Court Opinion

ID: 4465858
Source: CourtListenerOpinion
Date Created: 2019-12-19 18:00:17.942733+00
Date Added: 2024-06-11T14:53:20.417657
License: Public Domain

PRECEDENTIAL
      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT
                _____________

                    No. 18-3210
                   _____________

 In re MILLENNIUM LAB HOLDINGS II, LLC., et al.,
                               Debtors

                OPT-OUT LENDERS,
                                       Appellant
                  _______________

    On Appeal from the United States District Court
            for the District of Delaware
              (D.C. No. 1-17-cv-01461)
          District Judge: Leonard P. Stark
                 _______________

                      Argued
                 September 12, 2019

Before: CHAGARES, JORDAN, and RESTREPO, Circuit
                    Judges.

              (Filed December 19, 2019)
                  _______________
Maya Ginsburg
Thomas E. Redburn, Jr. [ARGUED]
Sheila A. Sadighi
Lowenstein Sandler
One Lowenstein Drive
Roseland, NJ 07068

L. Katherine Good
Aaron H. Stulman
Christopher M. Samis
Potter Anderson & Corroon
1313 N. Market Street
Hercules Plaza, 6th Fl.
P.O. Box 951
Wilmington, DE 19801
      Counsel for Appellant

John C. O’Quinn [ARGUED]
Jason M. Wilcox
Kirkland & Ellis
1301 Pennsylvania Avenue, N.W.
Washington, DC 20004
      Counsel for Appellee James Slattery

Derek C. Abbott
Joseph C. Barsalona, II
Andrew R. Remming
Morris Nichols Arsht & Tunnell
1201 Market Street – 16th Fl.
P.O. Box 1347
Wilmington, DE 19801

                              2
Gregory W. Fox
Michael H. Goldstein
William P. Weintraub
Goodwin Procter
620 Eighth Avenue
The New York Times Building
New York, NY 10018
      Counsel for Appellee TA Millennium Inc.

Ryan M. Bartley
Pauline K. Morgan
Michael R. Nestor
Young Conaway Stargatt & Taylor
1000 N. King Street
Wilmington, DE 19801

Richard P. Bress
Latham & Watkins
555 11th Street, N.W. – Ste. 1000
Washington, DC 20004

Amy C. Quartarolo
Michael J. Reiss
Latham & Watkins
355 S. Grand Avenue – Ste. 100
Los Angeles, CA 90071
      Counsel for Debtor
                    _______________

                OPINION OF THE COURT
                    _______________

                              3
JORDAN, Circuit Judge.

        We are asked whether the Bankruptcy Court, without
running afoul of Article III of the Constitution, can confirm a
Chapter 11 reorganization plan containing nonconsensual
third-party releases and injunctions.        On the specific,
exceptional facts of this case, we hold that the Bankruptcy
Court was permitted to confirm the plan because the existence
of the releases and injunctions was “integral to the
restructuring of the debtor-creditor relationship.” Stern v.
Marshall, 564 U.S. 462, 497 (2011) (internal quotation marks
and citation omitted). We further conclude that the remainder
of this appeal is equitably moot, and we will therefore affirm
the decision of the District Court.

I.     BACKGROUND

       The debtors before the Bankruptcy Court and District
Court were Millennium Lab Holdings II, LLC (“Holdings”),
its wholly-owned subsidiary, Millennium Health LLC, and
RxAnte, LLC, a wholly-owned subsidiary of Millennium
Health LLC, all of which we will refer to collectively as
“Millennium.” Millennium (as reorganized), along with
certain of its direct and indirect pre-reorganization
shareholders, specifically TA Millennium, Inc. (“TA”), TA
Associates Management, L.P., and James Slattery,1 are the
Appellees in this matter.

       1
        Slattery was the founder of Millennium, has served in
high-level positions in the company, and established trusts “for
the benefit of himself and/or members of his family [and
which] own approximately 79.896 percent of the stock of

                               4
       Millennium provides laboratory-based diagnostic
services. In April 2014, it entered into a $1.825 billion credit
agreement with a variety of lenders, including a variety of
funds and accounts managed by Voya Investment Management
Co. LLC and Voya Alternative Asset Management LLC
which, for convenience, we will refer to collectively as
“Voya.” Ultimately, Millennium used the proceeds from the
2014 credit agreement to refinance certain of its then-existing
financial obligations and to pay a nearly $1.3 billion special
dividend to its shareholders.

        In March 2015, following a several-year investigation
that dated back to at least 2012, the U.S. Department of Justice
(“DOJ”) filed a complaint in the United States District Court
for the District of Massachusetts against Millennium, alleging
violations of various laws, including the False Claims Act.
Less than a month earlier, the Center for Medicare and
Medicaid Services (“CMS”) had notified Millennium that it
would be revoking Millennium’s Medicare billing privileges,
the lifeblood of Millennium’s business. In May 2015,
Millennium reached an agreement in principle with the DOJ,
CMS, and other government entities to pay $256 million to
settle various claims against it.

        Shortly thereafter, however, Millennium concluded that
it lacked adequate liquidity to both service its debt obligations
under the 2014 credit agreement and make the required
settlement payment to the government. Millennium thus
informed the 2014 credit agreement lenders of the
government’s claims and the decision to settle, prompting the

[Millennium Lab Holdings, Inc.][,]” a substantial pre-
reorganization shareholder of Millennium. (App. at 981.)

                               5
formation of an ad hoc group of lenders, of which Voya was a
member, to begin working with Millennium and its primary
shareholders, TA and Millennium Lab Holdings, Inc.
(“MLH”), to negotiate a transaction that would allow the
company to satisfy the settlement requirements and restructure
its financial obligations. As those negotiations progressed, the
ad hoc group began suggesting that there were potential claims
against MLH and TA relating to the 2014 credit agreement,
including a lack of disclosure regarding the government’s
investigation into Millennium’s business. Millennium, MLH,
TA, and the ad hoc group began discussing how to resolve
those potential claims.

       While negotiating with the ad hoc group, Millennium
informed the government that it could not pay the $256 million
settlement without restructuring its other financial obligations.
The government ultimately set a deadline of October 2, 2015,
“by which the Company was required to finalize a proposal
supported by the prepetition lenders and the Equity Holders[.]”
(App. at 2231.) That deadline was later pushed to October 16
in exchange for, among other things, a $50 million settlement
deposit to be paid for by Millennium and guaranteed by MLH
and TA.

