Court Opinion

ID: 3006049
Source: CourtListenerOpinion
Date Created: 2015-09-30 17:00:33.657464+00
Date Added: 2024-06-11T11:46:03.304774
License: Public Domain

PRECEDENTIAL

        UNITED STATES COURT OF APPEALS
             FOR THE THIRD CIRCUIT

                       No. 15-1253

             In re: REVEL AC, INC., ET AL.,
                               Debtors

               IDEA BOARDWALK, LLC,
                          Appellant

        Appeal from the United States District Court
                for the District of New Jersey
          (D.C. Civil Action No. 1-15-cv-00299)
       District Judge: Honorable Jerome B. Simandle

                 Argued February 6, 2015

Before: AMBRO, SHWARTZ, and KRAUSE, Circuit Judges

            (Opinion filed: September 30, 2015)

Jeffrey A. Cooper, Esquire (Argued)
Jonathan I. Rabinowitz, Esquire
Barry J. Roy, Esquire
Rabinowitz, Lubetkin & Tully
293 Eisenhower Parkway, Suite 100
Livingston, NJ 07039

      Counsel for Appellant
      IDEA Boardwalk LLC

Michael Viscount, Jr., Esquire
John H. Strock, Esquire
Fox Rothschild
1301 Atlantic Avenue
Midtown Building, Suite 400
Atlantic City, NJ 08401

Jason N. Zakia, Esquire (Argued)
John K. Cunningham, Esquire
White & Case
200 South Biscayne Boulevard, Suite 4900
Miami, FL 33131

      Counsel for Appellees/Debtors
      Revel AC, LLC; Revel Atlantic City LLC;
      Revel Entertainment Group LLC;
      NB Acquisition LLC; SI LLC

Stuart J. Moskovitz, Esquire
819 Highway 33
Freehold, NJ 07728

      Counsel for Appellee
      Polo North Country Club Inc.

                                 2
Richard W. Riley, Esquire
Duane Morris
222 Delaware Avenue, Suite 1600
Wilmington, DE 19801

Sommer L. Ross, Esquire
Duane Morris
30 South 17th Street, United Plaza
Philadelphia, PA 19103

         Counsel for Appellees
         Wells Fargo Bank NA;
         Wells Fargo Principal Lending LLC

                  OPINION OF THE COURT

AMBRO, Circuit Judge

       We seldom focus on how to balance the four factors
that determine whether to grant a stay pending appeal despite
the practical and legal importance of these procedural
standstills. So we take this opportunity to do just that. 1

    I.   BACKGROUND

1
  Because of the time-sensitive nature of this appeal, we were
unable to give a full rationale for our ruling on the date we
entered judgment in favor of Appellant IDEA Boardwalk,
LLC, reversing the District Court’s denial of its stay request.
This opinion does so.

                              3
        In April 2012 Appellee Revel AC, Inc., et al.
(“Revel”) opened a 47-story, 710-foot-high resort-casino
(which we refer to simply as the “Casino”) in Atlantic City,
New Jersey. The Casino was marketed as “a state of the art
gaming and resort facility unlike any other in Atlantic City.”
Its cost: $2.4 billion, making it the most expensive hotel ever
built in Atlantic City. See Tom Corrigan, Atlantic City’s
Revel Casino Files for Bankruptcy Again, Wall Street J. (June
19, 2014, available at http://www.wsj.com/articles/atlantic-
citys-revel-casino-files-for-bankruptcy-again-1403212625).
As part of its plan for the Casino, Revel entered into a lease
with Appellant IDEA Boardwalk, LLC (“IDEA”) to run two
upscale nightclubs and a beach club. The lease was for a 10-
year term (with a 15-year option to extend) and obligated
IDEA to contribute $16 million of the $80 million projected
cost of construction of the clubs (in addition to its monthly
rental payments as lessee).
       Unfortunately the Casino’s $2.4 billion price tag was
no indication of its future success. A sluggish Atlantic City
economy and the Casino’s inability to turn a profit were too
much for Revel to overcome. After a failed sale attempt,
Revel’s cash flow problems made a (second) trip to
bankruptcy the only option. 2         It filed a so-called
“Chapter 22” on June 19, 2014. As part of its first-day
                                   3

2
    Revel had previously filed under Chapter 11 of the
Bankruptcy Code in March 2013 and confirmed a plan of
reorganization in May of that same year.
3
  A number of Revel’s subsidiaries also filed for bankruptcy.
They include Revel AC, LLC, Revel Atlantic City, LLC,
Revel Entertainment Group, LLC, NB Acquisition, LLC, and
SI LLC. For convenience, we refer to Revel and its
subsidiaries jointly and severally as “Revel.”

                              4
filings, Revel asked the Bankruptcy Court for permission to
sell its assets free and clear of all liens and interests (which
includes leases) and to approve bid procedures to allow that
sale as quickly as possible. The Court approved the request
and set August 7, 2014 as the auction date.
           A. Revel’s Attempt to Sell the Casino in
              Bankruptcy
        The request to sell the Casino “free and clear” raised
the ire of its tenants—among them, IDEA. 4 Its concern was
that, were the sale as proposed to occur, the value of its lease
would turn to zero notwithstanding its initial $16 million
investment.       To protect that investment, IDEA filed
objections to the proposed sale. It made clear that its intent
was not to scuttle the sale, but to block Revel from selling the
Casino stripped of its lease. Citing 11 U.S.C. § 365(h), IDEA
argued that, notwithstanding a rejection of that lease, it can
retain its possessory interest, as the subsection provides that a
       lessee may retain its rights under such lease
       . . . for the balance of the term of such lease
       and for any renewal or extension of such
       rights to the extent that such rights are
       enforceable under applicable nonbankruptcy
       law.
11 U.S.C. § 365(h)(1)(A)(ii). Alternatively, IDEA contended
that even if § 365(h) did not secure its interest, § 363(f)—the

4
    The other tenants include: (1) the so-called “Amenity
Tenants” (made up of a group of companies that operated an
array of food, liquor, and retail establishments within the
Casino); and (2) ACR Energy Partners (the provider of water
and power to the Casino).

                               5
Code provision that allows for the sale of an asset free and
clear5—was of no use to Revel, as it couldn’t satisfy any of
the five alternative conditions necessary to trigger a sale
under its strictures.
        Notwithstanding the objection of IDEA, Revel
continued the auction process and embarked on a lengthy
marketing campaign, communicating with over 200 potential
investors. Unfortunately the market for Revel’s assets proved
thin, and, because not a single qualified buyer came to the
table, the Bankruptcy Court postponed the August 7 auction.
       About a month later, on September 2, Revel closed the
Casino’s doors and barred its tenants, IDEA included, from
accessing the Casino premises. When that happened, IDEA
gave written notice that (1) it intended to continue operating
its beach club and one of its nightclubs notwithstanding the
Casino’s closure and (2) it expected Revel to continue to
abide by the terms of its lease. More specifically, IDEA
asked that Revel “continue to honor its obligation under the
Lease to provide uninterrupted utility service.” Am. Compl. ¶
96, IDEA Boardwalk, LLC v. Revel Entm’t Grp., LLC, No.
14-01756 (Bankr. D.N.J. Sept. 26, 2014), ECF No. 6. To put
its plan into action, IDEA met with representatives from

5
   Subsection 363(f) provides that a debtor can sell its assets
free and clear of “any interest” (here a lease) if (1) applicable
nonbankruptcy law so permits, (2) the interest holder
consents, (3) the interest is a lien and the price at which the
debtor’s assets are being sold is greater than the value of all
the liens on its property, (4) the validity of the interest is in
bona fide dispute, or (5) the interest holder, whether in a legal
or equitable proceeding, could be compelled to accept a
money judgment for its interest. 11 U.S.C. § 363(f)(1)–(5).

