Court Opinion

ID: 768752
Source: CourtListenerOpinion
Date Created: 2012-04-18 09:13:21+00
Date Added: 2024-06-11T17:55:38.006035
License: Public Domain

212 F.3d 1039 (7th Cir. 2000)
In re:  Rimsat, Limited,    Debtor,Appeals of:  Kauthar Sdn Bhd, et al
Nos. 99-1625 and 99-1636
In the  United States Court of Appeals  For the Seventh Circuit
Argued February 22, 2000Decided May 18, 2000

Appeals from the United States District Court   for the Northern District of Indiana, Fort Wayne Division.  Nos. 1:98cv363 and 1:98cv370--William C. Lee, Chief Judge. [Copyrighted Material Omitted][Copyrighted Material Omitted]
Before Coffey, Easterbrook, and Williams, Circuit  Judges.
Williams, Circuit Judge.

1
Kauthar Sdn Bhd and  three of its former attorneys, Daniel Voelker,  William Howard, and William Factor, seek review  of a bankruptcy court order sanctioning them for  improper conduct during a bankruptcy proceeding.  For various reasons, the appellants contend that  the sanctions order must be reversed. Because the  bankruptcy court committed no reversible error in  sanctioning the appellants, however, we affirm.

2
* Kauthar Sdn Bhd is a Malaysian entity that  invested a substantial sum of money in Rimsat,  Ltd., a firm that planned to provide satellite  service to the Pacific Rim using satellite rights  allotted to the island nation of Tonga and  controlled by Tongasat, a Tongan company.  However, Rimsat ran into financial trouble and  filed for bankruptcy. Tongasat and Rimsat  attempted to settle their claims against each  other on two occasions, but Kauthar objected to  both of the proposed compromises contending that  Tongasat was being let off too easy, to the  detriment of Kauthar's investment in Rimsat. In  contesting the Tongasat/Rimsat compromises,  Kauthar's attorneys pursued an aggressive  litigation strategy to force a more favorable  settlement plan. Their strategy earned them at  least one warning from the bankruptcy judge about  unnecessary and purely strategic litigiousness  before the events leading up to the bankruptcy  judge's ultimate decision to sanction them.

3
In challenging the second proposed  Tongasat/Rimsat compromise, Kauthar sought to  depose a number of individuals associated with  Tongasat, including the Princess of Tonga, who  chaired Tongasat's Board of Directors, and Edward  Lau, Tongasat's outside general counsel and its  deposition designee. Tongasat filed a motion for  a protective order and the bankruptcy court held  a hearing on the matter. At the hearing, the  bankruptcy judge expressed concern that Kauthar's  discovery requests had gone beyond the limited  scope relevant to the compromise and ruled that  Kauthar could only depose one person from  Tongasat. William Factor, who represented Kauthar  at the hearing, informed the court that Kauthar  would choose to depose the Princess. Tongasat  objected on the ground that the Princess lacked  personal knowledge regarding the disputed issues.  With the understanding that the Princess would  submit an affidavit attesting to her lack of  personal knowledge, the bankruptcy judge ruled  that Kauthar would have to depose someone else,  and on Kauthar's behalf, Factor selected Edward  Lau. Kauthar's attorneys then filed a motion to  compel the deposition of the Princess asserting  that the Princess had personal knowledge of  disputed issues.

4
Meanwhile, Daniel Voelker and William Howard  represented Kauthar at Lau's deposition. Voelker,  who conducted the deposition, focused his  inquires on whether Lau believed he could  disclose information he had acquired from the  Princess. Dissatisfied with Lau's refusal to  answer yes or no in general to these inquires,  Voelker began to argue with and ask harassing  questions of Lau. For instance, at one point, he  asked Lau, "In the conversation you had in August  of 1995, what did the Princess say to you, and  what did you say to her? I want to know  everything she said to you, Mr. Lau, every single  word she uttered?" Voelker then began to bicker  with Lau and Lau's counsel, implying that Lau  intended to be dishonest in answering and  intended to improperly invoke attorney-client  privilege when he asked, "Are you going to answer  [my question] fully and completely and honestly,  or are you going to selectively answer the  question and assert in your own mind, Mr. Lau,  the attorney-client privilege?" Unable to get the  answers he wanted regarding Lau's ability to  disclose information acquired from the Princess  and claiming that Lau was not a proper deposition  designee, Voelker terminated the deposition  without asking a single question regarding the  proposed Tongasat/Rimsat compromise.