       On October 15, 2015, Millennium, its equity holders,
and the ad hoc group – Voya excepted – entered into a
restructuring support agreement (the “Restructuring
Agreement” or “Agreement”), which provided for either an
out-of-court restructuring or a Chapter 11 reorganization of
Millennium’s business. Under the Agreement, MLH and TA
agreed to pay $325 million, which would be used to reimburse
Millennium for the $50 million settlement deposit, pay the
remainder of the $256 million settlement, and cover certain of

                               6
Millennium’s fees, costs, and working capital requirements.
The Agreement also required Millennium’s equity holders,
including MLH and TA, to transfer 100% of the equity
interests in Millennium to the company’s lenders. Voya would
receive its share of equity in the deal. In exchange, MLH, TA,
and various others were to “receive full releases” for
themselves and related parties regarding all claims arising from
conduct that occurred before the Restructuring Agreement,
including anything related to the 2014 credit agreement, and,
in the case of a Chapter 11 reorganization, those individuals
and entities covered by the Restructuring Agreement were to
“be subject to a bar order, an injunction and related protective
provisions” to enforce the releases. (App. at 518.) As a result
of the Restructuring Agreement, Millennium was able to enter
a final settlement with the government on October 16, 2015,
which required payment of the settlement deposit in October
and payment of the remainder of the settlement by
December 30, 2015.

       The Restructuring Agreement was reached only after
intensive negotiations. Indeed, the negotiations were described
by participants as “highly adversarial[,]” “extremely
complicated[,]” and at “arm’s-length,” and in those
negotiations “the parties all were represented by sophisticated
and experienced professionals.” (App. at 2229-30.) MLH and
TA rejected the ad hoc group’s suggestion of potential claims
against them.        “[P]rior to substantive negotiations
commencing, it did not appear that [MLH and TA] had
signaled a willingness to pay even any portion of the
proposed … settlement.” (App. at 2230.) Rather, they were
only “willing to consider a tender of their equity ownership of
the Company in exchange for broad general releases[.]” (App.
at 2230.)

                               7
       From at least mid-August 2015, negotiations took place
“on an almost daily basis[.]” (App. at 2231.) Before
September 30, however, and despite “extensive negotiations
between the Equity Holders and the Ad Hoc Group during the
prior months, the Equity Holders’ last and ‘best’ offer was, in
addition to turning over the Company’s equity to the Lenders,
$275 million[,] and the Ad Hoc Group … had demanded a
$375 million contribution[.]” (App. at 2232-33.)

       The impasse was broken during the negotiation session
that occurred on September 30. That session was viewed as
“do or die” for Millennium and as having “decisive
implications for the lenders and the equity” because, if the
October 2 deadline was not met, the government would revoke
Millennium’s Medicare billing privileges. (App. at 2231-32.)
In the last event, MLH and TA increased their offer to $325
million, and the ad hoc group of lenders agreed to the revised
terms. According to an individual involved in the negotiations,
that deal – later embodied in the Agreement – was “the best
possible deal achievable” and left nothing else “on the table[.]”
(App. at 2233.)

       The release provisions MLH and TA obtained in
exchange for their contribution, were, in short, “heavily
negotiated among the Debtors, the Equity Holders and the Ad
Hoc Group” and necessary to the entire agreed resolution.
(App. at 2234.) They “were specifically demanded by the
Equity Holders as a condition to making the[ir] contribution”
and, without them, MLH and TA “would not have agreed” to
the settlement. (App. at 2234.) The contribution was, of
course, also necessary to induce the lenders’ support of the
Agreement. Thus, as stated by both the Bankruptcy Court and

                               8
District Court after careful fact finding, the deal to avoid
corporate destruction would not have been possible without the
third-party releases.

       After entering into the Restructuring Agreement, the
parties thereto initially sought to reorganize Millennium out of
court, and “over 93% of the Prepetition Lenders by value”
agreed to do so. (App. at 1205.) That, however, was not
enough. Voya held out, and Millennium filed its petition for
bankruptcy in November 2015. It submitted to the Bankruptcy
Court a “Prepackaged Joint Plan of Reorganization of
Millennium Lab Holdings II, LLC, et al.” that reflected the
terms of the Restructuring Agreement.2 (App. at 407.) The
plan contained broad releases, including ones that would bind
non-consenting lenders such as Voya, in favor of Millennium,
MLH, and TA, among others. Those releases specifically
covered any claims “arising out of, or in any way related to in
any manner,” the 2014 credit agreement. (App. at 416.) To
enforce the releases, the plan also provided for a bar order and
an injunction prohibiting those bound by the releases from
commencing or prosecuting any actions with respect to the
claims released under the plan.

         Voya objected to confirmation of the plan.3 It explained
that it intended to assert claims against MLH and TA for what
it said were material misrepresentations made in connection

       2
        The plan was later amended to eliminate a disputed
provision that is not at issue in this appeal.
       3
         The United States Trustee objected as well. Those
objections are not at issue on appeal.

                               9
with the 2014 credit agreement. In Voya’s view, at the time of
the credit agreement, Millennium knew of the legal scrutiny it
was under by the government but made “affirmative
representations … which specifically indicated that there was
no investigation pending that could result in a material adverse
situation[,]” and Millennium further represented that it was not
doing anything potentially illegal. (App. at 1309.) Voya thus
asserted that it had significant legal claims against Millennium
and Millennium’s equity holders, that the releases of the equity
holders were unlawful, and that the Bankruptcy Court lacked
subject matter jurisdiction to approve them.

        The Bankruptcy Court overruled Voya’s objections and
confirmed the plan on December 14, 2015.4 Voya then
appealed to the District Court, arguing, among other things,
that the Bankruptcy Court lacked the constitutional authority
to order the releases and injunctions. In response, the
Appellees, all of whom are named as released parties in the
confirmed plan, moved to dismiss, pressing especially that the
case is equitably moot. The District Court, however, remanded
the case for the Bankruptcy Court to consider whether it – the
Bankruptcy Court – had constitutional authority to confirm a
plan releasing Voya’s claims, in light of the Supreme Court’s
decision in Stern v. Marshall, 564 U.S. 462 (2011).

       4
         A few days earlier, on December 9, 2015, Voya had
filed suit against TA, MLH, and various affiliates in the
District Court asserting RICO, RICO conspiracy, fraud and
deceit, aiding and abetting fraud, conspiracy to commit fraud,
and restitution claims. That case has been stayed pending the
present litigation. ISL Loan Tr. v. TA Assocs. Mgmt., L.P., No.
15-cv-1138 (D. Del.) (D.I. 11).