                               6
various city agencies to secure approval to operate on a stand-
alone basis and sued Revel to enjoin it from “failing to
provide utilities and parking” and engaging in any other
conduct “that prevents IDEA from operating the HQ Dayclub
and HQ Nightclub in accordance with the terms of the
Lease.” Id. ¶ 118. Furthermore, and to assert its rights under
§ 365(h), IDEA sought a declaratory judgment that, “under
applicable law[,] the Lease is a lease of non-residential real
property as that term is defined and governed by 11 U.S.C. §
365 and, as such, is entitled to all relevant statutory
protections, including, but not limited to[,] 11 U.S.C. §
365(h).” Id. ¶ 144(a).6
           B. Polo North Becomes          “Stalking    Horse”
              Bidder
       Revel’s continued marketing efforts paid off when it
came to terms on September 5, 2014 with Polo North Country
Club, an entity controlled by a Florida-based real estate
developer. Under the proposed Asset Purchase Agreement,
Polo North agreed to buy the Casino for $90 million and to
serve as the “stalking horse” bidder at the upcoming auction.
If Polo North lost at auction, it would receive $3 million as a
break-up fee. If, however, Polo North walked away from the
deal, it would surrender its $10 million deposit. The
Bankruptcy Court approved Revel’s request to modify the

6
    In connection with Revel’s first bankruptcy case, IDEA
likewise sought, among other things, essentially the same
declaration. Am. Compl. ¶ 89(a), IDEA Boardwalk, LLC v.
Revel AC, Inc., No. 13-2013 (Bankr. D.N.J. May 30, 2014),
ECF No. 7. In its answer, Revel “[d]enied” IDEA’s
allegation that it held a non-residential lease. See Answer ¶¶
82–89, IDEA Boardwalk, LLC v. Revel AC, Inc., No. 13-2013
(Bankr. D.N.J. June 13, 2014), ECF No. 8.

                              7
auction bid procedures to allow for the payment of the break-
up fee and set a revised bid deadline for September 24, 2014.
At the postponed auction, which ultimately took place on
October 1, the highest bidder was not Polo North but
Brookfield U.S. Holdings, LLC, as its $110 million bid
topped the $94.5 million all-cash bid of Polo North. The
Bankruptcy Court approved the sale to Brookfield on
October 7.
       Reentering the picture, IDEA argued that “it has the
right under Section 365(h) of the [] Code to elect to remain in
possession and[,] in that event, [Revel] [is] obligated to
provide possession and rights appurtenant thereto,” including
“various easements for utilities and other services.”
Objection of IDEA Boardwalk, LLC ¶¶ 74, 77, In re Revel
AC, Inc., No. 14-22654 (Bankr. D.N.J. Oct. 13, 2014), ECF
No. 754. IDEA also reaffirmed that, because it “has direct
access to the boardwalk and the streets,” it “can operate [its
clubs] without impinging . . . [Revel’s] possessory rights.”
Id. ¶ 78.

       Before Revel could respond, Brookfield walked away
from the deal, thus surrendering its $11 million deposit and
bringing Polo North back into the fold as the back-up winning
bidder. The Bankruptcy Court thereafter granted Revel’s
motion to terminate the sale to Brookfield and scheduled a
hearing to approve the sale to Polo North.

           C. Revel Responds to IDEA at the 11th Hour
       Late on the Friday night just three days before the
January 5, 2015 sale hearing, Revel filed an “Omnibus
Reply” to IDEA’s objections. Regarding the latter’s § 365(h)
argument, Revel urged the Court to follow the Seventh
Circuit’s decision in Precision Indus., Inc. v. Qualitech Steel
SBQ, LLC, 327 F.3d 537 (7th Cir. 2003), which held that

                              8
§ 365(h) doesn’t disable § 363(f)’s authority to sell property
subject to a lease free and clear of that lease and instead
triggers only when a debtor seeks to reject a lease under §
365. Id. at 548. Revel also asserted that it could satisfy one of
§ 363(f)’s five conditions—namely, § 363(f)(4)—because a
bona fide dispute exists with respect to the validity of IDEA’s
lease. According to Revel, though the form of its agreement
with IDEA gives the appearance of a lease, because rent was
“based entirely on a percentage of the revenue derived from”
IDEA’s operations, it was not a “true lease[] entitled to
benefit from the applicable protections set forth in the
Bankruptcy Code.” Debtors’ Omnibus Reply ¶ 20, In re
Revel AC, Inc., No. 14-22654 (Bankr. D.N.J. Jan. 2, 2015),
ECF No. 1109.

           D. The Sale Hearing
        At the sale hearing, the Bankruptcy Court considered
the following legal issues: (1) whether sales of property under
§ 363(f) can wipe out a lessee’s possessory interest under
§ 365(h); and (2) whether Revel introduced enough evidence
to show that the validity of IDEA’s lease was the subject of a
bona fide dispute under § 363(f)(4), thus satisfying an
eligibility requirement to invoke subsection (f). 7 Only if the

7
     The Bankruptcy Court did not address whether IDEA
would receive adequate protection under 11 U.S.C. § 363(e)
if the Casino were sold free and clear of its lease. Under that
provision, where a tenant expects to lose its lease and asks for
protection of its interest, “the court, with or without a hearing,
shall prohibit or condition such use, sale, or lease as is
necessary to provide adequate protection of such interest.”

                                9
Court found in favor of Revel on each of these two issues
could it sell the Casino free and clear of IDEA’s lease.
        On the first issue, the Bankruptcy Court pointed to a
“split of authority”: some courts hold that § 363(f) doesn’t cut
off a tenant’s possessory rights under § 365(h), see, e.g., In re
Zota Petroleums, LLC, 482 B.R. 154, 163 (Bankr. E.D. Va.
2012), while others go another path to say that § 365(h) “says
nothing at all about sales of estate property, which are the
province of section 363,” Qualitech, 327 F.3d at 547, the
result in the latter case being that sales of property under §
363 can cut off the possessory interests of lessees under §
365. See Sale Hr’g Tr. 51:9-13, In re Revel AC, Inc., No. 14-
22654 (Bankr. D.N.J. Jan. 8, 2015), ECF No. 1175.
       The second issue, the Bankruptcy Court conceded,
presented “the more difficult” legal question: whether Revel
had enough evidence to show that the validity of IDEA’s
lease was the subject of a bona fide dispute under § 363(f)(4).
Id. at 52:21–22. The trouble was that Revel didn’t provide
the purportedly disputed lease to the Bankruptcy Court or
much of anything to cloud its validity, though § 363(f) places
the burden squarely on Revel’s shoulders. See id. at 53:3–5
(“[Revel] didn’t give me any of the leases . . . or any, really,
evidence in support of its position of the bona[]fide dispute . .
. .”). But, because of the need to push the sale through, the
Court maintained that it “can’t look at the result totally as to
what the law requires,” id. at 53:8, though, if time weren’t of
the essence, it “probably would have put [the hearing] off to
have more evidence presented,” id. at 55:12–13. With not
much to go on, the Court concluded that, because IDEA (and
the other tenants) were akin to “partners of [Revel’s]
enterprise,” id. at 54:14–15, rather than mere tenants, Revel
met its burden that “there is a bona[]fide issue in dispute” as
to the leases, id. at 55:16–17. Hence the Court approved the
sale and allowed Revel to sell its assets “free and clear of

                               10
existing tenancies and/or possessory rights, irrespective of
any rights a tenant may hold under 11 U.S.C. § 365(h),
including, but not limited to, all possessory rights.” Sale
Order ¶ 14, In re Revel AC, Inc., No. 14-22654 (Bankr. D.N.J.
Jan. 8, 2015), ECF No. 1138.
       IDEA appealed that order and moved to stay the
Court’s decision pending appeal, noting the risk that, if the
decision were not stayed, its appeal would be moot under
11 U.S.C. § 363(m) once the sale closed. That provision
provides, in relevant part, that
       [t]he reversal or modification on appeal of an
       authorization . . . of a sale or lease of property
       does not affect the validity of a sale or lease
       under such authorization to an entity that
       purchased or leased such property in good faith,
       whether or not such entity knew of the
       pendency of the appeal, unless such
       authorization and such sale or lease were stayed
       pending appeal.
11 U.S.C. § 363(m).       In a one-paragraph order, the
Bankruptcy Court denied IDEA’s request. With its options
dwindling and time winding down, IDEA filed an emergency
motion before the District Court to stay the Bankruptcy
Court’s sale order.

