 652 F .2d 793 (9th Cir. 198 1). I n addition, substantial consummation of the Chap t e r 11 plan h ad occurred, the r emedy R ev Op Group soug h t would inequitably harm third parties, a n d the bankruptcy c ourt on remand would not be able to devise an equitable remedy

.

COUNSEL

Br y c e A. Suz uki (arg

ued), Robert J

. Miller, and J u stin A

. Sabin, B ry an Cave L L P, Phoenix , Ariz ona, for Appellants.

Cathy L

. Reece ( arg ued), Fe n n e m ore Craig
, P.C., Phoenix
, Ariz ona; Keith L

. Hendricks and J o shu a T

. G reer, Moy e s Sellers & Hendricks, Phoenix , Ariz ona, for Appellee.I N T H E M A T T E R O F : M O R T G A G E S L T D

. 4

OP INION

W A L L ACE, Senior Circuit J udg e:

Mortg ag es L td. was a private lender f or certain real estate i n v e s tments in Ariz ona. Mortg ag es L td. raised money f r om investors to ex tend loans to real estate purchasers, secured b y the purchased real estate, and acted as servicing ag ent for the loans and pro p e rties. The investors r eceived “pass-throug h” fractional interests in the real estate that secured the loans a nd th e resulting loan pay

ments. The pass-throug h investors acquired an actual interest in each underly ing loan.

On J une 2 4
, 2008, Mortg ag es L td. filed for Chapter 11 bankruptcy

. The company was r estructured throug h a

co n firmed bankruptcy plan. Pursuant to that plan, the entity ML M anag er L L C (ML Manag e r), the a ppellee h ere, manag es and operates the loans left i n M o rtg ag es L td.’s portfolio. ML Manag er took a $20 million loan i n “ ex it financing ” to pay for ex p enses related to the co m p l eted bankruptcy

. The bankruptcy plan w as confirmed by the bankruptcy

court in May

2009.

After confirmation, a g roup o f the pass-throug h investors (Rev Op Group) moved for an order in the bankruptcy court ruling that ML Manag er c o u l d n ot act as ag ent for their interests, and that o bjecting investors like the Rev Op Group should not be oblig a ted to p ay any share of the ex it financing loan. The bankruptcy c o urt rejected both a rg umen t s in its “Clarification Order,” issued on October 21, 2009

. R e v Op Group a ppealed to the district c ourt, which a ff i r m ed on J anuary 31, 2012.I N T H E M A T T E R O F : M O R T G A G E S L T D

. 5

Rely ing on the c onfirmed plan
, t he Clarification Order and other de cisions o f the bankruptcy court, ML Manag er beg an liquidating the loan portfolio. As liquidation proceeds became available, ML Manag e r filed an “Allocation Model”

o n September 1, 2010, to allocate c o sts and distribut e t h e proceeds to investors. Re v O p Group objected to the model and the p roposed di stributions of funds, but the bankruptcy
court p rovisionally overruled these objections. ML Manag er filed a notice of its intent to d istribute proceeds a ccording to the allocation model and a motion to approve the distributions. Rev Op Group objected to the m o t i o n

. On J anuary 20, 2011, the bankruptcy court issued its

“ D i s t r ibution Order” o v erruling the objections and g ranting ML Manag er’s motion to ap p r o v e the distributions. Rev Op Group appealed to the distr i ct c ourt, which affirmed the order on November 4, 2011.

Rev Op Group timely appealed f rom the di s trict court’s affirmances of the Clarification and D istr i b u t ion O rders to this c ourt. 1 W e have appellate jurisdiction u n d e r 2 8 U .S.C. § 158(d)(1).