                              10
        On remand, the Bankruptcy Court wrote a detailed and
closely reasoned opinion explaining its conclusion that it had
constitutional authority. It said that Stern is inapplicable when,
as in this instance, the proceeding at issue is plan confirmation,
and that, even if Stern did apply, the limitations imposed by
that precedent would be satisfied. Voya appealed and the
Appellees moved again to dismiss the matter as equitably
moot.

       The District Court, in an equally thoughtful opinion,
affirmed the Bankruptcy Court’s ruling on constitutional
authority, reasoning, in relevant part, that Stern is inapplicable
to plan confirmation proceedings. The Court then dismissed
the remainder of Voya’s challenges as equitably moot because
the releases and related provisions were central to the
reorganization plan and excising them would unravel the plan,
and because it would be inequitable to allow Voya to benefit
from the restructuring while also pursuing claims that MLH
and TA had paid to settle. Finally, in the alternative, the
District Court reasoned that, even if the Bankruptcy Court
lacked constitutional authority to confirm the plan, and even if
the appeal were not equitably moot, the District Court itself
would affirm the confirmation order by rejecting Voya’s
challenges on the merits.

       This timely appeal followed.

                               11
II.    DISCUSSION5

        The Parties press a number of arguments, but we need
only address two: first, whether the Bankruptcy Court had
constitutional authority to confirm the plan releasing and
enjoining Voya’s claims against MLH and TA; and second,
whether this appeal, including Voya’s arguments that the
release provisions violate the Bankruptcy Code, is otherwise
equitably moot. Because the answer to both of those questions
is yes, we will affirm.

       5
         While the Bankruptcy Court’s authority is at issue, it
had jurisdiction to consider this dispute pursuant to 28 U.S.C.
§§ 157, 1334. The District Court had jurisdiction under 28
U.S.C. §§ 158(a), 1334, and we have jurisdiction under 28
U.S.C. §§ 158(d), 1291. U.S. Tr. v. Gryphon at Stone Mansion,
Inc., 166 F.3d 552, 553 (3d Cir. 1999); In re Semcrude, L.P.,
728 F.3d 314, 320 (3d Cir. 2013). “In reviewing the
Bankruptcy Court’s determinations, we exercise the same
standard of review as did the District Court. We therefore
review the Bankruptcy Court’s legal determinations de novo
and … its factual determinations for clear error.” In re
Wettach, 811 F.3d 99, 104 (3d Cir. 2016) (citations and internal
quotation marks omitted). “We review the [District] Court’s
equitable mootness determination for abuse of discretion.” In
re Semcrude, 728 F.3d at 320.

                              12
       A.     The Bankruptcy Court Possessed the
              Constitutional Authority to Confirm the Plan
              Containing the Release Provisions

       Voya’s primary argument is that, under the reasoning of
Stern v. Marshall, the Bankruptcy Court lacked the
constitutional authority to confirm a plan releasing its
claims.6 To explain why we disagree, we first consider the
reach of Stern and then how the decision applies here.

              i. The Reasoning and Reach of Stern v.
                 Marshall

      In Stern, the son of a deceased oil magnate filed an
adversary complaint in bankruptcy court against his
stepmother for defamation and also “filed a proof of claim for
the defamation action, meaning that he sought to recover
damages for it from [the] bankruptcy estate.”7 564 U.S. at 470.

       6
         The parties also contest whether the constitutionality
of the Bankruptcy Court’s decision is a threshold issue that
must be decided before assessing equitable mootness. Since
we conclude that the Bankruptcy Court possessed
constitutional authority, we need not decide whether there is a
set order of operations.
       7
         Both the litigation culminating in the Supreme Court’s
Stern decision, and the Stern decision itself, received
significant public attention based on the litigants’ identities.
The stepmother was the late Vickie Lynn Marshall, widely
known as Anna Nicole Smith. The stepson was the late E.
Pierce Marshall, son of the deceased oil magnate, J. Howard
Marshall II.

                              13
The dispute was part of a long running battle over the oil
magnate’s estate, and the stepmother – who was the debtor in
bankruptcy – responded to the defamation claim by asserting
truth as a defense and filing her own counterclaim for tortiously
interfering with a gift (i.e., a trust of which she would be the
beneficiary) that she had expected to receive from her late
husband. Id. The bankruptcy court granted summary
judgment for the stepmother on the defamation claim and then,
after a bench trial, ruled in her favor on the tortious interference
counterclaim. Id.

       The main issue before the Supreme Court was whether
the bankruptcy court had the authority to adjudicate the
counterclaim. The Court first decided that the bankruptcy
court was statutorily authorized to do so. Id. at 475-78. It said
that bankruptcy courts may hear and enter final judgments in
what the bankruptcy code frames as “core proceedings,” and
the Court further ruled that the counterclaim was such a
proceeding because, under 28 U.S.C. § 157(b)(2)(C), “core
proceedings include ‘counterclaims by the [bankruptcy] estate
against persons filing claims against the estate.’” Stern, 564
U.S. at 475.

        Nevertheless, the Supreme Court concluded that the
bankruptcy court’s actions violated Article III of the U.S.
Constitution. Id. at 482. Quoting Northern Pipeline
Construction Company v. Marathon Pipe Line Company, 458
U.S. 50, 90 (1982) (Rehnquist, J., concurring in judgment), the
Court reasoned that, “[w]hen a suit is made of ‘the stuff of the
traditional actions at common law tried by the courts at
Westminster in 1789,’ and is brought within the bounds of
federal jurisdiction, the responsibility for deciding that suit
rests with Article III judges in Article III courts.” Stern, 564
14
U.S. at 484. The bankruptcy court had gone beyond
constitutional limits when it “exercised the ‘judicial Power of
the United States’ in purporting to resolve and enter final
judgment on a state common law claim[.]” Id. at 487.

        The Supreme Court went on to explain that the
counterclaim also not did fall within the “public rights”
exception to the exercise of judicial power contemplated by
Article III. Under the public rights exception, Congress may
constitutionally allocate to “legislative” – i.e., non-Article III –
courts the authority to resolve disputes that arise “in connection
with the performance of the constitutional functions of the
executive or legislative departments[.]” Id. at 489 (citation
omitted). Although acknowledging that the exception is not
well defined, the Court explained that it is generally limited to
“cases in which the claim at issue derives from a federal
regulatory scheme, or in which resolution of the claim by an
expert Government agency is deemed essential to a limited
regulatory objective within the agency’s authority.” Id. at 490.
The Court had little difficulty concluding that the stepmother’s
counterclaim, which arose “under state common law between
two private parties,” and, at best, had a highly tenuous
connection to federal law, did not “fall within any of the varied
formulations of the public rights exception[.]” Id. at 493. But
the Court made clear that it had never decided and was not then
deciding whether “the restructuring of debtor-creditor relations
is in fact a public right.” Id. at 492 n.7 (citation omitted).