           E. The District Court Denies IDEA’s Stay
              Request
       In considering whether to grant a stay pending appeal,
courts consider the following four factors: (1) whether the
appellant has made a strong showing of the likelihood of
success on the merits; (2) will the appellant suffer irreparable
injury absent a stay; (3) would a stay substantially harm other

                              11
parties with an interest in the litigation; and (4) whether a stay
is in the public interest. See, e.g., Republic of Phil. v.
Westinghouse Electric Corp., 949 F.2d 653, 658 (3d Cir.
1991). Because IDEA is the only party before us, we limit
our examination of the District Court’s ruling to its treatment
of IDEA’s objections.

               1. Likelihood of Success
        On the first prong, the District Court maintained that
IDEA needed to show that it had a “substantial” or “strong”
case on appeal. In re Revel AC, Inc., 525 B.R. 12, 24 (D.N.J.
2015) (internal quotation marks omitted).           Addressing
§ 365(h) first, the Court noted that, because the legal issue
was the subject of an “undisputed split of authority,” IDEA at
most showed a possibility and not a likelihood (which we
understood the Court to mean more likely than not) of
success. Id. (internal quotation marks omitted).
         It next addressed whether the Bankruptcy Court
clearly erred in finding that Revel put forth enough evidence
to show that a bona fide dispute existed as to the validity of
IDEA’s lease. See id. at 26. Despite the Bankruptcy Court’s
failure to mention it, the District Court emphasized that
“IDEA specifically sought a declaratory judgment concerning
the nature of [its] agreement with [Revel],” id. at 29, even
though, as IDEA asserted, its lawsuit “principally concerned
[its] request for an energy easement, rather than an effort . . .
to challenge the characterization of its Agreement,” id. at 29
n.14. In the District Court’s view, the pending litigation
“arguably provide[d] some objective basis . . . to find . . .
some bona fide issue in dispute,” id. at 29 (emphases added),
because, “in answering [the] complaint, [Revel] specifically
denied that [the] Agreement constituted a lease,” id. at 29
n.14. Consequently, the District Court concluded that IDEA

                               12
did not “demonstrate[] a likelihood of success on the merits”
of the § 363(f)(4) issue either. Id. at 30.8

           2. Irreparable Harm
        On the irreparable-harm prong, the District Court
considered whether IDEA had “demonstrated the potential for
an actual and imminent, rather than remote or speculative,
irreparable harm.” Id. at 31. IDEA posited that, absent a stay,
if Revel and Polo North closed on the sale, this would render
its claim statutorily moot under § 363(m), leading to the loss
of its lease and the end of its business at the Casino. In the

8
   The District Court came to the same conclusion regarding
whether Revel satisfied § 363(e)’s adequate protection
requirement. IDEA had argued that adequate protection
means continued possession of its lease, not merely money
damages, as the Code provides that “adequate protection may
be provided by . . . granting such other relief . . . as will result
in the realization by such entity of the indubitable equivalent
of such entity’s interest in such property.” 11 U.S.C. §
361(3). But the Court thought otherwise, declaring that
rejection damages were an adequate substitute for continued
possession. See In re Revel, 525 B.R. at 31 (noting that “it is
more than arguable that granting possession to [IDEA] in the
present circumstances of a catastrophically failed casino-hotel
concept would be no more ‘adequate’ than what [it] received,
namely, the right to assert [a] claim[] for rejection damages or
other relief as [an] unsecured creditor[]”). It also minimized
the Bankruptcy Court’s failure to make any findings on
whether IDEA’s interest would be adequately protected. In
the District Court’s view, because the Bankruptcy Court
found that § 363(f) was satisfied, it “necessarily found the
interests of [the various tenants] adequately protected.” Id.

                                13
District Court’s view, a mooted claim doesn’t qualify as an
irreparable injury nor does the potential loss of IDEA’s
possessory rights. See id. Regarding the latter, the Court
noted that IDEA effectively had been dispossessed since
September 2014 and would gain nothing by retaking
possession of a space “in an empty and commercially-
unproductive building.” Id. at 32; see also id. at 31
(“[T]hough the [tenants] assert that the loss of their
possessory rights would result in irreparable injury, [they]
ignore that they have been without valuable possessory rights
since September 2014.”). Hence, as with the first prong, the
Court held it did not weigh in IDEA’s favor.

           3. Harm to Others
        For the third factor in the stay analysis, IDEA
contended that, because it doesn’t seek a stay of the sale itself
but only the provision of the Sale Order that terminates its
lease, Revel wouldn’t be injured. The District Court,
focusing only on the debtor (presumably because it was the
only party opposing IDEA’s stay motion), thought otherwise.
In its view, because of the “easily terminable $10 million
option [of Polo North] to purchase [Revel’s] assets,” there
was a good chance it “would elect not to proceed with
closing” if the Court granted the stay. Id. at 32 (internal
quotation marks omitted). And “the palpable risk of losing a
ready buyer,” the Court maintained, “demonstrates . . . a risk
of substantial harm to [Revel].” Id. (emphasis omitted); see
also id. at 33 (describing Revel’s exhaustive search for a
buyer that yielded only two qualified buyers). Thus it found
that the third factor weighed against a stay.

           4. Public Interest
       Finally, IDEA asserted that the public interest favors a
stay because the public has a strong interest in the correct

                                14
application of bankruptcy law and the continuing operation of
hospitality providers at Revel. Again the District Court
disagreed. In its view, even assuming that IDEA expressed
valid public policy concerns, “such concerns would not
sufficiently outweigh the far more prevalent interest in
facilitating the success of bankruptcy proceedings,” id., along
with the “permanent loss of approximately 4,000 jobs” and
“substantial detriment to the City of Atlantic City and []
surrounding areas” a failed sale could trigger, id. at 34
(internal quotation marks omitted). As with the first three
factors, the public interest “favors the facilitation of the asset
sale, and, accordingly, weighs against the imposition of a
stay.” Id.

       IDEA appeals.
II.    JURISDICTION
       Revel argues that we don’t have jurisdiction to
entertain IDEA’s appeal from the District Court’s stay denial
under either 28 U.S.C. § 158(d)(1) or 28 U.S.C. § 1292(a)(1).
We disagree. Subsection 158(d)(1) provides that “[t]he courts
of appeals shall have jurisdiction of appeals from all final
decisions, judgments, orders, and decrees” entered under
subsections 158(a) and (b). Though a stay denial is not
technically a final judgment, it is here in a practical sense
because, under 11 U.S.C. § 363(m), the upshot of declining
IDEA’s stay request is to prevent it from obtaining a full
airing of its issues on appeal and a decision on the merits, as
that provision protects purchasers from any modification on
appeal of an order authorizing a sale. Consequently, the
District Court’s decision denying IDEA’s stay request was
final for purposes of § 158(d)(1). See In re Trans World
Airlines, Inc., 18 F.3d 208, 215 (3d Cir. 1994)
(acknowledging that “finality must be viewed more
pragmatically in bankruptcy appeals under § 158(d) than in

                               15
other contexts”); see also James M. Grippando, Circuit Court
Review of Orders on Stays Pending Bankruptcy Appeals to
U.S. District Courts or Appellate Panels, 62 Am. Bankr. L.J.
353, 360 (1988) (arguing that “‘finality’ for purposes of
section 158 is a fluid concept to be determined [on] a case by
case basis”).

        Our decision in Trans World Airlines is not to the
contrary. The question there was whether the District Court’s
grant of a stay was final for purposes of § 158(d). We held
that it was not, “[e]ven under the most relaxed concept of
finality,” because the stay grant didn’t “fully adjudicate a
specific adversary proceeding between the parties.” In re
Trans World Airlines, 18 F.3d at 216. The difference here is
that the District Court denied a stay, and the practical effect
was to resolve IDEA’s appeal on the merits, as the
combination of the imminent closing of the sale and § 363(m)
would have mooted its appeal.
       Thus, where it is all but assured that a statute will
render an appeal moot absent a stay, a stay denial is
appealable under § 158(d)(1). We express no opinion on
whether we have also have jurisdiction under 28 U.S.C. §
1292(a)(1)—see generally In re Forty-Eight Insulations, Inc.,
115 F.3d 1294, 1300 (7th Cir. 1997) (exercising jurisdiction
over a stay denial under 28 U.S.C. § 1292(a)(1) because the
District Court’s order had “both the effect of an injunction
and [] serious, perhaps irreparable, consequences” (quoting
Cent. States v. Cent. Cartage Co., 84 F.3d 988, 991 (7th Cir.
1996) (internal quotation marks omitted))—and leave for
another day whether we have jurisdiction to review a stay
denial where the underlying appeal could become equitably
moot.

