Court Opinion

ID: 9896222
Source: CourtListenerOpinion
Date Created: 2023-11-09 20:00:52.457771+00
Date Added: 2024-06-11T09:14:31.680574
License: Public Domain

NOT FOR PUBLICATION                     FILED
                        UNITED STATES COURT OF APPEALS                      NOV 9 2023
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                                 FOR THE NINTH CIRCUIT

In re: CPESAZ LIQUIDATING, INC., FKA No. 22-60039
Community Provider of Enrichment
Services, Inc.; et al.,              BAP No. 21-1123

                   Debtors,
                                                 MEMORANDUM*
------------------------------

ROBERT BENNETTI; LINDA MARIANO;
LINKI PEDDY; and CHARLES
FOUST, JR.,

                   Appellants,

  v.

CPESAZ LIQUIDATING, INC., FKA
Community Provider of Enrichment
Services, Inc.; et al.,

                   Appellees.

                             Appeal from the Ninth Circuit
                              Bankruptcy Appellate Panel
              Lafferty III, Gan, and Taylor, Bankruptcy Judges, Presiding

                         Argued and Submitted October 18, 2023
                               San Francisco, California

Before: BEA, CHRISTEN, and JOHNSTONE, Circuit Judges.

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      Certain participants in an Employee Stock Ownership Plan (“ESOP”) appeal

from the Bankruptcy Appellate Panel’s order affirming the bankruptcy court’s

orders confirming the bankruptcy plan and denying their motions for temporary

allowance of claims and to appoint a Chapter 11 trustee. We have jurisdiction

under 28 U.S.C. § 158(d)(1). We grant the motion to dismiss the appeal.

      1. The amended notice of appeal to this Court identifies appellants as

“Robert Bennetti, Linda Mariano, Linki Peddy, Charles Foust, Jr., and 92 Other

Participants in the CPES Employee Stock Ownership Plan and Trust.” Federal

Rule of Appellate Procedure 3(c) requires the notice of appeal be “sufficiently

definite to ‘give[] fair notice of the specific individual or entity seeking to

appeal.’” Al-Qarqani v. Chevron Corp., 8 F.4th 1018, 1023 (9th Cir. 2021)

(alteration in original) (quoting Torres v. Oakland Scavenger Co., 487 U.S. 312,

318 (1988)). Because nothing in the notice of appeal or in the Appellants’ record

on appeal sufficiently specifies the “92 Other Participants,” this Court lacks

jurisdiction over them. See id. Accordingly, only the four named individuals

identified in the caption of this memorandum disposition (“Participants”) have

appealed, and the clerk is directed to revise the docket to reflect that they are the

only appellants.

      2. As to the Participants, we dismiss this appeal as equitably moot. This

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Court weighs four factors in applying equitable mootness:

      (1) whether a stay was sought; (2) whether the plan has been
      substantially consummated; (3) the effect of the remedy on third parties
      not before the court; and (4) “whether the bankruptcy court can fashion
      effective and equitable relief without completely knocking the props
      out from under the plan and thereby creating an uncontrollable situation
      for the bankruptcy court.”

Cobb v. City of Stockton (In re City of Stockton), 909 F.3d 1256, 1263 (9th

Cir. 2018) (quoting JPMCC 2007–C1 Grasslawn Lodging, LLC v. Transwest

Resort Props., Inc. (In re Transwest Resort Props., Inc.), 801 F.3d 1161, 1167–68

(9th Cir. 2015)).

      There is no dispute that the first and second factors favor equitable mootness

because Participants did not seek a stay and the plan is substantially consummated.

Failure to seek a stay “without adequate explanation” is generally sufficient on its

own to compel dismissal of an appeal. Id. at 1264. As to the third factor,

unwinding the plan would require undoing settlements with and clawing back

payments from third parties not before this Court. It thus favors equitable

mootness. See Motor Vehicle Cas. Co. v. Thorpe Insulation Co. (In re Thorpe

Insulation Co.), 677 F.3d 869, 882 (9th Cir. 2012). Finally, on the fourth factor, the

relief sought by Participants in their briefs1 would require “knocking the props out

1
  At oral argument, Participants’ counsel conceded it was too late to seek this relief
and requested this Court remand to the bankruptcy court for an evidentiary hearing
regarding the independence of the current ESOP trustee. Participants forfeited this

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from under the plan” to conduct a new vote on the plan or replace the current

bankruptcy trustee with a court-appointed one. Id. at 881. Unwinding the plan and

clawing back completed payments may be “impossible or inequitable.” Rev Op

Grp. v. ML Manager LLC (In re Mortgages Ltd.), 771 F.3d 1211, 1218 (9th Cir.

2014). It is not equitable to provide such relief here.

      Accordingly, we dismiss this appeal as equitably moot.2

      DISMISSED.

argument because they did not seek this relief in their opening brief. See Martin v.
City of Oceanside, 360 F.3d 1078, 1081 (9th Cir. 2004).
2
  We deny Participants’ motion to supplement the record and/or for judicial notice.

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