       The Supreme Court also rejected the stepmother’s
argument that her counterclaim could be decided in bankruptcy
court because the stepson had filed a proof of claim. Id. at 495.
In doing so, though, the Court interpreted two of its previous
opinions as concluding that matters arising in the claims-

                                15
approval process could be adjudicated by a bankruptcy court.
Id. at 495-97. The Court said that Katchen v. Landy, 382 U.S.
323 (1966), stood for the proposition that a “voidable
preference claim” could be decided by a bankruptcy
adjudicator “because it was not possible for the [adjudicator]
to rule on the creditor’s proof of claim without first resolving
the voidable preference issue.” Stern, 564 U.S. at 496. It
further observed that its decision in Langenkamp v. Culp, 498
U.S. 42 (1990) (per curiam), was “to the same effect” and had
concluded “that a preferential transfer claim can be heard in
bankruptcy when the allegedly favored creditor has filed a
claim, because then [i.e., after the creditor’s claim has been
filed,] ‘the ensuing preference action by the trustee become[s]
integral to the restructuring of the debtor-creditor
relationship.’” Stern, 564 U.S. at 497 (second alteration in
original) (citation omitted). The Court distinguished that
situation from the dispute before it in Stern because there was
little overlap between the debtor-stepmother’s tortious
interference counterclaim and the creditor-stepson’s
defamation claim and “there was never any reason to believe
that the process of adjudicating [the] proof of claim would
necessarily resolve [the] counterclaim.” Id. Finally, it
explained that, “[i]n both Katchen and Langenkamp, … the
trustee bringing the preference action was asserting a right of
recovery created by federal bankruptcy law[,]” but the
stepmother’s counterclaim was “in no way derived from or
dependent upon bankruptcy law; it [was] a state tort action that
exist[ed] without regard to any bankruptcy proceeding.” Id. at
498-99. The Court concluded by saying “that Congress may
not bypass Article III simply because a proceeding may have
some bearing on a bankruptcy case[.]” Id. at 499. In language
central to the issue before us, the Court said, “the question is
whether the action at issue stems from the bankruptcy itself or

                              16
would necessarily be resolved in the claims allowance
process.” Id.

        Stern makes several points that are important here.
First, bankruptcy courts may violate Article III even while
acting within their statutory authority in “core” matters. Cf.
Exec. Benefits Ins. Agency v. Arkison, 573 U.S. 25, 30-31
(2014) (describing “Stern claims” as “claim[s] designated for
final adjudication in the bankruptcy court as a statutory matter,
but prohibited from proceeding in that way as a constitutional
matter”). Thus, even in cases in which a bankruptcy court
exercises its “core” statutory authority, it may be necessary to
consider whether that exercise of authority comports with the
Constitution.

        Second, a bankruptcy court is within constitutional
bounds when it resolves a matter that is integral to the
restructuring of the debtor-creditor relationship. The Stern
Court relied on Katchen and Langenkamp as examples of a
bankruptcy court’s constitutionally appropriate adjudication of
claims. Of particular note, and as quoted earlier, the Court in
discussing Langenkamp said that it held there that a particular
“claim can be heard in bankruptcy when the … creditor has
filed a claim, because then ‘the ensuing preference action by
the trustee become[s] integral to the restructuring of the debtor-
creditor relationship.’” Stern, 564 U.S. at 497 (alteration in
original) (citation omitted). In other words, the Court
concluded that bankruptcy courts can constitutionally decide
matters arising in the claims-allowance process, and they can
do that because matters arising in the claims-allowance process
are integral to the restructuring of the debtor-creditor

                               17
relationship.8   Id. at 492 n.7, 497 (citations omitted).
Furthermore, the Supreme Court made it clear that, for there to
be constitutional authority, a matter need not stem from the
bankruptcy itself. That is evident from its declaration of a two-
part disjunctive test. The Court said that “the question
[governing the extent to which a bankruptcy court may

       8
         Again, and as noted on page 15 supra, we recognize
that the Supreme Court declined to determine whether, as a
general matter, “restructuring of debtor-creditor relations is in
fact a public right.” Stern, 564 U.S. at 492 n.7 (citation
omitted). Thus, the Court’s conclusion that bankruptcy courts
can decide matters integral to the restructuring of debtor-
creditor relations may not have been grounded in public rights
doctrine. Indeed, Chief Justice Roberts, the author of Stern,
has suggested as much. Cf. Wellness Int’l Network, Ltd. v.
Sharif, 135 S. Ct. 1932, 1951 (2015) (Roberts, C.J., dissenting)
(“Our precedents have also recognized an exception to the
requirements of Article III for certain bankruptcy proceedings.
When the Framers gathered to draft the Constitution, English
statutes had long empowered nonjudicial bankruptcy
‘commissioners’ to collect a debtor’s property, resolve claims
by creditors, order the distribution of assets in the estate, and
ultimately discharge the debts. This historical practice,
combined with Congress’s constitutional authority to enact
bankruptcy laws, confirms that Congress may assign to non-
Article III courts adjudications involving ‘the restructuring of
debtor-creditor relations, which is at the core of the federal
bankruptcy power.’” (internal citations omitted)). We need not
identify the theory behind the Supreme Court’s conclusion,
however, because, regardless, “we are bound to follow [the
Court’s] teachings [.]” St. Margaret Mem’l Hosp. v. NLRB,
991 F.2d 1146, 1154 (3d Cir. 1993).

                               18
constitutionally exercise power] is whether the action at issue
stems from the bankruptcy itself or would necessarily be
resolved in the claims allowance process.” Id. at 499
(emphasis added).

       The third take-away from Stern is that, when
determining whether a bankruptcy court has acted within its
constitutional authority, courts should generally focus not on
the category of the “core” proceeding but rather on the content
of the proceeding. The Stern Court never said that all
counterclaims by a debtor are beyond the reach of bankruptcy
courts. Rather, it explained that those that do not “stem[] from
the bankruptcy itself or would [not] necessarily be resolved in
the claims allowance process” (and therefore would not be
integral to the restructuring of the debtor-creditor relationship)
must be decided by Article III courts. Id. at 497, 499. And,
the Court looked to the content of the debtor’s counterclaim in
applying that test. It compared the factual and legal
determinations necessary to resolve the tortious interference
counterclaim to those necessary to resolve the defamation
claim to assess whether the counterclaim would necessarily be
resolved in the claims-allowance process, and it looked to the
basis for the counterclaim to determine whether it stemmed
from the bankruptcy itself.9 Id. at 498-99.