III.   STANDARD OF REVIEW

                              16
       At this juncture, only the District Court’s denial of
IDEA’s stay request is at issue. We generally review appeals
from a denial of a stay for abuse of discretion, see Bradley v.
Pittsburgh Bd. of Educ., 910 F.2d 1172, 1175 (3d Cir. 1990),
giving “proper regard to . . . [the District Court’s] ‘feel’ of the
case,” Omega Importing Corp. v. Petri-Kine Camera Co., 451
F.2d 1190, 1197 (2d Cir. 1971) (Friendly, J.) (citation
omitted). However, we review de novo the District Court’s
decision on the likelihood of success, for it involves a purely
legal determination. See In re Forty-Eight Insulations, 115
F.3d at 1301.

IV.    ANALYSIS
       Despite the growing importance of stays pending
appeal, we have provided little direction on how to balance
the four stay factors, mostly “[b]ecause this [C]ourt ordinarily
grants or denies a stay pending appeal without opinion.”
Westinghouse Electric Corp., 949 F.2d at 658. Despite its
comprehensiveness, Westinghouse unfortunately shed little
light on how to balance the four stay factors when not all of
them point in the same direction. (The factors there all
favored a stay denial.) We take this opportunity to provide
guidance on how to conduct a balancing of the stay factors.

           A. The Sliding-Scale Approach to Balancing the
              Stay Factors

       Under Federal Rule of Bankruptcy Procedure 8007, a
party can move to stay the effect of a bankruptcy court order
pending a resolution on appeal. See Fed. R. Bankr. P. 8007.
The factors considered “overlap” the familiar ones courts
look to in ruling on applications for preliminary injunctions.
See Nken v. Holder, 556 U.S. 418, 434 (2009) (observing that
“similar concerns arise whenever a court order may allow or
disallow anticipated action before the legality of that action

                                17
has been conclusively determined”). To repeat essentially
what was already noted above, the following factors come
into play:
      (1) whether the stay applicant has made a
      strong showing that [it] is likely to succeed on
      the merits; (2) whether the applicant will be
      irreparably injured absent a stay; (3) whether
      issuance of the stay will substantially injure
      the other parties interested in the proceeding;
      and (4) where the public interest lies.
Hilton v. Braunskill, 481 U.S. 770, 776 (1987). In order not
to ignore the many gray shadings stay requests present, courts
“balance[e] them all” and “consider the relative strength of
the four factors.” Brady v. Nat’l Football League, 640 F.3d
785, 789 (8th Cir. 2011) (quoting Fargo Women’s Health
Org. v. Schafer, 18 F.3d 526, 538 (8th Cir. 1994) (internal
quotation marks omitted)); see also 16A Charles Alan Wright
et al., Federal Practice and Procedure § 3954 (4th ed. 2008)
(“The four factors should be balanced; thus, for example, if
the balance of harms tips heavily enough in the stay
applicant’s favor then the showing of likelihood of success
need not be as strong, and vice versa.” (footnotes omitted)).

        “[T]he most critical” factors, according to the Supreme
Court, Nken, 556 U.S. at 434, are the first two: whether the
stay movant has demonstrated (1) a strong showing of the
likelihood of success and (2) that it will suffer irreparable
harm—the latter referring to “harm that cannot be prevented
or fully rectified” by a successful appeal, Roland Mach. Co.
v. Dresser Indus., 749 F.2d 380, 386 (7th Cir. 1984) (Posner,
J.). Though both are necessary, the former is arguably the
more important piece of the stay analysis. As Judge Posner
has remarked, it isn’t enough that the failure to obtain a stay
will be “a disaster” for the stay movant but only a “minor

                              18
inconvenience to the defendant,” as “[e]quity jurisdiction
exists only to remedy legal wrongs; [thus,] without some
showing of a probable right[,] there is no basis for invoking
it.” Id. at 387.
        Just how strong of a merits case must a stay applicant
show? The “formulations used to describe the degree of
likelihood of success that must be shown” vary widely.
Mohammed v. Reno, 309 F.3d 95, 100 (2d Cir. 2002)
(emphasis in original). To give but a sampling of the range
that exists, some require a showing that the underlying appeal
is “more likely to succeed than fail.” Abdul Wali v. Coughlin,
754 F.2d 1015, 1026 (2d Cir. 1985) overruled on other
grounds by O’Lone v. Estate of Shabazz, 482 U.S. 342
(1987). Others call for a “substantial possibility, although
less than a likelihood, of success.” Dubose v. Pierce, 761
F.2d 913, 920 (2d Cir. 1985)9 (quoting Hayes v. City Univ. of
N.Y., 503 F. Supp. 946, 963 (S.D.N.Y 1980)) vacated on
other grounds 108 S. Ct. 2890 (1988); see also generally John
Y. Gotanda, The Emerging Standards for Issuing Appellate
Stays, 45 Baylor L. Rev. 809, 813–15 (1993). For our Court,
a sufficient degree of success for a strong showing exists if
there is “a reasonable chance, or probability, of winning.”
Singer Mgmt. Consultants, Inc. v. Milgram, 650 F.3d 223,
229 (3d Cir. 2011) (en banc). Thus, while it “is not enough
that the chance of success on the merits be ‘better than
negligible,’” Nken, 556 U.S. at 434 (citation omitted), the
likelihood of winning on appeal need not be “more likely than
not,” Singer Mgmt. Consultants, 650 F.3d at 229; see also
Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc.,
559 F.2d 841, 844 (D.C. Cir. 1977) (noting that the trouble

9
   Yes, we realize this is the same Circuit Court in the same
year. Read on and realize that we are not immune from
internal tensions in our opinions.

                             19
with a “strict ‘probability’ requirement is [] it leads to an
exaggeratedly refined analysis of the merits at an early stage
in the litigation”).
        On the second factor, the applicant must “demonstrate
that irreparable injury is likely [not merely possible] in the
absence of [a] [stay].” Winter v. Natural Res. Def. Council,
Inc., 555 U.S. 7, 22 (2008) (emphasis in text). While a
reference to “likelihood” of success on the merits has been
interpreted by courts to cover the generic range of outcomes,
for irreparable harm we understand the Supreme Court’s use
of “likely” to mean more apt to occur than not. See generally
Michigan v. U.S. Army Core of Engineers, 667 F.3d 765, 788
(7th Cir. 2011) (holding that for harm to be likely “there must
be more than a mere possibility that harm will come to pass
… but the alleged harm need not be occurring or be certain
before a court may grant relief”) (citation omitted).
        “Once an applicant satisfies the first two factors, the
traditional stay inquiry calls for assessing the harm to the
opposing party and weighing the public interest.” Nken, 556
U.S. at 435. We weigh the likely harm to the movant (absent
a stay) (factor two) against the likely irreparable harm to the
stay opponent(s) if the stay is granted (factor three). This is
called the balancing of harms or balancing of equities. We
also take into account where the public interest lies (factor
four)—in effect, how a stay decision has “consequences
beyond the immediate parties.” Roland Mach., 749 F.2d at
388.
       In this context, a number of outcomes are possible.
Where the balance of harms and public interest weigh in
favor of a stay and the court deems that the stay movant has
made a sufficient showing of success on appeal, a stay should
be granted. Where the opposite is true—i.e., the merits,
balance of harms, and public interest favor the stay

                              20
opponent—a stay should be denied. Between these easy
examples are the more difficult cases, such as “where the
merits favor one party and the balance of harms favors the
other.” Gotanda, supra, at 821. There (along with the public
interest) we must “evaluate the degree of irreparable injury
with the prospects of prevailing on the merits.” Id.

