Opinion ID: 762482
Heading Depth: 2
Heading Rank: 3

Heading: confirmation order

Text: 29 Debtor contends that the district court erred by vacating the Confirmation Order. We review de novo the district court's order vacating the Confirmation Order. See In re Carolina Triangle Ltd. Partnership, 166 B.R. 411, 414 (9th Cir. BAP 1994). Upon careful review, we find no error. 30 The bankruptcy court has broad powers under the Bankruptcy Code to vacate a confirmation order. See 11 U.S.C. § 105; cf. Chinichian, 784 F.2d 1440. As discussed above, when the bankruptcy court erroneously excluded from Debtor's bankruptcy estate Debtor's valuable interest in the Pension Plan, the plan could not have been confirmed. 10 Cf. Chinichian, 784 F.2d at 1444. Therefore, the district court properly vacated the Confirmation Order. 11 31 Debtor contends that the Confirmation Order should be affirmed because the plan is fair and reasonable to Selnick. Debtor's argument is without merit. First, regardless of whether the plan was fair and reasonable to Selnick, the erroneous exclusion from the bankruptcy estate of over sixty percent of an $8 million asset made plan confirmation impossible. See id. Second, now that Debtor's beneficial interest in the Pension Plan is part of the bankruptcy estate, Selnick stands to receive a greater percentage of her claim against the estate than she would have received under Debtor's proposed plan, which understated its resources by millions of dollars. Thus, the plan of reorganization was neither fair nor reasonable to Selnick. 32 Debtor also contends that the Confirmation Order should be affirmed because Selnick released any claims she had against Debtor and all other parties involved in this bankruptcy when she cashed checks bearing a restrictive endorsement. Debtor argues that this release moots Selnick's appeal. We disagree. The bankruptcy court ordered that Selnick could negotiate the checks she received under the plan of reorganization without releasing her claims against Debtor or any other party listed in the restrictive endorsements. Debtor did not appeal this order, and he cannot now collaterally attack that order. See Sidney v. Zah, 718 F.2d 1453, 1457-58 (9th Cir.1983). Even if we were to address Debtor's argument, Selnick could not have released her claims by cashing Debtor's checks pursuant to a court order that permitted Selnick to negotiate Debtor's restrictively endorsed checks without releasing her claims against Debtor. 33 Debtor also contends that the Confirmation Order should be affirmed because Selnick failed to obtain a stay pending her appeal of the Confirmation Order, thereby mooting her appeal. 12 We disagree. The district court rejected this same argument in 1994 when it denied Debtor's motion to dismiss on grounds of equitable mootness Selnick's appeal of the Exclusion Order. Debtor did not appeal that order, and cannot now collaterally attack it. See id. Even if we were to address the merits of Debtor's argument, Selnick's claim is not equitably moot because this case does not present transactions that are so complex or difficult to unwind that the doctrine of equitable mootness would apply. Compare In re Spirtos, 992 F.2d 1004, 1007 (9th Cir.1993) (finding appeal not moot when court could order debtor to return to estate postconfirmation distributions of pension plan assets), with In re Roberts Farms, Inc., 652 F.2d 793 (9th Cir.1981) (finding appeal moot when attempt to change plan distributions would create an unmanageable and uncontrollable situation), and In re Combined Metals Reduction Co., 557 F.2d 179 (9th Cir.1977) (finding appeal moot when vacating plan would be ineffective to undo sales, leases, and options long ago consummated under plan). Because we can fashion effective relief for events that transpired as a result of the bankruptcy court's refusal to grant Selnick's request for a stay, Selnick's appeal is not equitably moot. See Spirtos, 992 F.2d at 1006. 34 Debtor also contends that the Confirmation Order should be affirmed because the exclusion issue was resolved when the Chapter 7 Trustee dismissed with prejudice a turnover action against the Pension Plan Trustee. Debtor argues that this dismissal with prejudice bars Selnick's appeal of the Confirmation Order under the doctrine of res judicata. We disagree because the turnover action involved a dispute between the Pension Plan Trustee and the Chapter 7 Trustee, while the challenge to the Exclusion Order involves a dispute between Debtor and Selnick. Because Debtor cannot demonstrate that the parties in the first action are the same parties or their privies as the parties in the current action, his res judicata argument fails. See Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 59 L.Ed.2d 210 (1979); Ross v. International Bhd. of Elec. Workers, 634 F.2d 453, 457 (9th Cir.1980). For this same reason, Debtor's reliance on In re Marino, 213 B.R. 846 (9th Cir. BAP 1997), is misplaced.