       9
         To be sure, the Supreme Court made clear that the
claims-allowance process – a core proceeding under 28 U.S.C.
§ 157(b)(2)(B) – is per se integral to the restructuring of the
debtor-creditor relationship and, therefore, that the category of
proceeding is controlling in that context. Stern, 564 U.S. at
497-99. But we have no guidance as to whether any other
categories of core proceedings might be treated similarly.

                               19
        In sum, Stern teaches that the exercise of “core”
statutory authority by a bankruptcy court can implicate the
limits imposed by Article III. Such an exercise of authority is
permissible if it involves a matter integral to the restructuring
of the debtor-creditor relationship. And, in determining
whether that is the case, we can consider the content of the
“core” proceeding at issue.

              ii.     The     Bankruptcy      Court    Had
                      Constitutional Authority Under Stern

       Applying the foregoing principles to the case at hand
leads to the conclusion that the Bankruptcy Court possessed
constitutional authority to confirm the plan containing the
release provisions. The Bankruptcy Court indisputably had
“core” statutory authority to confirm the plan. See 28 U.S.C.
§ 157(b)(2)(L) (“Core proceedings include, but are not limited
to …[,] confirmations of plans[.]”). The question is whether,
looking to the content of the plan, the Bankruptcy Court was
resolving a matter integral to the restructuring of the debtor-
creditor relationship.10 The only terms at issue are the
provisions releasing and enjoining Voya’s claims.

       Those provisions were thoroughly and thoughtfully
addressed by the Bankruptcy Court. It held that “[t]he
injunctions and releases provisions are critical to the success of
the Plan” because, “[w]ithout the releases, and the enforcement
of such releases through the Plan’s injunction provisions, the

       10
          The Appellees argue that a bankruptcy court can
always constitutionally confirm a plan. We have our doubts
about so broad a statement but we do not need to address it to
decide this case.

                               20
Released Parties [would not be] willing to make their
contributions under the Plan” and, “[a]bsent those
contributions, the Debtors [would] be unable to satisfy their
obligations under the USA Settlement Agreements [i.e., the
settlement with the government] and no chapter 11 plan
[would] be feasible and the Debtors would likely [have] shut
down upon the revocation of their Medicare enrollment and
billing privileges.” (App. at 24; see also App. at 3596, 3598
(the Bankruptcy Court stating that “it is clear that the releases
are necessary to both obtaining the funding and consummating
a plan” and that “[w]ithout [MLH and TA’s] contributions,
there is no reorganization”).) Those conclusions are well
supported by the record. (App. at 1575-80, 2230, 2233-35; D.
Ct. D.I. 25-2, at *233-34.) Indeed, the record makes
abundantly clear that the release provisions – agreed to only
after extensive, arm’s length negotiations – were absolutely
required to induce MLH and TA to pay the funds needed to
effectuate Millennium’s settlement with the government and
prevent the government from revoking Millennium’s Medicare
billing privileges. Absent MLH and TA’s payment, the
company could not have paid the government, with the result
that liquidation, not reorganization, would have been
Millennium’s sole option. Restructuring in this case was
possible only because of the release provisions.

        To Voya, that point is irrelevant.11 Voya contends that
Stern demands an Article III adjudicator decide its RICO/fraud
claims because those claims do not stem from the bankruptcy
itself and would not be resolved in the claims-allowance
process. It asserts that the limiting phrase from Stern, i.e.,

       11
          In fact, Voya does not even argue in its briefing that
the release provisions were not integral to the restructuring.

                               21
“necessarily be resolved in the claims allowance process[,]”
cannot be stretched to cover all matters integral to the
restructuring. (Opening Br. at 31.) In that regard, Voya argues
that an assertion that something is “integral to the
restructuring” is really “nothing more than a description of the
claims allowance process.” (Reply Br. at 13.)

        That argument fails primarily because it is not faithful
to what Stern actually says. Had the Stern Court meant its
“integral to the restructuring” language to be limited to the
claims-allowance process, it would not have said that a
bankruptcy court may decide a matter when a “creditor has
filed a claim, because then” – adding its own emphasis to that
word – “the ensuing preference action by the trustee become[s]
integral to the restructuring of the debtor-creditor
relationship.” 564 U.S. at 497 (alteration in original). That
phrasing makes clear that the reason bankruptcy courts may
adjudicate matters arising in the claims-allowance process is
because those matters are integral to the restructuring of
debtor-creditor relations, not the other way around. And, as
the Appellees correctly observe, Stern is not the first time that
the Supreme Court has so indicated. In Granfinanciera, S.A.
v. Nordberg, 492 U.S. 33 (1989) – a case that the Stern Court
viewed as informing its Article III jurisprudence, 564 U.S. at
499 – the Court answered first whether an action arose in the
claims-allowance process and only then whether it was
otherwise integral to the restructuring of debtor-creditor
relations. See Granfinanciera, 492 U.S. at 58 (“Because
petitioners here … have not filed claims against the estate,
respondent’s fraudulent conveyance action does not arise ‘as
part of the process of allowance and disallowance of claims.’
Nor is that action integral to the restructuring of debtor-creditor

                                22
relations.”).12 If the first step in that analysis were all that was
relevant, the second step would not have been taken.

       12
          Voya makes two additional arguments regarding the
proper interpretation of Stern: that courts of appeals have
interpreted Stern as centered on the claims-allowance process,
and that the phrase “integral to the restructuring” is not
supported by the Supreme Court’s public rights jurisprudence.
As to the former, we are not convinced that the out-of-circuit
cases Voya cites are inconsistent with our reading of Stern.
Stern on its face governed in those cases, so, unlike here, the
courts had no need to extract a principle beyond Stern’s plain
terms. See In re Renewable Energy Dev. Corp., 792 F.3d 1274,
1279 (10th Cir. 2015) (concluding that Stern provided “all the
guidance we need to answer this appeal” because the case
involved the assertion that state law legal malpractice claims
against the bankruptcy trustee by clients of the trustee in his
capacity as an attorney should be heard in bankruptcy court
simply because the malpractice claims were “factually
‘intertwined’ with the bankruptcy proceedings”); In re Fisher
Island Invs., Inc., 778 F.3d 1172, 1192 (11th Cir. 2015)
(holding that Stern did not apply to bar bankruptcy court
adjudication of a claim where, among other things, that claim
“was ‘necessarily resolve[d]’ by the bankruptcy court through
the process of adjudicating the creditors’ claims” (alteration in
original) (citation omitted)); In re Glob. Technovations Inc.,
694 F.3d 705, 722 (6th Cir. 2012) (holding that a bankruptcy
court’s resolution of one issue was permissible under Stern
because it was not possible to rule on a proof of claim without
deciding the issue, and concluding that the bankruptcy court
could decide a second issue that could have been necessary to
ruling on a proof of claim but turned out not to be because the
court did “not believe that Stern requires a court to determine,