The b ankruptcy court twi ce o verruled Rev O p Group’s objections, and the district court twice affirmed these orders. However, Rev Op Group never soug ht to stay the bankruptcy

or di s t ri c t court decisions pending the a ppeals. As a r esult, ML Manag er moves this court to dismiss the appeals a s

1 In a sep arate o p in io n f iled w ith th is Op in io n , w e ad d ress Rev Op Gro u p ’ s a p p e al f

ro m th e b an k

ru p t cy co u rt’ s Declarato ry J u d g m en t. Rev Op Grp

. v. ML Ma n a g er L LC
, No s. 1 2

- 1 5 2 2 9
, 1 2

- 15 4 3 8
, 1 2- 1 6 2 9 3 & 1 2

- 1 6 72 5

. In a co n cu rren tly f iled m em o ran d u

m d isp o sitio n , w e res o l v e th ree o t h er ap p eals f

ro m b an k ru p tcy co u rt sales o rd ers. Rev Op Grp

. v. ML Ma n a ger LLC , No s. 1 2- 1 5 2 2 9, 1 2

- 1 54 3 8, 1 2

- 1 62 9 3 & 1 2

- 16 7 2 5

.I N T H E M A T T E R O F : M O R T G A G E S L T D

. 6

equitably moot. The district court denied ML Manag er’s motions to dismiss on this basis
, b u t did affirm the bankruptcy

court’s ruling s on substantive g rounds.

W e review factual finding s a b o ut mootness for cl e ar

e r ror. In re Thorpe I

n sulation Co.
, 677 F .3d 869, 87 9 ( 9 t h Cir. 2012). W e review leg a l conclusions de novo. I d. B ut a s

we e x plain later, ML Manag e r is a lso entitled to move to dismiss in this court based on e quitable mootness, reg ardless of the decisions of the court s being reviewed. The “party moving for dismissal on mootness g rounds bear s a h eavy burden.” Id. (citation omitted).

I

.

Th e district court denied ML Manag er’s motions to dismiss these appeals on equitable mootness g rounds. I nstead of cross-appealing those denials, ML Man a ge r requests that

we dismiss the appeals. Rev Op Group arg ues that ML Manag er waived its rig ht to move to di s m i s s because of the failure to cross-appeal.

This is incorrect. A party can move to d ismiss an appeal

as equitably moot if “g r eat chang es in the status quo occurred after the d istric t c o urt rendered the orders appealed from,”

even if the party never moved to dismiss the appeal as moot before the district court. Algeran, Inc. v

. A dvance Ross Corp.
, 75 9 F. 2 d 1421, 1423 (9th Cir. 1985). ML Manag e r arg ues that the distributions and other actions take n i n the wake o f the district court orders have g reatly chang ed the status quo. Also, n o cross-appeal i s r equired f or an arg ument that supports the appealed judg ment, “even where the arg ument being raised has been ex plicitly rejected by the district court.” Engleson v. B urlington N. R.R. Co.
, 972 F .2d 1038, 1041 (9thI N T H E M A T T E R O F : M O R T G A G E S L T D

. 7

Cir. 1992). W e thus co n sider ML Manag er’s motions to dismiss despite its failure to cross-appeal.

I I

.

W e therefore turn to ML Manag er’s requested d ismissal of Rev Op Group’s appeals as moot. As we ex plained in T h o r pe , a bankruptcy appeal can be moot in t w o circumstances. 677 F .3d at 880. The first derives from Article I I I of the Constitution, the other from equity

.

Federal c ourts can only rule on cases or controversi e s under A rticle I I I of the Constitution. U.S. Const. a rt. I I I , § 2, cl.1. I f an appeal is constitutionally moot under Article I I I
, we

are powerless to h ear it. These a ppeals are not constitutionally moot because we “can g ive the appellant any effective relief in the event that [ we] decide[ ] the matter on the merits in [ its] favor.” Thorpe
, 677 F .3d at 880 (citations omitted). W e could entirely “reverse plan confirmation o r require modification o f the plan.” I

d.