5
Afterwards, Tongasat filed a motion for  sanctions based on the deposition. The motion  alleged that Kauthar's attorneys never had any  intention to depose Lau and intentionally  sabotaged the Lau deposition. The motion sought  attorneys' fees and other costs associated with  the deposition.

6
When the parties next came before the  bankruptcy judge, the judge informed "Kauthar's  counsel" that he was disturbed by the deposition  and, in light of their previous conduct in the  litigation, he was seriously considering not only  imposing a monetary sanction but also revoking  their pro hac vice status.1 Kauthar's counsel  filed a response to Tongasat's sanctions motion  contending that their conduct was entirely  reasonable. Tongasat then filed a reply disputing  the contentions of Kauthar's counsel and  requesting, among other additional sanctions,  that the pro hac vice status granted Kauthar's  counsel be revoked.

7
Approximately eleven months after receiving  Tongasat's reply, and thirteen months after  approving the proposed Tongasat/Rimsat  compromise, the bankruptcy court ruled on the  sanctions motion. It concluded that in light of  the conduct of Kauthar's counsel throughout the  litigation and the behavior of their counsel at  the Lau deposition, there could be no doubt that  Kauthar's counsel never had any intention of  seeking relevant information from Lau, but rather  sought only to increase the cost and  inconvenience of the litigation and delay the  then-imminent hearing regarding the  Tongasat/Rimsat compromise. Pursuant to its  authority to impose sanctions under 11 U.S.C.  sec. 105(a) and the inherent powers doctrine, the  bankruptcy court ordered Kauthar and its  attorneys to pay $10,890.81 in costs associated  with the Lau deposition and revoked Voelker's,  Howard's, and Factor's pro hac vice status.  Kauthar and its attorneys appealed to the  district court, but the district court affirmed  the sanctions order. Now Kauthar and its  attorneys appeal to this court,2 contending  that they were denied due process when the  bankruptcy court sanctioned them, that the  bankruptcy court abused its discretion in  sanctioning them, and that the sanctions order  against them must be vacated because the  bankruptcy court waited too long to issue it.3

II

8
Before we consider the appellants' challenges to  the bankruptcy court's sanctions order, we must  determine whether we have jurisdiction over the  present appeal. The general rule is that a court  of appeals has jurisdiction over a bankruptcy  appeal only if the bankruptcy court's original  order and the district court's order reviewing  the bankruptcy court's original order are both  final. 28 U.S.C. sec. 158(d); In re Devlieg,  Inc., 56 F.3d 32, 33 (7th Cir. 1995) (per  curiam); In re Morse Elec. Co., 805 F.2d 262, 264  (7th Cir. 1986); 16 Charles Alan Wright, Arthur  R. Miller, & Edward H. Cooper, Federal Practice  and Procedure sec. 3926.2, at 273 (2d ed. 1996).  In the bankruptcy context, however, finality does  not require a final order concluding the entire  bankruptcy proceeding; certain orders entered  prior to the conclusion of the bankruptcy  proceeding will be deemed final. In re Forty-  Eight Insulations, Inc., 115 F.3d 1294, 1298-99  (7th Cir. 1997); In re Official Committee of  Unsecured Creditors of White Farm Equip. Co., 943 F.2d 752, 754-55 (7th Cir. 1991). Where an order  terminates a discrete dispute that, but for the  bankruptcy, would be a stand-alone suit by or  against the trustee, the order will be considered  final and appealable. In re Szekely, 936 F.2d 897, 899-900 (7th Cir. 1991); Wright, Miller, &  Cooper, supra, sec. 3926.2, at 272-73.