        In deciding how strong a case a stay movant must
show, we have viewed favorably what is often referred to as
the “sliding-scale” approach. See Constructors Ass’n of W.
Pa. v. Kreps, 573 F.2d 811, 815 (3d Cir. 1978); Del. River
Port Auth. v. Transamerican Trailer Transp., Inc., 501 F.2d
917 (3d Cir. 1974). Under it, “[t]he necessary ‘level’ or
‘degree’ of possibility of success will vary according to the
court’s assessment of the other [stay] factors.’” Mohammed,
309 F.3d at 101 (second alteration in original) (quoting Wash.
Metro., 559 F.2d at 843). Stated another way, “[t]he more
likely the plaintiff is to win, the less heavily need the balance
of harms weigh in [its] favor; the less likely [it] is to win, the
more need it weigh in [its] favor.” Roland Mach., 749 F.2d at
387. As we described in Kreps (in considering all four
factors though in the context of deciding whether to grant a
preliminary injunction),
       in a situation where factors of irreparable harm,
       interests of third parties and public
       considerations strongly favor the moving party,
       an injunction might be appropriate even though
       plaintiffs did not demonstrate as strong a
       likelihood of ultimate success as would
       generally be required. In contrast, where the
       threatened irreparable injury is limited or is
       balanced to a substantial degree by
       countervailing injuries which would result to
       third parties, or to the public interest from the
       issuance of an injunction, greater significance

                               21
       must be placed upon the likelihood that the
       party will ultimately succeed on the merits of
       the litigation.
573 F.2d at 815 (footnotes omitted) (internal quotation marks
omitted); see In re A & F Enters., Inc. II, 742 F.3d 763, 766
(7th Cir. 2014) (“As with a motion for a preliminary
injunction, a ‘sliding scale’ approach applies; the greater the
moving party’s likelihood of success on the merits, the less
heavily the balance of harms must weigh in its favor, and vice
versa.”); Mohammed, 309 F.3d at 101 (“The probability of
success that must be demonstrated is inversely proportional to
the amount of irreparable injury plaintiff[] will suffer absent
the stay. Simply stated, more of one excuses less of the
other.” (alteration in original) (quoting Mich. Coal. of
Radioactive Material Users, Inc. v. Griepentrog, 945 F.2d
150, 153 (6th Cir. 1991).
        Keeping in mind that the first two factors are the most
critical, if “the chance of success on the merits [is only] better
than negligible” and the “possibility of irreparable injury” is
low, a stay movant’s request fails. Nken, 556 U.S. at 434
(internal quotation marks omitted). Likewise, “even if a
movant demonstrates irreparable harm that decidedly
outweighs any potential harm to the [stay opponent] if a stay
is granted, [it] is still required to show, at a minimum,
‘serious questions going to the merits.’” Mich. Coal. of
Radioactive Material Users, 945 F.2d at 153–54 (quoting In
re DeLorean Motor Co., 755 F.2d 1223, 1229 (6th Cir.
1985)).
       Our dissenting colleague criticizes the “sliding-scale”
approach as “fail[ing] to honor” Third Circuit precedent.
Dissenting Op. 1. In her view, there is no balancing—a
court’s consideration of a stay request is an all-or-nothing
proposition. To merit a stay, she believes, the stay applicant

                               22
must “demonstrate,” id., that it will “satisfy,” id. at 3, each of
the four stay factors. If it doesn’t, then, even if the stay
applicant’s chances of success on appeal are assured (let
alone more probable than not) and the applicant will likely
suffer an irreparable injury, a stay must be denied if, for
example, it isn’t in the public interest. That approach is not
only impractical, it has the potential to be deeply unfair, and
is one we have explicitly disavowed. In Delaware River Port
Authority v. Transamerican Trailer Transport, for example,
we couldn’t have been clearer in establishing that
“consideration of [the four] factors by the district court
requires a ‘delicate balancing.’” 501 F.2d at 920. We
reaffirmed that concept in Kreps in observing that “no one
aspect” of the stay analysis “will necessarily determine its
outcome,” 573 F.2d at 815, assuming, we pause to note, that
the party seeking a stay has made a sufficient showing on the
first two factors. Therefore, where the balance of harms and
public interest “strongly favor[]” a stay, a court may enter it
even if the applicant didn’t “demonstrate as strong a
likelihood of ultimate success as would generally be
required.” Del. River Port Auth., 501 F.2d at 923. Relatedly,
“when considerable injury will result from either the grant or
denial of a preliminary injunction, these factors [i.e., the
balance of harms] to some extent cancel each other and
greater significance must be placed upon the likelihood that
each party will ultimately succeed on the merits of the
litigation.” Id. at 924. To the extent later statements in our
opinions suggest the opposite—that “a complete failure to
satisfy any one of [the stay] factors precludes a stay,”
Dissenting Op. 2—they are not binding. See United States v.
Rivera, 365 F.3d 213, 213 (3d Cir. 2004) (“This Circuit has
long held that if its cases conflict, the earlier is the controlling
authority and the latter is ineffective as precedents.”).
       To sum up, all four stay factors are interconnected, and
thus the analysis should proceed as follows. Did the applicant

                                23
make a sufficient showing that (a) it can win on the merits
(significantly better than negligible but not greater than 50%)
and (b) will suffer irreparable harm absent a stay? If it has,
we “balance the relative harms considering all four factors
using a ‘sliding scale’ approach. However, if the movant
does not make the requisite showings on either of these [first]
two factors, the [] inquiry into the balance of harms [and the
public interest] is unnecessary, and the stay should be denied
without further analysis.” In re Forty-Eight Insulations, 115
F.3d at 1300–01 (internal citation omitted). But depending on
how strong a case the stay movant has on the merits, a stay is
permissible even if the balance of harms and public interest
weigh against holding a ruling in abeyance pending appeal.

           B. Application
         Because our assessment of how strong a case IDEA
has is closely linked to the outcome of the balancing test, we
begin with the test itself (though we write from the back-end
first): the stronger the balance of harms and public interest is
in IDEA’s favor, the less a showing of potential success on
appeal we demand (keeping in mind that the likelihood of
success must be at least “a substantial case on the merits,”
Hilton, 481 U.S. at 778); the lesser the harms, the showing of
success must be stronger.
           1. Whom does the balance of harms and public
              interest favor?

        To establish irreparable harm, a stay movant “must
demonstrate an injury that is neither remote nor speculative,
but actual and imminent.” Tucker Anthony Realty Corp. v.
Schlesinger, 888 F.2d 969, 975 (2d Cir. 1989) (internal
quotation marks omitted). “The possibility that adequate
compensatory or other corrective relief will be available at a
later date, in the ordinary course of litigation, weighs heavily

                              24
against a claim of irreparable harm.” Sampson v. Murray,
415 U.S. 61, 90 (1974) (internal quotation marks omitted);
see also Gotanda, supra, at 814 (defining “irreparable injury”
as “the harm [] the movant will suffer during the pendency of
the litigation that cannot be prevented or fully rectified by the
tribunal’s final decision”).

        IDEA asserts that, absent a stay, its appeal will be
batted out of court by § 363(m), rendering the continued
operation of its business at the Casino impossible. As to
potential money damages, IDEA continues, the most it will
receive is pennies on the dollar, which grossly undervalues its
lease (and the millions it invested in reliance of it). See IDEA
Br. 41 (arguing that “a money judgment will not compensate
[it] for [the] loss of its possessory rights under §[]365(h)
because [Revel] [is] insolvent and, as a result, [has] no ability
to provide payment on any claim [IDEA] may have”). For its
part, Revel responds that IDEA’s argument rests on a flawed
assumption: that continued possession is substantially more
valuable than the rejection damages it would receive.
According to Revel (and the District Court), because Polo
North would likely walk away from the sale if it were stayed,
IDEA would be left with nothing but a possessory interest in
a vacant building. See In re Revel, 525 B.R. at 32 (“[I]t is
entirely logical that the absence of any occupant in the []
[C]asino would leave [IDEA] with, in essence, a possessory
right in an empty and commercially-unproductive building.”).
       We do not accept that assertion. First, there is nothing
in the record to refute IDEA’s contention that it can operate
independently of the Casino. Indeed, a principal purpose of
its lawsuit against Revel was to confirm IDEA’s right of
access to a power source so that it can begin running its
business again. See Oral Arg. Tr. 85:4–7 (noting that IDEA
needed a utility easement “to continue to operate and work
with the utility company”). We thus deem unsupportable the