Even when we could entirely reverse plan confirmation o r who l l y m o d ify the plan, and thus the appeals a re not constitutionally moot, we c an d ismiss appeals of bankruptcy
matters when there h as been a “comp r ehensive chang e o f circumstances

. . . so as to r ender it inequitable for this court to consider the merits of the appeal.” Id. (internal q uotation marks a n d c itation omitted). We c all this “equitable mootness,” a “

judg e-made abst e ntion doctrine” unrelated to the constitutional prohibition ag ainst hearing moot a p p eals. See, e.g.
, In re Semcrude, L.P.
, 728 F .3d 314, 317 & n .2 (3d Cir. 2013); In re UNR Indus., Inc.
, 20 F

. 3d 766, 769 (7th Cir. 1994) (“[ t] here is a big difference between inability to alter the outcome (real mootne s s ) a n d unwillingness to a lter theI N T H E M A T T E R O F : M O R T G A G E S L T D

. 8

outcome (‘equitable mootness’)”). 2 A n appeal is e quitably
moot if the case presents “transactions that are so complex o r difficult to u nwind” that “ debtors, creditors, and third parties

ar e e ntitled to rely o n [ the] final bankruptcy court order.” Thorpe , 677 F .3d at 880 (citation omitted).

A party that disag rees with an order o f a bankruptcy judg e

can move to stay the o rder before that b ankruptcy judg e, w ho has the power to suspend the order or offer o ther appropriate relief during the p endency of an appeal of the order, to protect the rig hts o f all parties i n i n t e r est. F E D

. R. B A N K R

. P. 8005. 3 The ban k r u p t c y court can condition g ranting the stay on pay ment of a supersedeas bond. Id. I f the bankruptcy judg e does n ot g ra n t t he stay , the objecting party can seek a stay from th e district court or bankruptcy appellate panel, which

ca n also g rant a stay and condition the stay on pay ment of a bond or other security

. Id. T he stay e nsures “that the estate and the status quo may b e p r eserved pending resolution o f the appeal.” In re Chateaugay Corp.
, 988 F

. 2d 322, 326 ( 2d Cir. 1993).

2 W e h av e at t im es ref

erred to eq u itab le m o o t

n ess as a j u risd ictio n al b ar. S ee, e.g

. , In re Ba ker & Dra ke, In c. , 3 5 F.3 d 1 3 4 8 , 1 35 1 (9 th Cir. 1 9 9 4) (statin g th at eq u it ab le “ [m ]o o tn ess is a j u risd ictio n al issu e”). B u t th e

co rrect ap p ro ach
, as w e reco g n ized in Th o rp e , is th at eq u itab le m o o tn ess is a p ru den tial do ctrin e w h e r eb y w e elect n o t to en tertain certain b an k ru p tcy ap p eals.

3 Aft e r a r g u m e n t in th is case, th e Ch ief J u stice su b m itted to C o n g ress

am en d m en ts t o th e Fed eral Ru les o f B an k ru p tcy P ro ced u re t

h at ch an g e

an d ren u m

b er Ru le 80 0 5

. T h o se ru les g o in to ef f ect “ Decem

b er 1
, 2 0 1 4
, an d sh al l g o v ern i n all p ro ceed in g s in b an k ru p tcy cases th ereaf

ter

co m m en ced .” P ro p o sed A m en d m en ts t o th e Fed eral Ru les o f B an k ru p tcy P ro ced u re, a va ila b le a t 2 0 1 4 US ORDER 0 0 11 (A pr. 2 5 , 2 0 1 4 ).I N T H E M A T T E R O F : M O R T G A G E S L T D

. 9

W h en an a

ppellant f ails to seek a stay without g ivi n g adequate cause, we have held that we dismiss the appeal a s equitably moot. In re Roberts Farms, Inc.
, 652 F .2d 7 9 3, 798 (9th Cir. 1981) (“[ a] p pellants have f ailed and n egl e c t e d dilig ently to pursue their a vailable r emedies to obtain a stay of the o bjectionable orders of the B ankruptcy Court and have permitted such a comprehensive chang e of circumstances to

occur as to render it inequitable for this court to consider the merits of the a

ppeal.

. . . Ap p e llants flunked the first step. They did not apply to the b a n kruptcy judg e for a stay

. . . a nd have g iven no adequate reason on the r ecord for not doing so”); see also Thorpe
, 677 F .3d at 881 (stating that “[ w] e will look first at whether a stay was soug ht, for absent that a party has not fully

pursued its rig hts,” and that the “failure to seek

a stay can render an appeal e q uitably moot”). W e have not consistently followed this helpful and c lear r ule, thoug h, a

nd have held in at least two c a ses that, in the instances there described, an appeal is not equitably moot despite the failure to seek a stay

. See, e.g.
, Suter v. Goedert , 504 F .3d 982, 990 (9th Cir. 2007); In re Sylmar Plaza, L. P

. , 3 14 F

. 3d 1070, 1074 (9th Cir. 2002).