9
Dicta in In re Wade, 991 F.2d 402, 406 (7th  Cir. 1993), suggests that sanctions orders fall  into this category, but it is unclear whether  such a position can be maintained in the wake of  Cunningham v. Hamilton County, Ohio, 119 S. Ct. 1915 (1999), which holds that sanctions orders  are not automatically appealable prior to final  judgment, at least in the non-bankruptcy context.  Even if it was not final at the time it was  issued, we are persuaded that the bankruptcy  court's sanctions order has since become final.  Kauthar's claims against the bankruptcy estate  have been valued and accepted, and the final  distribution of the bankruptcy estate's claims  has been approved. Because Kauthar's dispute with  the bankruptcy estate has been resolved, orders  relating to Kauthar's participation in the  bankruptcy proceeding are now final. White Farm  Equip., 943 F.2d at 755; Szekely, 936 F.2d at  899-900; see also Forty-Eight Insulations, 115 F.3d at 1298-99. That this finality arose after  the present appeals were filed is no barrier to  jurisdiction, as the doctrine of cumulative  finality allows an appeal from a non-final order  to be "saved" by subsequent events that establish  finality. See In re Emerson Radio Corp., 52 F.3d 50, 52 (3d Cir. 1995); In re Interwest Bus.  Equip., Inc., 23 F.3d 311, 314-15 (10th Cir.  1994); Wright, Miller, & Cooper, supra, sec.  3926.2, at 290. Therefore, and since there is no  reason to doubt the finality of the district  court's order simply affirming the bankruptcy  court's order, our jurisdiction over this appeal  is secure. We now turn to the challenges the  appellants raise to the bankruptcy court's  sanctions order.

III
A.  Due Process

10
The appellants first challenge the bankruptcy  court's sanctions order on constitutional  grounds. They contend that the bankruptcy court  failed to afford them the fair notice and  opportunity to be heard that the Fifth  Amendment's due process clause requires a court  to provide before imposing sanctions. See In re  Hancock, 192 F.3d 1083, 1086 (7th Cir. 1999);  Larsen v. City of Beloit, 130 F.3d 1278, 1286-87  (7th Cir. 1997). As the appellants' due process  challenge raises issues of law, our review is  plenary. Martin v. Brown, 63 F.3d 1252, 1262 (3d  Cir. 1995); Kirkland v. National Mortgage  Network, Inc., 884 F.2d 1367, 1370 (11th Cir.  1989). Cf. United States v. Kirschenbaum, 156 F.3d 784, 792 (7th Cir. 1998) (noting that, in  general, due process claims are reviewed de  novo).

11
The appellants first complain that they received  inadequate notice that they were possible  subjects of sanctions. The bankruptcy court's  practice of referring to them collectively as  "Kauthar's counsel," they contend, did not  sufficiently put them on notice. Fair notice can  come from the court or an opposing litigant,  Hancock, 192 F.3d at 1086 (notice from the  court); Schlaifer Nance & Co. v. Estate of  Warhol, 194 F.3d 323, 334 (2d Cir. 1999) (notice  from opposing party); Martin, 63 F.3d at 1263  (notice from opposing party), but it must, among  other things, inform the person that he or she is  in jeopardy of being sanctioned by the court.  Hancock, 192 F.3d at 1086; Larsen, 130 F.3d at  1286-87.

12
Voelker and Howard have no grounds for  contending that they did not receive adequate  notice. They are specifically mentioned in  Kauthar's motion for sanctions, and they were the  ones who conducted the Lau deposition. That their  conduct at the Lau deposition might be the basis  for sanctions could hardly have been more plain.  Consequently, we conclude that they received  adequate notice that they might be sanctioned.

13
Factor tries to distinguish himself from Voelker  and Howard by pointing out that he was not  present at the Lau deposition and the bankruptcy  court's reference to "Kauthar's counsel" did not  put him on notice that he might be sanctioned  based on the deposition. The problem with this  argument is that Tongasat's motion for sanctions  specifically asks the bankruptcy court to impose  sanctions against Kauthar's attorneys based upon  "the notice of, argument for, and conduct of the  deposition of Edward Lau." Since Factor signed  the notice of deposition, Tongasat's motion put  him on notice that his conduct might be the basis  for sanctions. Moreover, in detailing the  evidence of Kauthar's counsels' intent to harass  individuals associated with Tongasat, Tongasat's  motion for sanctions specifically refers to an  argument Factor made regarding the possibility of  deposing the Princess. In light of these facts,  the practice of the bankruptcy court and Tongasat  to refer to Kauthar's attorneys collectively,  rather than individually, should have put Factor  on notice that he was in jeopardy of being  sanctioned. Thus, Factor received adequate notice  that he might be sanctioned.

