Source: http://openjurist.org/445/f3d/359/rare-earth-minerals-v-l
Timestamp: 2013-12-05 23:13:34
Document Index: 496345114

Matched Legal Cases: ['§ 363', '§ 363', '§ 365', '§ 362', '§ 362', '§ 365', '§ 365']

445 F3d 359 Rare Earth Minerals v. L | OpenJurist
445 F. 3d 359 - Rare Earth Minerals v. L	Home445 f3d 359 rare earth minerals v. l
445 F3d 359 Rare Earth Minerals v. L 445 F.3d 359
In re RARE EARTH MINERALS, Debtor.Mary Hazelbaker, Creditor-Appellant,v.Hope Gas, Incorporated; Dominion Field Services, Incorporated; Tri-County Oil and Gas, Incorporated, Creditors-Appellees,Stephen L. Thompson, Trustee-Appellee,v.Debra A. Wertman; Doddridge County Commission; Lucille Wagoner; Thomas Wagoner; Michael L. Bialek; Sara C. Mullins; Stephen E. Mullins; Clarence E. Sigley, Trustee of the Carolyn E. Farr Trust, Parties-in-Interest.
No. 04-2526.
Argued March 15, 2006.
Decided April 18, 2006.
ARGUED: Judy L. Shanholtz, McNeer, Highland, McMunn & Varner, L.C., Clarksburg, West Virginia, for Appellant. Stephen L. Thompson, Barth & Thompson, Charleston, West Virginia, for Appellees. ON BRIEF: James A. Varner, Robert W. Trumble, McNeer, Highland, McMunn & Varner, L.C., Clarksburg, West Virginia, for Appellant. Francis L. Warder, Jr., Fairmont, West Virginia, for Appellees.
Before WILKINSON, NIEMEYER, and DUNCAN, Circuit Judges.
Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge NIEMEYER and Judge DUNCAN joined.
WILKINSON, Circuit Judge.
In this case we consider the "statutory mootness" of an appeal challenging a bankruptcy court's authorization of the assumption and sale of an oil and gas lease. Section 363(m) of the Bankruptcy Code, 11 U.S.C. § 363(m) (2000), curtails the power of appellate courts to undo the authorized sale of estate assets to a good faith purchaser unless the sale has been stayed pending appeal. Plaintiff here failed to obtain such a stay, and the district court consequently dismissed her appeal as moot. We affirm, because to hold otherwise would undercut § 363(m)'s express concern with the finality of bankruptcy sales.
Plaintiff Mary Hazelbaker owns an undivided fractional interest in the oil and gas located on certain West Virginia property. In 1982, her predecessors in interest leased these rights in an agreement that came to be assigned to Rare Earth Minerals, Inc. The terms of the lease required Rare Earth to make royalty payments on whatever oil or gas was produced or sold, or to pay a "`shut-in' royalty" of $300 per year for each well producing gas that was not sold, marketed, or used off the premises. Hazelbaker asserts that as of 1995, Rare Earth ceased paying her either type of royalty. In 2001, believing Rare Earth to have abandoned the lease, she released the oil and gas rights to a third party, and notice to this effect was filed in the county records.
On August 19, 2002, Rare Earth filed for Chapter 11 bankruptcy protection. Stephen L. Thompson is the trustee of the estate. On June 9, 2003, the trustee moved for approval to assume the Hazelbaker lease into the estate. See 11 U.S.C. § 365(a) (2000). On June 23, Hazelbaker lodged an objection. She requested that the bankruptcy court partially lift the automatic stay that accompanies bankruptcy filings, see 11 U.S.C. § 362(a)(1), (d), to allow her to petition a state court for a judgment that the lease had been abandoned. In the alternative, she requested that the bankruptcy court itself adjudicate the issue of state-law abandonment. The bankruptcy court held a hearing on her motion four days after it was filed, but did not resolve the abandonment question, instead granting the parties' request for a continuance so that they could negotiate. A status conference on July 15 resulted in another continuance for negotiation.
The automatic stay ended of its own accord thirty days after the filing of Hazelbaker's motion, see 11 U.S.C. § 362(e), but at no time did Hazelbaker ever file suit in state court or request an adversary proceeding in the bankruptcy court. Two further status conferences were held on October 22 and November 17, 2003, during which the trustee notified the court that he was close to finding a purchaser for the assets of the estate. After the November 17 conference, Hazelbaker and the trustee did not communicate for nearly half a year.
On April 24, 2004, the trustee petitioned the bankruptcy court for approval to, inter alia, assume and sell Rare Earth's leases to Tri-County Oil and Gas, Inc. As provided under 11 U.S.C. § 365(b)(1)(A), the motion included a proposal to pay a "cure" amount to various landowners — including Hazelbaker — to whom Rare Earth owed payments. The court served a notice of sale on Hazelbaker, informing her that the proposed cure amount for her lease was $444.85. On May 11, 2004, Hazelbaker sent the trustee a letter proposing that the cure amount be increased to $2800. On June 2, 2004, she filed an objection to the trustee's sale motion, in which she again asserted her abandonment argument. But, according to the district court, she did not request an adversary hearing or file a proof of claim. In a letter dated June 4, 2004, the trustee formally accepted Hazelbaker's proposal to increase the cure amount to $2800.
On June 18, 2004, the bankruptcy court issued an order approving the assumption of leases under 11 U.S.C. § 365 and authorizing the sale of estate assets to Tri-Co