                                23
       Voya also raises a “floodgate” argument, saying that, if
we allow bankruptcy courts to approve releases merely
because they appear in a plan, bankruptcy courts’ powers
would be essentially limitless and that an “integral to the
restructuring” rule would mean that bankruptcy courts could
approve releases simply because reorganization financers

in advance, which facts will ultimately prove strictly
necessary”); In re Bellingham Ins. Agency, Inc., 702 F.3d 553,
564-65 (9th Cir. 2012) (holding that a bankruptcy court could
not resolve a fraudulent conveyance action similar to that in
Granfinanciera – which the Stern Court made clear could not
have been adjudicated by a bankruptcy court – because it
“need not necessarily have been resolved in the course of
allowing or disallowing the claims against the…estate”); In re
Ortiz, 665 F.3d 906, 909, 912, 914 (7th Cir. 2011) (concluding
that claims could not be decided by a bankruptcy court because
the case essentially matched Stern); see also In re Ortiz, 665
F.3d at 914 (“Non-Article III judges may hear cases when the
claim arises ‘as part of the process of allowance and
disallowance of claims,’ or when the claim becomes ‘integral
to the restructuring of the debtor-creditor relationship[.]’”
(citations omitted)). Voya also cites our decision in Billing v.
Ravin, Greenberg & Zackin, P.A., 22 F.3d 1242 (3d Cir. 1994),
but that decision predates Stern and offers no insight into how
best to interpret it.
        Voya’s second argument, that the rule we adopt today
would not comport with the Supreme Court’s public rights
doctrine, similarly is unavailing. As already noted (see supra
n. 8), the precise basis for the Court’s “integral to the
restructuring” conclusion is unstated, and does not necessarily
flow from the Court’s public rights jurisprudence.

                              24
demand them, which could lead to gamesmanship. The
argument is not without force. Setting too low a bar for the
exercise of bankruptcy court authority could seriously
undermine Article III, which is fundamental to our
constitutional design.13 It is definitely not our intention to
permit any action by a bankruptcy court that could
“compromise” or “chip away at the authority of the Judicial
Branch[,]” Stern, 564 U.S. at 503, and our decision today
should not be read as expanding bankruptcy court authority.

       Nor should our decision today be read as permitting or
encouraging the hypothetical gamesmanship that Voya fears
will now ensue. Consistent with prior decisions, we are not
broadly sanctioning the permissibility of nonconsensual third-
party releases in bankruptcy reorganization plans. Our
precedents regarding nonconsensual third-party releases and
injunctions in the bankruptcy plan context set forth exacting
standards that must be satisfied if such releases and injunctions
are to be permitted, and suggest that courts considering such
releases do so with caution. See In re Global Indus. Techs.,
Inc., 645 F.3d 201, 206 (3d Cir. 2011) (en banc) (explaining
that suit injunctions must be “both necessary to the

       13
           Before the founding, “[t]he colonists had been
subjected to judicial abuses at the hand of the Crown, and the
Framers knew the main reasons why: because the King of
Great Britain ‘made Judges dependent on his Will alone, for
the tenure of their offices, and the amount and payment of their
salaries.’” Stern, 564 U.S. at 483-84 (quoting The Declaration
of Independence ¶ 11). Since ratification, Article III has served
a crucial role in our “system of checks and balances” and
“preserve[s] the integrity of judicial decisionmaking[.]” Id.
(citation omitted).

                               25
reorganization and fair”); In re Continental Airlines, Inc., 203
F.3d 203, 214 (3d Cir. 2000) (“The hallmarks of permissible
non-consensual releases [are] fairness, necessity to the
reorganization, and specific factual findings to support these
conclusions[.]”). Although we are satisfied that both the
Bankruptcy Court and District Court exercised appropriate –
indeed, exemplary – caution and diligence in this instance,
nothing in our opinion should be construed as reducing a
court’s obligation to approach the inclusion of nonconsensual
third-party releases or injunctions in a plan of reorganization
with the utmost care and to thoroughly explain the justification
for any such inclusion.

        In short, our holding today is specific and limited. It is
that, under the particular facts of this case, the Bankruptcy
Court’s conclusion that the release provisions were integral to
the restructuring was well-reasoned and well-supported by the
record.14      Consequently, the bankruptcy court was
constitutionally authorized to confirm the plan in which those
provisions appeared.15

       14
         At oral argument, counsel for Voya candidly
acknowledged that this is “not the usual case.”
https://www2.ca3.uscourts.gov/oralargument/audio/18-
3210InreMilleniumLabHoldings.mp3 (Oral Arg. at 15:03-07.)
       15
          The parties disagree as to whether the Bankruptcy
Court’s decision to confirm the plan even implicates Stern and
Article III. Voya argues that Stern deprived the Bankruptcy
Court of jurisdiction because the release provisions in the
confirmed plan of reorganization constituted a “final
judgment” on the merits of Voya’s state law claims against
Millennium. The Appellees respond that Stern is inapplicable

                               26
       B.     The Remainder of the Appeal Is Equitably
              Moot

      Voya next argues that the District Court erred in
concluding that the remaining issues on appeal are equitably
moot. Again, we disagree.

        “‘Equitable mootness’ is a narrow doctrine by which an
appellate court deems it prudent for practical reasons to forbear
deciding an appeal when to grant the relief requested will
undermine the finality and reliability of consummated plans of
reorganization.” In re Tribune Media Co., 799 F.3d 272, 277
(3d Cir. 2015). At bottom, “[e]quitable mootness assures [the
estate, the reorganized entity, investors, lenders, customers,
and other constituents] that a plan confirmation order is reliable
and that they may make financial decisions based on a
reorganized entity’s exit from Chapter 11 without fear that an
appellate court will wipe out or interfere with their deal.”16 Id.
at 280.

here, or at least readily distinguishable, because there is a
distinction between a court approving the settlement of claims
and adjudicating claims on the merits. According to the
Appellees, the Bankruptcy Court only did the former when it
approved the plan of reorganization. Our conclusion that the
Bankruptcy Court’s actions were constitutionally permissible
assumes Stern’s application. Accordingly, it ultimately is
irrelevant to our decision whether or not the Bankruptcy Court
issued a “final judgment” on Voya’s underlying claims against
Millennium, and we do not address that dispute.
       16
         One of the benefits of bankruptcy is its ability “to aid
the unfortunate debtor by giving him a fresh start in life[.]”