A.

I n Roberts Farms
, we held that before we analy z e any o f the other factors reg arding e quitable mootness, the “first step” is w h ether the app e l lant “appl[ ied] to the bankruptcy judg e for a stay ” or g ave a

n “adequate reason on the record for not doing so.” 652 F .2d at 798. “ [ I ] t is oblig atory upon [ the] appellant in a situation like the one with which we are faced
to pur s u e w ith dilig ence all available remedies to obtain a stay of ex ecution of the objectionable order . . . if the failure
to do so creates a situation rendering it inequitable to reverse the orders appealed f

rom.” Id. W h ile we recog niz ed inI N T H E M A T T E R O F : M O R T G A G E S L T D

. 10

Thorpe that an appeal should not be automatically dismissed for failure t o o b t a in a stay , we r eiterated our warning from Roberts Farms that an appellant must seek a stay

. 677 F .3d at 8 81. Otherwise, we stated, the appellant has by defini t i o n “not fully pursued its rig h ts,” and thus the appeal is subject to dismissal. Id.

W e have not consistently followed t he clear Roberts Farms rule. O n at least two occasions, we denied motions to dismiss appeals despite appellants’ failures to seek sta y s o f bankruptcy

orders. See, e.g.
, Suter , 504 F .3d at 990; S ylmar
, 314 F .3d a t 1074. There is tension between Roberts Farms on the one hand and Suter a nd Sylmar on the other. The bankruptcy appellate panel has recog niz ed that tension. In re Cmty. Bancorp
, 2013 W L 4441925, at *13 (B .A.P. 9th Cir. Aug

. 20, 2 013) (stating that S yl m a r rejected a motion to dismiss as equitably moot based solely on the failure to seek

a stay , but that under Thorpe
, “failure t o s e ek a stay may alone be enoug h to r ender these appeals equitably moot,” a nd thus recog niz ing that “[ c] learly
, an in c onsistency ex ists between Sylmar and Thorpe ”).

B

.

I t would appear that the best way to reso l v e a n y inconsistency would be to cabin Sylmar and Suter as narrow

ex c e pti o n s t o the g eneral rule, f rom Roberts Farms
, that appeals from orders where the objecting party did not seek a stay are moot. Our requirement that a party seek a stay o f a bankruptcy court order with which it disag rees before appeal is g rounded in important principles of equity

. B an k r u p t cy

cases o ften implicate p a rt ies besides the debtor and its creditors. F or ex a m p l e , the estate may sell or dispose of its
p r o perty , or borrow money from a lender. As seen in t h e s eI N T H E M A T T E R O F : M O R T G A G E S L T D

. 11

appeals, the e state u sually does so pursuant to orders from the bankruptcy court. When a party tha t disag rees with an order of the bankruptcy court seeks a stay o f the order, it notifies third parties that the transactions they mig ht enter into with the estate may be undone on appeal. I f the disag reeing pa r t y fails to seek a stay , any third parties who purchased property

or ex tended a loa n m a y later have a transaction u ndone without s u f

ficient notice. T his inequitable result means that “the appellan t has a hig h oblig a tion to seek a stay pending appeal, even if the chance s of success seem dim.” 13B C H A R L E S A L A N W R I G H T & A R

T H U R R

. M I L L E R , et al.
, F E D

. P R A C

. & P R

O C

. J U R I S

. § 3 533.2.3 (3d ed.). Obviously
, if the d i s a g reeing party succeeds in obtaining a stay , it is impossible for third parties to enter into transactions with the estate, which means that no inequitable results could ensue.

Under this interpretation of our c a s e law, these consolidated appeals are moot. Rev Op G r o up never moved
to stay the a

ppealed orders before the bankruptcy or d i s t rict
courts. According to Roberts Farms
, we should dismiss these appeals as equitably moot u n less R e v O p Group offers “adequate reason” for its failure to seek a stay

. 652 F .2d at 798.

