Opinion ID: 659
Heading Depth: 2
Heading Rank: 3

Heading: Issues Relating to the Sale Order on Cross-Appeal

Text: The Contrarians argue on cross-appeal that the District Court erred in two respects. First, they argue that the District Court incorrectly concluded as moot under section 363(m) the issue of whether the First Securities should have been distributed to the collateral trustee of the First Lien Lenders instead of having the First Securities directly distributed to the First Lien Lenders. The Contrarians make this alternative argument in the event this Court rules that the lien release and claim-satisfaction provisions of the Sale Order were mooted under section 363(m). Second, the Contrarians argue that Aretex, as a member of the First Lien Lenders group, waived its rights to share in the fruits of the Contrarians and Beal Bank's successful appeal at the district court level affecting the status of the Securities. Both of these arguments are without merit. The Contrarians' first argument must be rejected because a distribution to the collateral trustee, i.e., Beal Bank, instead of a pro rata distribution to the First Lien Lenders, directly affects Aretex's obtaining control of WestPoint International. Aretex's bid for control is dependent upon its receiving a pro rata share of the distributed Securities. See supra Part II(B)(1). It is its status as a substantial but minority member of the First Lien Lenders group, combined with its other distributions and purchase of stock, that allows Aretex to become the controlling shareholder of WestPoint International. Id. Thus, the pro rata distribution of the First Securities is as much essential to the sale as the lien release and claim-satisfaction provisions of the Sale Order. Accordingly, because the Contrarians' challenge directly affects Aretex's control of the Debtor's business through WestPoint International  an integral element of the sale  it is moot pursuant to section 363(m). Id. The Contrarians' second argument requires no consideration in light of our holding to reverse the District Court's decision pertaining to the lien release and claim-satisfaction provisions of the Sale Order.