                               27
        An equitable mootness analysis proceeds by asking two
questions: “(1) whether a confirmed plan has been
substantially consummated; and (2) if so, whether granting the
relief requested in the appeal will (a) fatally scramble the plan
and/or (b) significantly harm third parties who have justifiably
relied on plan confirmation.” Id. at 278. Voya concedes that
the plan here is substantially consummated, so we focus on the
second question. Answering it shows that the appeal is indeed
equitably moot.

       Granting Voya the relief it seeks would certainly
scramble the plan. As the District Court explained, “[t]he
Bankruptcy Court found [Voya’s] releases were central to the
Plan and, far from being clearly erroneous, [that conclusion] is

Stellwagen v. Clum, 245 U.S. 605, 617 (1918); see In re Trump
Entm’t Resorts, 810 F.3d 161, 173-74 (3d Cir. 2016) (“A
Chapter 11 reorganization provides a debtor with an
opportunity to reduce or extend its debts so its business can
achieve longterm viability, for instance, by generating profits
which will compensate creditors for some or all of any losses
resulting from the bankruptcy.”). Equitable mootness allows
that benefit to be realized by, among other things, encouraging
an end to costly and protracted litigation based on arguable
blemishes in a reorganization plan. Cf. In re Tribune, 799 F.3d
at 288-89 (Ambro, J., concurring) (“Without equitable
mootness, any dissenting creditor with a plausible (or even not-
so-plausible) sounding argument against plan confirmation
could effectively hold up emergence from bankruptcy for years
(or until such time as other constituents decide to pay the
dissenter sufficient settlement consideration to drop the
appeal), a most costly proposition.”).

                               28
strongly supported by uncontroverted evidence in the record.”
(App. at 374.) The Bankruptcy Court observed, based on
unrefuted evidence, that the “third-party releases, all of
them, … [were] required to obtain the funding for this plan”
(App. at 3594 (emphasis added)); that “the releases [were]
necessary to … consummating a plan” (App. at 3596); and that
“[w]ithout [TA and MLH’s] contributions, there is no
reorganization.” (App. at 3598.) The release provisions,
carefully crafted through extensive negotiations, served as the
cornerstone of the reorganization and, hence, of Millennium’s
corporate survival. Notably, the confirmed plan contains a
severability provision stating, “no alteration or interpretation
[of the plan] can … compel the funding of Settlement
Contribution if the conditions to such funding set forth in the
[Restructuring Agreement] have not been satisfied” (App. at
142), and the Restructuring Agreement, in turn, says that the
settlement contribution is contingent on “a full and complete
release of … the Released Parties” and an injunction to enforce
the release. (App. at 196 (emphasis added).) As the
Bankruptcy Court recognized, all of the releases were essential
to the plan.

       But even if some subset of the release provisions could
be deemed non-essential, it would not be Voya’s. Voya loaned
more than $100 million to Millennium through the 2014 credit
agreement. Its lawsuit raises several claims based on that loan,
including RICO, fraud, and restitution claims.17 The restitution

       17
          MLH and TA are named as defendants only as to the
restitution count. But defendants on all counts are alleged to
be close affiliates of MLH and TA. Importantly, defendant TA
Associates Management is alleged to control TA, and MLH is
alleged to be the effective alter ego of defendant James

                              29
claim alone seeks “restitution of [Voya’s] funds,” among other
relief (App. at 2355), and presumably the other claims seek
damages based on the loan amount, trebled for the RICO
claims. Opening MLH, TA, and their related parties to well
over $100 million in liability, above the $325 million that was
negotiated and paid to settle those same claims, would
completely undermine the purpose of the release provisions.
And again, based on the intense, arm’s length negotiations,
those provisions were included because they were essential to
obtaining the payment that allowed Millennium’s survival.
Given the centrality of the release provisions to the
reorganization, excising them would undermine the
fundamental basis for the parties’ agreement.

       Furthermore, any do-over of the plan at this time would
likely be impossible and, even if it could be done, would be
massively disruptive.      Since the plan was confirmed,
Millennium has paid the government, has “completed
numerous complex restructuring and related transactions,” and
has distributed common stock to the lenders under the 2014
credit agreement. (App. at 6195, 6199.) In addition,
“unsecured creditors [have been] paid the full amount of their
allowed claims” (Supp. App. at 3); Millennium’s lender and
equity base has changed dramatically; the company has sold
off RxAnte; and it “has entered into more than two million
commercial transactions, many of which are with new counter-
parties.” (Supp. App. at 5.) It is inconceivable that these many
post-confirmation developments could be unwound,
particularly those involving the government.

Slattery. All counts in the complaint are directed against TA
Associates Management, Slattery, or both.

                              30
       In that same vein, the relief that Voya seeks would
seriously harm a wide range of third parties. If the plan could
somehow be unwound and Millennium put back in its pre-
confirmation position, the interests and expectations of
Millennium’s new lenders and equity holders – who certainly
invested in reliance on the reorganization – would be wholly
undermined. RxAnte’s acquiror would in turn have to unwind
that acquisition; contracts and transactions with counterparties
would be scuttled; and the status of Millennium and all of its
employees and contractors would obviously be placed in
severe jeopardy.

       Our decision in In re Tribune is on point. There, a
confirmed plan contained provisions settling certain claims by
the estate against various parties connected with a leveraged
buyout of the debtor. In re Tribune, 799 F.3d at 275-76. The
appellant, a creditor, conceded that the plan was substantially
consummated but argued that the relief it sought –
reinstatement of settled causes of action – would not fatally
harm the plan or third parties. Id. at 277, 280. We thought
otherwise and said that allowing the suits barred by the
settlement “would knock the props out from under the
authorization for every transaction that has taken place, thus
scrambling this substantially consummated plan and upsetting
third parties’ reliance on it.” Id. at 281 (citations and internal
quotation marks omitted). We observed that the settlement
was “a central issue in the formulation of a plan of
reorganization” and that “allowing the relief the appeal seeks
would effectively undermine the Settlement (along with the
transactions entered in reliance on it) and, as a result, recall the
entire Plan for a redo.” Id. at 280-81. It was plain that third
parties would be harmed because, among other things,
“returning to the drawing board would at a minimum