                               25
suggestion of the District Court that, if Polo North walked
away, IDEA would be left with “a possessory right in an
empty and commercially-unproductive building.” In re
Revel, 525 B.R. at 32.
        That still leaves us with the lingering question of
whether rejection damages would sufficiently compensate
IDEA for the loss of possession (and its business). On that
question, we have previously observed that, though “a purely
economic injury, compensable in money, cannot satisfy the
irreparable injury requirement … an exception exists where
the potential economic loss is so great as to threaten the
existence of the movant’s business.” Minard Run Oil Co. v.
U.S. Forest Serv., 670 F.3d 236, 255 (3d Cir. 2011) (citation
and internal quotation marks omitted). That exception applies
here. If we deny the stay, IDEA will lose not only its multi-
million dollar investment but also the opportunity to operate
what was, until the Casino closed, a profitable business. See
Oral Arg. Tr. 100:12–18. In this context, IDEA shows
sufficient irreparable injury to it absent a stay. Thus we turn
to the harm to Revel (the only party who opposed IDEA’s
request for a stay) 10 and the public interest (the latter, in
essence, balances the benefits and harms to the public if a
stay is imposed and if it is not).
       In assessing this side of the balance, the District Court
credited Revel’s “position that the issuance of [a] stay would
present ‘a real and substantial risk that Polo North would
elect not to proceed with closing.’” In re Revel, 525 B.R. at

10
    Polo North, though obviously having an interest in the
outcome, took no significant role in advocating for or against
a stay, and neither the Bankruptcy Court nor the District
Court suggested that denying a stay would harm it, let alone
cause irreparable harm.

                              26
32. As it does on appeal, Revel’s counsel had argued that
even a limited stay would trigger bad things: Polo North
walking away and Revel having to liquidate its assets under
Chapter 7, which “not only would cause the permanent loss of
approximately 4,000 jobs the [Casino] once provided, but
also could cause substantial detriment to the City of Atlantic
City and the surrounding areas, and possibly further hamper
reorganization efforts at other casino resorts located in the
city.” Revel Br. 50.
       In our view, the adequacy of the proof provided plays
an important role “[i]n evaluating the harm that will occur
depending upon whether or not [a] stay is granted.” Mich.
Coal. of Radioactive Material Users, 945 F.2d at 154.
Absent some sort of declaration or other evidence in the
record that a stay would cause substantial harm, the harm to
Revel was at best speculative. Note the context: Revel’s
counsel told the District Court that granting IDEA a stay only
to prevent its lease from being extinguished would
nonetheless spoil the entire sale. 11 On the other hand, if
IDEA lost its lease—a result a stay denial virtually
guaranteed—its business at Revel’s site would be
permanently shuttered. As a result, at the time of our ruling
in February, the balance-of-harms tilted (at least moderately)
in favor of IDEA.

11
      As it turns out, a limited stay didn’t set off the
consequences Revel and Polo North said it would.
Notwithstanding the limited stay we put into place on
February 6, 2015, Revel and Polo North closed two months
later on April 7. See Notice of Sale Closing, In re Revel AC,
Inc., No. 14-22654 (Bankr. D.N.J. Apr. 7, 2015), ECF No.
1553.

                             27
        Does the public interest move the needle? We have
doubts that it moves much. While the public certainly has an
interest in saving jobs and helping Atlantic City’s often
sullied reputation, nothing before us indicates how many jobs
will be brought back of the 4,000 lost, as we were not told
what use Polo North intended for the sold assets. On the
other side, the public has a stake in protecting the rights of
tenants in commercial properties. Furthermore, public policy
strongly favors the correct application of the Bankruptcy
Code, especially where property rights are at stake. Overall,
though the public has an interest in preventing both outcomes,
we ultimately believe the short-term gain of some jobs in a
facility that is operational in some way tilts slightly in Revel’s
favor.
        In any event, our ultimate conclusion need not rest
primarily on a rough estimation of whom the balance of
harms and public interest favor. For, along with IDEA’s
sufficient showing of irreparable harm to it should a stay not
be granted, success to it on the merits was assured. We
explain why below.
           2. Has IDEA made a strong showing of its
              likelihood of success on the merits?

        IDEA makes three arguments before us on the merits,
but we need address only one: whether the Bankruptcy and
District Courts erred in holding that Revel met one of
§ 363(f)’s statutorily enumerated conditions to sell its assets
free and clear. Revel contends they didn’t err because IDEA
twice sought to establish (via declaratory judgment actions)
that it held a non-residential lease and Revel denied that
IDEA had a lease. In Revel’s view, this proves that a bona
fide dispute exists under § 363(f)(4), as “a declaratory
judgment is only proper when an actual ‘case or controversy’
exists.” Revel Br. 34. We disagree yet again.

                               28
       As an initial matter, the mere filing of a declaratory
judgment action doesn’t itself create a bona fide dispute under
§ 363(f)(4), even if Article III’s “case or controversy”
requirement has been met. The latter ensures only that the
declaratory judgment plaintiff has standing and a redressable
injury. Further, that IDEA alleged (and Revel denied) the
former held a non-residential lease doesn’t mean there was a
bona fide dispute as to the validity of its lease. “Bona fide
dispute” in the § 363(f)(4) context means that there is an
objective basis—either in law or fact—to cast doubt on the
validity of IDEA’s purported lease. To satisfy that provision,
Revel needed to show there was some factual or legal basis to
deny that IDEA held a “true lease.” But it did nothing of the
sort.
        First, a review of IDEA’s complaint makes plain that
its principal (and only) purpose was to invoke its rights under
§ 365(h) and “clarify its appurtenant rights for,” among other
things, “a utility easement,” not to litigate the nature of its
interest. Reply Br. 6; see also Oral Arg. Tr. 15:14–15
(counsel for IDEA noting that its suit was meant only to have
the Court “declare and enforce [IDEA’s] [] rights” under §
365(h)). The relevant paragraphs alleged the following:
       125. [O]n or about May 12, 2012, [Revel]
       and IDEA . . . entered into a lease for
       nonresidential real property concerning certain
       premises at the Casino.
       126. On August 28, 2014, [Revel] filed the
       Rejection Motion.
       127. A hearing on the Rejection Motion is
       currently scheduled for October[]7, 2014.

                              29
       128. If the Rejection Motion is granted,
       IDEA will have an opportunity to make an
       election under Section 365(h) of the
       Bankruptcy Code.
       129. Section 365(h) . . . provides a lessee of
       real property under a rejected lease with the
       option of either retaining the estate, including,
       among other things, the continued right to
       possession or to treat the lease as terminated.

       130. To the extent that IDEA elects to remain
       in possession, § 365(h) . . . allows it, despite
       rejection, to continue to enjoy its rights under
       such lease that are in or appurtenant to the real
       property, including the right to continued
       possession, utilities and necessary easements.
      Wherefore, [] IDEA seeks an order and judgment as
follows:
       a. Declaring that, despite rejection of the
          Lease, . . . IDEA may continue to enjoy its
          right under the Lease, including the right
          to continued possession, utility service and
          necessary easements; and

       b. Granting such other relief as is just.
Reply Br. 5–6 (emphasis omitted) (quoting Am. Compl. ¶¶
125–30, IDEA Boardwalk, LLC v. Revel Entm’t Grp., LLC,
No. 14-01756 (Bankr. D.N.J. Sept. 26, 2014), ECF No. 6).
        Moreover, even if IDEA had squarely put the validity
of its lease at issue, nothing Revel said in response created an
objective legal dispute. Revel’s only argument was that its
agreement with IDEA doesn’t qualify as “a true lease”