Rev Op G roup arg ues that it w as “fi nancially unable to post the ex tremely ex pensive b on d that would be required,” advising that in two related appeals from the Mortg ag es L td. bankruptcy
, ML Manag er soug ht a prohibitively ex pensive $90 million b o n d

. But this is not an adequate reason for failing to seek a stay of the Clarification and Distribution O rders. F irst, ML Manag er soug ht the $90 million b o n d f o r different or d er s. We cannot assess whether ML Manag er would h a ve requested a more affordable bond for stay s of the Clarification a

nd D istributi on Orders. Second, it is theI N T H E M A T T E R O F : M O R T G A G E S L T D

. 12

bankruptcy and district courts, follo w i n g F e deral and L ocal Rules, that determine the precise amount of the bond, not the debtor or its a g ent. In re Swift Aire Lines, Inc.
, 21 B .R. 12, 13–14 (B

. A.P. 9th Cir. 1982); a ccord I n re Tribune Co.
, 477 B .R. 465, 480–83 (B ankr. D. Del. 2012) (closely analy z ing a number of f

actors to q

uan t i f y “the p otential harm for the
pur p o s e of fix ing the amount of a bond”). The bankruptcy
court ma y have viewed stay s f or the Clarification a

nd Distribution Orders differently than the stay s soug ht for the other orde rs. Third, our precedents were quite clear at the time o f the Cla r i f

i a tion a nd Distribution Orders that an ob j e c t i n g party must at least seek a stay to ensure its appeal will not be equitably moot. See, e.g. , I n re Lowenschuss
, 170 F .3d 923, 933 (9th Cir. 1999).

Thus, Rev Op Group’s appeals must be dismi s s e d for
mootness under R oberts Farms because of its failure to seek stay s of the Clarification and Distribution Orders. This is a clear bright-line rule that all litig ants can understand.

Even if w e were to e x t e n d our a naly sis b ey ond Roberts Farms to cases in “tension” with it, Suter or Sylmar
, Rev Op Group would still not prevail. Unlike in S uter , Rev Op Group has n ever arg u ed that it has a rig h t under Ariz ona state law to return to the status quo after the d istributions and allocations made pursuant to the Clarification and D istribution Orders. See Suter
, 5 04 F .3d at 990 (“[ t] his ex ception t o m o otness

ex ists when the debtor had a state statutory rig ht to redeem real property sold to a creditor o r other pur c h a s e r” ). Nor is Rev Op G roup s olely seeking monetary damag e s from a solvent debtor. Sylmar
, 314 F .3d at 1074. Any r elief we g rant to Rev Op Group would require ov e rturning previous d i s t r ibutions and allocations to third parties not before thi sI N T H E M A T T E R O F : M O R T G A G E S L T D

. 13

court. Unlike in Syl m a r , t hen, we cannot simply award Rev Op Group more money from a stable pool of available f unds.

C.

B u t as a three-judg e panel, we cannot resolve the tension in our case law because doing so requires overrulin g p r i o r decisions of this court. In re Complaint o f R oss Island Sand & G ravel
, 226 F .3d 1 015, 1018 (9th Cir. 2000). Th ere is no

n e e d to resolve the tension here because Rev Op Grou p ’s appeals must be dismissed under the four considerations from Th o r pe , even if the failure to seek stay s of the Clarification and Distribution O rders were not fatal. Those f our considerations are: (1) “ whether a stay was soug ht, for absent that a party has not fully pursued its r ig hts”; (2) “if a stay was soug h t and not g ained, we then w ill look to whether substantial consummation of the plan has occurred”; (3) “we will look to the effect that a remedy may have o n third parties

n o t b efore the court”; (4) “ [ f] inally
, we will look at whether the bankruptcy court can fashion effective and equitable relief without c ompletely knocking the props out fro m under the plan and thereby creating a n unc o ntrollable situation before the bankruptcy

court.” 677 F .3d at 881.