                                31
drastically diminish the value of new equity’s investment[,]”
which “no doubt was [made] in reliance on the Settlement[.]”
Id. at 281. That same reasoning applies with great force in this
case.18

       18
          Voya tries to distinguish In re Tribune by arguing that
the appellant there sought to scuttle the settlement provisions
in their entirety, unlike here. But eliminating the release
provisions as to Voya would have the same effect as
eliminating the release provisions in their entirety: the plan
would fall apart.
        Voya also points us to several other decisions it views
as demonstrating that we have “found bankruptcy appeals not
to be equitably moot where, as here, a party merely seeks
revival of discrete released claims that would not otherwise
upset a confirmed plan.” (Opening Br. at 51.) The cases it
highlights, however, unlike the matter now before us, all
involved release provisions that were not central to the plans at
issue. See In re Semcrude, 728 F.3d at 324 (holding that a case
was not equitably moot because, among other things, granting
the requested relief “would [not] upset the [settlement]
or … cause the remainder of the plan to collapse” and the
amounts involved in the suit would not “destabilize the
financial basis of the settlement”); In re PWS Holding Corp.,
228 F.3d 224, 236 (3d Cir. 2000) (rejecting an equitable
mootness argument where “[t]he releases (or some of the
releases) could be stricken from the plan without undoing other
portions of it”); In re Continental Airlines, 203 F.3d at 210
(rejecting an equitable mootness challenge because, among
other things, “[n]o evidence or arguments [were] presented that
Plaintiffs’ appeal, if successful, would necessitate the reversal
or unraveling of the entire plan of reorganization”).

                               32
        Voya raises several unpersuasive arguments
challenging the District Court’s equitable mootness decision.
In spite of all the evidence, it contends that striking the release
provisions only as to it would not cause the plan to collapse. It
says that the remainder of the plan would stay in place,
including the release provisions as to other parties, given that
the other lenders consented. According to Voya, nothing in the
plan would authorize MLH and TA to demand the return of
their contribution if the release provisions were stricken, and it
claims that, in fact, the plan anticipates “just such a scenario
and gives [MLH and TA] … the ability to access insurance
coverage and/or indemnification from Debtors (capped at $3
million) for defense costs.” (Opening Br. at 50.) But, as
explained above, striking the release provisions as to Voya
would certainly undermine the plan. That the plan provides for
“insurance coverage and/or indemnification” as a contingency
does not change that. As previously noted, the plan says that
the settlement payment, the very payment on which
Millennium’s viability as a going concern depended, could not
be compelled absent full and complete releases from all of
Millennium’s pre-bankruptcy lenders, including Voya.

        Voya next argues that granting it relief will not disturb
legitimate third-party expectations. As to that point, it declares
that MLH and TA’s reliance interests do not count, “both
because they are relying on the Plan to obtain unlawful
nonconsensual releases to which they are not legally entitled
and because they are sophisticated parties who were intimately
involved in constructing the Plan and fully aware of the
appellate risks when they allowed it to be consummated.”
(Opening Br. at 53.) But, besides the circularity of its
reasoning, Voya’s position misses the mark, as it ignores the
fact that numerous other third parties, including Millennium’s

                                33
new post-bankruptcy equity holders and lenders, would be
harmed significantly by any effort to unwind the plan.

       Voya also raises a series of arguments claiming that it
would be fair to strike the releases as to it while not returning
any of MLH and TA’s contribution and without requiring Voya
to return any of the value it obtained by way of the
reorganization.19 Each of those arguments is a non-starter.
Voya wants all of the value of the restructuring and none of the
pain. That is a fantasy and upends the purpose of the equitable
mootness doctrine, which is designed to prevent inequitable
outcomes. Cf. In re PWS Holding Corp., 228 F.3d 224, 235-
36 (3d Cir. 2000) (“Under the doctrine of equitable mootness,
an appeal should be dismissed … if the implementation of that
relief would be inequitable.” (emphasis added)). “Equity
abhors a windfall.” US Airways, Inc. v. McCutchen, 663 F.3d
671, 679 (3d Cir. 2011), vacated on other grounds, 569 U.S.
19
           Voya says that that course of action would not be
inequitable because it did not receive any consideration for
releasing its claims; that the plan gave MLH and TA the right
to insist that plan consummation be delayed until all appeals
were exhausted, and they instead assumed the risk of an
adverse ruling; that, “prior to the bankruptcy, [MLH and
TA] were willing to make the same $325 million contribution
in the context of an out-of-court restructuring, even if they did
not receive releases from non-consenting Lenders holding up
to $50 million (subject to increase) of aggregate principal term
loan balance” (Reply Br. at 9); that MLH and TA attempted to
leverage Millennium’s distress to obtain the release provisions;
and that MLH and TA were aware at the time they obtained the
release provisions that our precedents regarding such
provisions were unclear.

                               34
88, 106 (2013); Prudential Ins. Co. of Am. v. S.S. Am. Lancer,
870 F.2d 867, 871 (2d Cir. 1989). Voya would receive a
windfall – at the substantial and uncompensated expense of
MLH and TA – if we were to let it avoid the release provisions
without requiring it to return the value it obtained through the
reorganization consummated on the basis of those release
provisions and without allowing MLH and TA to recover their
contribution. Voya’s arguments also fail by their own terms.
The question of whether Voya received consideration for the
releases is a merits question, not an equitable mootness one.
See In re United Artists Theatre Co., 315 F.3d 217, 227 (3d
Cir. 2003) (explaining that non-consensual releases must be
given in exchange for fair consideration, among other things).
And, regardless of formal consideration, it would still be
inequitable to let Voya retain the benefits of the settlement and
still have the right to sue. See In re Tribune, 799 F.3d at 281
(“When determining whether the case is equitably moot, we of
course must assume [the appellant] will prevail on the merits
because the idea of equitable mootness is that even if [the
appellant] is correct, it would not be fair to award the relief it
seeks.”).

        In the end, the operative question for our equitable
mootness inquiry is straightforward: would granting Voya
relief fatally scramble the plan and/or harm third parties. The
answer is clearly yes.20 Granting Voya’s requested relief
would lead to profoundly inequitable results, and the District

       20
          Nothing in our opinion should be read to imply that
review of reorganization plans involving third-party releases
will always or even often be barred as equitably moot and
therefore effectively unreviewable. Again, our holding today
is specific and limited to the particular facts of this case.

                               35
Court did not abuse its discretion in concluding that the appeal
was equitably moot.

III.   CONCLUSION

       For the foregoing reasons, we will affirm the decision
of the District Court.

                              36