                               30
because it “provides for ‘rent’ payments based entirely on a
percentage of the revenue derived from [IDEA’s operations]”
and contains “numerous [] examples of provisions atypical of
true leases.” Mot. to Dismiss ¶ 31, IDEA Boardwalk, LLC v.
Revel Entm’t Grp., LLC, No. 14-01756 (Bankr. D.N.J. Oct.
13, 2014), ECF No. 8. Yet Revel failed to cite a single
authority suggesting that a percentage-lease clause
disqualifies a purported lease from being one.
      To leave no doubt that a true lease exists, IDEA’s
agreement with Revel bars any argument to the contrary. It
provides that
      [n]othing contained in this Lease shall be
      deemed or construed as creating the relationship
      of . . . partnership or joint venture between the
      parties hereto, it being understood and agreed
      that neither the method of computing rent,
      payment of the Tenant Fees nor any other
      provision contained herein nor any acts of the
      parties hereto shall be deemed to create any
      relationship between the parties other than that
      of Landlord and Tenant. The provisions of this
      Lease relating to the Percentage Rent payable
      hereunder are included solely for the purpose of
      providing a method whereby adequate rent is to
      be measured and ascertained.
Mot. to Dismiss Ex. A, at 56, IDEA Boardwalk, LLC v. Revel
Entm’t Grp., LLC, No. 14-01756 (Bankr. D.N.J. Oct. 13,
2014) (Section 21.12 of the Lease Agreement), ECF No. 8.
The only conclusion from this is that any dispute regarding
the validity of IDEA’s lease was fanciful if not

                             31
disingenuous. 12 As such, we part ways with the District
Court’s holding that IDEA’s declaratory judgment request
“provides some objective basis, at a minimum,” of a “bona
fide issue in dispute.” In re Revel, 525 B.R. at 29.
       Before we conclude, we would be remiss if we did not
highlight the troubling consequences of Revel’s argument. If
whenever a lessee attempts to invoke its rights under § 365(h)
by asserting as a predicate that it holds a nonresidential lease,

12
      Underscoring this is that, on June 24, 2015, the
Bankruptcy Court, per another Judge, concluded that Revel’s
agreement with IDEA constitutes a “true lease” under New
Jersey law and that § 365(h) protects its right “to remain in
possession for the balance of the terms set forth in the
Agreement[], and any renewal or extension period.” In re
Revel AC, Inc., 532 B.R. 216, 227, 229 (Bankr. D.N.J. 2015).
As to whether the agreement was a true lease, the Court said
the following:

       [Polo North] places before the Court ample case
       law supporting the contention that a court must
       not be swayed by “form over substance” when
       determining the existence of a true lease. While
       this maxim is accurate, at some point form
       becomes substance. We have reached that
       point. The express terms of the Agreement[],
       together with supporting affidavits, make it
       clear that [Revel] and [IDEA] had the
       unequivocal intention of entering into true lease
       agreements.

Id. at 226.

                               32
every debtor would be well advised to file an answer denying
that the lease exists. Revel’s only response is that, by filing a
declaratory judgment action, IDEA is “affirmatively alleging,
subject to Rule 11, that there is a dispute as to that issue,” as
there needs to be “an actual case or controversy” in order to
have a declaratory judgment action. Oral Arg. Tr. 70:10–17.
That argument makes no sense. A declaratory judgment
plaintiff does not fall afoul of Rule 11 by making an
allegation in its complaint that it knows to be true. That rule
comes into play only where a plaintiff files a complaint
without basis in law or fact. Quite the opposite is what we
have here.

 V.    Conclusion
        The factors favoring a stay weigh solidly with IDEA.
First, that it would prevail on the merits was all but assured
because nothing in the record casts doubt on the validity of its
lease with Revel, thus prohibiting the latter from invoking
§ 363(f) and selling its assets free of IDEA’s lease. Second,
IDEA demonstrated that, absent a stay, it would lose its club
business at the Casino, and this was sufficient to show
irreparable harm. On the balancing of harms, perhaps Revel
could have tilted the balance in its favor with its own showing
of irreparable harm, but it didn’t come close, as it relied only
on its counsel’s hollow representations of harm rather than
record evidence. Thus, while the public interest appears to
favor a stay denial, that alone doesn’t tip the four-factor
balance in Revel’s favor. We thus reverse and stay only the
part of the Sale Order that allows Revel to sell the Casino free
and clear of IDEA’s lease.

                               33
SHWARTZ, Circuit Judge, dissenting.

       Mindful of the deference we owe to the District Court
under the applicable standard of review and the test for
obtaining a stay, I part company with the Majority and would
affirm the District Court’s order denying IDEA’s motion for a
stay of the sale order pending appeal.1 First, I disagree with
the Majority’s new interpretation of the requirements for
obtaining a stay. Second, I conclude that the District Court
thoroughly considered the entire record and all of the relevant
factors and acted within its discretion when it held that the
requirements to obtain a stay had not been satisfied. 2

        The Majority’s “sliding scale” approach for obtaining
such equitable relief fails to honor our precedent’s
conjunctive four-part test to obtain a stay and it would permit
relief to be granted upon a particularly strong showing on just
a single factor, apparently even if at least one factor weighs
against the movant. To obtain a stay pending appeal, a
movant must demonstrate all four of the following elements:
(1) that it is likely to succeed on the merits; (2) that
irreparable harm will occur in the absence of a stay; (3) that
granting the stay will not result in greater harm to other
parties; and (4) that the public interest favors a stay. Hilton v.

       1
          As we must limit our review to the District Court’s
decision based on the facts it had before it at the time, I do
not—and cannot—consider events that arose thereafter.
        2
           Additionally, I would reach the issue of our
jurisdiction under 28 U.S.C. § 1292(a)(1) and conclude that
we do have jurisdiction under that statute. See Jackson v.
Danberg, 656 F.3d 157, 163 (3d Cir. 2011) (asserting
appellate jurisdiction over the denial of a stay or injunction).

                                1
Braunskill, 481 U.S. 770, 776 (1987); Jackson v. Danberg,
656 F.3d 157, 162 (3d Cir. 2011); Republic of Phil. v.
Westinghouse Elec. Corp., 949 F.2d 653, 658 (3d Cir. 1991).
Notwithstanding whatever extent to which these factors may
be “balanced” against one another such that a relatively
stronger showing on one may excuse a relatively weaker, but
still extant, showing on another, a complete failure to satisfy
any one of these factors precludes a stay. 3 See, e.g.,
NutraSweet Co. v. Vit-Mar Enters. Inc., 176 F.3d 151, 153

      3
         The Majority suggests that this Court has endorsed a
sliding scale approach in Constructors Association of Western
Pennsylvania v. Kreps, 573 F.2d 811 (3d Cir. 1978) and
Delaware River Port Authority v. Transamerican Trailer
Transport, Inc., 501 F.2d 917 (3d Cir. 1974). As noted in the
text, however, this Court has repeatedly emphasized that all
four factors must be independently satisfied to justify the
grant of preliminary equitable relief, and the Supreme Court
has presented the four-factor test as conjunctive, meaning that
all four factors must be satisfied to obtain a stay. See, e.g.,
Hilton, 481 U.S. at 776. Further, even to the extent that these
cases can be read to embrace a “sliding scale” or “balancing”
approach (which I do not necessarily view as equivalent),
neither states or implies that a movant’s complete failure to
satisfy any of the four factors can be excused. See Kreps, 573
F.2d at 815 (suggesting an injunction might be appropriate
even where the movant “did not demonstrate as strong a
likelihood of ultimate success as would generally be
required” if each of the other factors “strongly favor[s] the
moving party” (emphasis added)). In my view, an essential
prerequisite to “balancing” the factors is the requirement that
proof of each factor be presented and hence can be placed on
the scale.

                              2
(3d Cir. 1999) (“A plaintiff’s failure to establish any element
in its favor renders a preliminary injunction inappropriate.”);
Opticians Ass’n of Am. v. Indep. Opticians of Am., 920 F.2d
187, 192 (3d Cir. 1990) (“Only if the movant produces
evidence sufficient to convince the trial judge that all four
factors favor preliminary relief should the injunction issue.”);
ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987)
(vacating preliminary injunction based on “dispositive”
failure to satisfy one of the four factors).