As we have previously ex plained at leng th, Rev Op Group failed to satisfy

the first Thorpe consideration because it did
not seek a stay

. B y doing so, Rev Op Group d id not “use d ue dilig ence in seeking the stay ,” and has, “ by its own inaction”

“ p e r m i t [ t e d ] d ev e l o p m e n t s t o p r o c e e d w i t h o u t i t s participation,” n amely
, distributions of funds from ML Manag er to unsuspec t i ng third parties who could not have realiz e d the d istributions could b e retaken. Id. This is a case where Rev Op Group sat on its rig hts, w hich weig h s strong ly towards equitable mootness. Thorpe
, 677 F .3d at 881–82; seeI N T H E M A T T E R O F : M O R T G A G E S L T D

. 14

also NordhoffInvs., Inc. v. Zenith E lec. Corp.
, 258 F .3d 180, 187 ( 3d Cir. 2 001) (determining that “Appellants did not, at any time, seek a stay

. . . [ which] weig hs heavily in favor o f dismissing Appellants’ claims”).

Moreover, in addition to the fact that sub s tantial

con summation of the bankruptcy plan has occurred, 4 the remedy Rev Op Group seeks “would bear u nduly on the innocent.” Thorpe
, 677 F .3d at 882. That turns on whether it is p ossible to a lter the Clarification and Distribution O rders “in a way that does n o t affect third party interests to such an

ex te nt that the chang e is inequitable.” Id. Any alterations

w o u l d inequitably harm third parties not before this court. Third p arties would have to retur n d i stributions from the
estate or sell propert y back to ML Manag er. B ecause the bankruptcy proceeding is, in substance, a l i q u idation, any increase in future distributions to Rev Op Group must come from money allocated to a nd ex pected by a third party investor. Any modification to the u nderly ing orders would inequitably affect those third parties.

F inally
, “and m ost importantly
, we look to whether the bankruptcy court on rema n d m a y be able to devise an equitable remedy .” I

d

. a t 8 83. I t is n ot p ossible to devise an equitable remedy

. W h ile the bankruptcy c ourt c ould withhold proceeds from f

uture property sales and reallocate those proceeds b ased on a revised formula, because many investors have likely already received all of the distribution s o w e d to them, withhol d i n g the proceeds of future sales would not al l o w the bankruptcy c ourt to reallocate the money proportionally

. Clawing back money from those i n v e s tors

4 See Sectio n I.2 o f th e co n cu rren tly f iled O p in io n in Rev Op Grp

. v. ML Ma n a ger LLC , No s. 1 2- 1 5 2 2 9, 1 2

- 1 54 3 8, 1 2

- 1 62 9 3 & 1 2

- 16 7 2 5

.I N T H E M A T T E R O F : M O R T G A G E S L T D

. 15

who already paid their f ull a l l o c a t ion would be either impossible or inequitable. Even if these steps were possible, the costs of implementing such a r emedy w ou l d probably

ex c e ed the amount of redistributed funds.

Thus, whether Rev Op Group’s failure to seek a stay is fat a l under R oberts Farms
, standing alone, or whether we must assess this appeal u nd e r T h o r pe , the appeals must be dismissed. 5

AP P EALS DISMISSED.

5 Rev Op Gro u

p req u ests th at w e v acate th e u n d erly in g o rd ers b ecau s e th ese ap p eals are n o w m oo t, u n der In r e B u r rell
, 4 1 5 F.3 d 9 9 4 (9 th Cir. 2 0 0 5 ). H o w ev er, “ t

h e to u ch sto n e o f v acatu r is eq u ity ,” an d i t w o u ld b e in eq u itab le to allo w R e v Op Gro u p to relitig ate th e u n d erly in g i s su es in th ese ap p eals. Id

. at 9 9 9 (citatio n o m itted ). In d eed
, u n lik e in Bu rrell
, h ere Rev Op Gro u

p “ h as b y [its] o w

n act cau s ed th e d ism issal o f th e a p p e a l” b y its f ailu re to seek stay s o f th e Clarif icatio n an d Distrib u tio n Ord ers. Id

. (citatio n o m itted ).