        Contrary to the Majority’s assertion, requiring a
movant to satisfy each factor is not unfair. Indeed, it is
warranted. Equitable relief, including injunctions and stays,
is an extraordinary remedy, Winter v. Natural Res. Def.
Council, Inc., 555 U.S. 7, 24 (2008), and movants must
accordingly meet a high bar to obtain it. Here, that means the
movant must satisfy all four requirements to obtain a stay.
See N.J. Hosp. Ass’n v. Waldman, 73 F.3d 509, 512-13 (3d
Cir. 1995) (stating that an “injunction shall issue only if the
plaintiff produces sufficient evidence to convince the district
court that all four factors favor preliminary relief” (quoting
Merchant & Evans, Inc. v. Roosevelt Bldg. Prods., 963 F.2d
628, 632-33 (3d Cir. 1992)). The Majority’s test weakens this
conjunctive test and makes it possible to, for example, obtain
a stay or injunction simply because a party has made a strong
showing on the merits, even though the harm that may befall
it is compensable with money. This possibility is contrary to
our precedent, which also requires an applicant seeking
injunctive relief to show irreparable harm. Frank’s GMC
Truck Center, Inc. v. Gen. Motors Corp., 847 F.2d 100, 102
& n.3 (3d Cir. 1987). Thus, the Majority’s approach makes it
more likely that what should be an extraordinary remedy will

                               3
be afforded on a more ordinary basis. 4 For these reasons, we
should not adopt the Majority’s version of the sliding scale
approach insofar as it excuses total failure to satisfy any one
of the four factors, and we should continue to apply the four-
factor test entrenched in binding precedent. If proof of each
factor is adduced, then a district court can and should
carefully consider each factor, accord each the weight it
believes appropriate in the particular case, and determine
whether, on balance, the extraordinary relief sought should be
granted.

        That is exactly what the District Court did here. The
District Court carefully considered each of the factors and did
not abuse its discretion in determining that none were
satisfied. First, the District Court astutely acknowledged that
if the sale proceeded, IDEA would be no worse off than it
was at the time it made its request for relief. It was not
clearly erroneous for the District Court to find, based on the
facts before it, that IDEA was not conducting any business
because Revel was closed, and that IDEA would be unable to
conduct business if the sale fell through and Revel remained
closed.5 It also was not clearly erroneous for the District
Court to surmise that IDEA would likely not reopen its
business if the sale proceeded, and thus that allowing the sale
to proceed would cause it no additional harm. Moreover, any

       4
         In fact, in this case, the Majority granted a stay even
though it concluded that the public interest factor favored the
non-movant, and thus the four-factor test was not met.
       5
          The analysis might be different if the facility was
accessible and the lessee was operating, in which case a sale
free and clear of its interest could disrupt its business. This,
however, is not the case here.

                               4
injury to IDEA would be compensable with money. 6 While
collection may prove challenging, this hurdle is no different
from that facing any other unsecured creditor.

       Second, it was not clearly erroneous for the District
Court to conclude that staying the sale would likely cause
greater harm to others, including the estate and other
creditors. Each month without a sale generated millions of
dollars in carrying costs to maintain the closed facility. These
expenditures depleted Revel’s assets and the District Court
correctly observed that a prompt sale would end these
expenditures.      Moreover, the sale would provide an
immediate opportunity to obtain assets for the estate, which it
could then use to begin to repay its creditors. Thus, it was
reasonable for the District Court to conclude that a prompt
sale would both preserve existing and generate additional
estate assets, whereas staying the sale would continue to
dissipate estate funds and, at a minimum, delay the collection
of additional assets. Given Revel’s substantial challenges in
finding a prospective buyer, it was far from idle speculation
for Revel to fear that the loss of this buyer would significantly
delay its ability to satisfy its creditors. For these reasons, the
District Court acted within its discretion in denying the stay,

       6
          I recognize that, in exceptional circumstances,
economic loss that threatens a movant’s business can
constitute irreparable harm sufficient to enjoin an action that
poses such a threat, Minard Run Oil Co. v. U.S. Forest Serv.,
670 F.3d 236, 255 (3d Cir. 2012), but no evidence was
presented to show that the sale will cause such a loss. This is
not surprising because it was Revel’s closing, and not its sale,
that caused IDEA’s inability to operate.

                                5
as a stay would likely cause greater harm to others than the
absence of a stay would cause IDEA. 7

        Third, the District Court had a sound basis to conclude
that granting the stay would not be in the public interest. As
stated above, Revel faced difficulties securing a buyer, and
having one in hand would certainly serve the public interest.
At the time, it appeared that allowing the sale to proceed
quickly would lead to the reopening of a large facility, which
had employed (and would likely again employ) thousands of
people. Thus, as even the Majority concedes, the sale
presented the opportunity for numerous jobs in an
economically depressed community. The District Court thus
did not err in finding that denying the stay is in the public
interest.

       Finally, although the preceding analysis makes it
unnecessary to reach this factor, I would hold that the District
Court also appropriately concluded that IDEA did not
demonstrate a strong likelihood of success on the merits,
notwithstanding the Majority’s assertion that success on the
merits was “all but assured.” Since the Majority has focused
only on IDEA’s argument that the Bankruptcy Court erred in

       7
          Moreover, granting IDEA a stay would allow it to
interfere with the orderly collection and distribution of assets
and impact other creditors. IDEA is an unsecured creditor
and, in the normal course, would have to await satisfaction of
obligations to the secured creditors before it could be
compensated. The stay would enable IDEA to catapult ahead
of all other creditors, and place itself in a position to demand
satisfaction before them.

                               6
holding that Revel met one of 11 U.S.C. § 363(f)’s conditions
to sell its assets free and clear of IDEA’s lease, I will likewise
focus on this issue.

        Under 11 U.S.C. § 363(e), an entity with “an interest
in property” that is proposed to be sold can request the
bankruptcy court to “prohibit or condition such . . . sale . . . as
is necessary to provide adequate protection of such interest.”
11 U.S.C. § 363(e). The trustee, however, may sell the
property “free and clear” if, among other things, “such
interest is in bona fide dispute.” 11 U.S.C. § 363(f)(4). The
issue before the District Court was whether the record before
it supported a finding that there was a bona fide dispute about
whether IDEA had a leasehold interest in the space it
occupied at Revel.

        The Majority discounts the propriety of relying on
IDEA’s request for a declaratory judgment that it had a
nonresidential lease as reflecting a bona fide dispute. While
requesting a declaratory judgment alone does not
automatically mean a bona fide dispute exists, the District
Court here acted within its discretion to find a bona fide
dispute existed based on the pleadings and the declaratory
judgment IDEA sought. A declaratory judgment action asks
a court to “declare the rights and other legal relations of any
interested party seeking such declaration, whether or not
further relief is or could be sought.” 28 U.S.C. § 2201(a).
When determining whether to exercise jurisdiction under §
2201, a district court is to consider, among other things, “the
likelihood that a federal court declaration will resolve the
uncertainty of obligation which gave rise to the controversy.”
Reifer v. Westport Ins. Corp., 751 F.3d 129, 140 (3d Cir.
2014) (internal quotation marks omitted). Thus, it is fair to

                                7
infer that, if a party seeks a declaratory judgment, it believes
there is a dispute about a matter regarding which it seeks
certainty. Here, IDEA wanted to secure relief under § 363(e).
To do so, it needed a property interest. Aware that Revel may
attempt to characterize IDEA’s interest as a management
agreement or partnership rather than a leasehold interest, it
sought court intervention. These events provided the District
Court with sufficient grounds to find that there was a strong
likelihood that Revel would establish that there was a bona
fide dispute about IDEA’s interest in the property. While the
Majority questions whether the dispute was indeed bona fide
based upon the language of the lease agreement (and the
Bankruptcy Court’s finding months later concerning the
lease), I cannot say that the District Court abused its
discretion in relying on IDEA’s own pleadings, which
arguably conveyed its concern that Revel may dispute its
interest.8

       For these reasons, the District Court appropriately
found that IDEA failed to satisfy any of the requirements
needed to obtain a stay, and I would affirm the District
Court’s order denying the motion to stay the sale pending
appeal.

       8
        The Majority also notes that the Bankruptcy Court
did not make explicit findings concerning the conditions
needed to adequately protect IDEA’s possessory interest.
Even assuming that its analysis lacked precision, this alone
does not mean that the District Court abused its discretion in
denying the stay.

                               8