14
The appellants next complain that they received  inadequate notice of precisely what conduct might  warrant sanctions. They contend that, although  the bankruptcy court based its sanctions decision  on the entire course of Kauthar's counsels'  conduct with respect to the Tongasat/Rimsat  compromise, neither the bankruptcy court nor  Tongasat ever specifically identified particular  instances of misconduct, other than the events  surrounding the Lau deposition. And, a court may  not, consistent with due process, impose  sanctions based on particular conduct unless the  parties being sanctioned have received notice  (from the court or an opposing party) that that  conduct may be the basis for sanctions. Schlaifer  Nance, 194 F.3d at 334; Bonilla v. Volvo Car  Corp., 150 F.3d 88, 93 (1st Cir. 1998); Martin, 63 F.3d at 1263.

15
In this case, however, we do not read the  bankruptcy court's sanctions order as relying on  conduct, other than that related to the Lau  deposition, in a manner that gives rise to an  obligation to provide the kind of particularized  notice the appellants believe they were due. The  bankruptcy court merely referred to Kauthar's  general litigation strategy as evidence to  support the court's finding that the appellants  intentionally sabotaged the Lau deposition in an  effort to further delay the proceedings and  inconvenience Tongasat and to explain why  monetary sanctions alone would be insufficient to  deter similar future conduct. Moreover, the court  never referred to particular instances of conduct  outside the events surrounding the Lau  deposition; it referenced only Kauthar's general  litigation strategy. As particular conduct, other  than that related to the Lau deposition, did not  actually form the basis for the sanctions  imposed, there is no reason to think that  Kauthar's attorneys were entitled to the sort of  particularized notice they believe they were due.  When a court imposing sanctions simply cites  attorney conduct for the limited purpose of  providing context and background, particularized  notice is not required. In fact, demanding  particularized notice in such situations would  only discourage sanctioning courts from writing  the sort of comprehensive sanctions orders,  containing all of the relevant background  material, that are most helpful to reviewing  courts.

16
To the extent that the appellants were entitled  to notice informing them that Kauthar's general  litigation strategy might provide a background  against which Tongastat's motion would be  evaluated, statements by the bankruptcy court and  in Tongasat's sanctions motion referencing  Kauthar's general litigation strategy with  respect to the Tongasat/Rimsat compromise  provided adequate notice. For instance, before  taking Tongasat's motion for sanctions under  advisement, the bankruptcy judge spoke of the  context in which Tongasat's motion would be  evaluated, "For a year [Kauthar's counsel has]  apparently embarked upon what appears to be a  conscious effort to maximize litigation and, in  doing so, make certain that the litigation is as  time-consuming, difficult, unpleasant, and  expensive as humanly possible." The bankruptcy  court did not deny the appellants due process by  failing to ensure that they received adequate  notice of what conduct might subject them to  sanctions.

17
Finally, the appellants complain that the  bankruptcy court deprived them of their due  process right to have an adequate opportunity to  be heard by not holding a hearing before imposing  sanctions. Providing an opportunity to be heard  includes giving an attorney against whom a court  is considering imposing sanctions the chance to  present his or her case at a meaningful time in  a meaningful manner, but a hearing is not  invariably required before sanctions may be  imposed. Hancock, 192 F.3d at 1086; Kapco Mfg.  Co. v. C & O Enters., Inc., 886 F.2d 1485, 1494-  95 (7th Cir. 1989); Schlaifer Nance, 194 F.3d at  335; Cook v. American S.S. Co., 134 F.3d 771,  774-76 (6th Cir. 1998). Putting to one side the  possibility that the appellants were not entitled  to a hearing in the first place, the problem with  the appellants' argument that the bankruptcy  court should have held a hearing before imposing  sanctions is that the appellants never requested  a hearing. Since a court is not invariably  required to provide a hearing before imposing  sanctions, the appellants' failure to request a  hearing waives any right they might have had to  one. See Kapco, 886 F.2d at 1495 (suggesting that  request for hearing after sanctions were imposed  was too late). Accordingly, the bankruptcy court  did not err by imposing sanctions without holding  a hearing.4

B.  Abuse of Discretion

18
The appellants next challenge the merits of the  bankruptcy court's decision to sanction them. We  review a decision to impose sanctions for an  abuse of discretion. Hancock, 192 F.3d at 1085.  Unless the sanctioning court has acted contrary  to the law or reached an unreasonable result, we  will affirm the sanctions decision. See generally  Hernandez v. Joliet Police Dept., 197 F.3d 256,  264 (7th Cir. 1999); Johnson v. Kakvand, 192 F.3d 656, 661 (7th Cir. 1999).

19
The appellants first argue that the sanctions  imposed against them must be reversed because the  bankruptcy court failed to make an explicit  finding of bad faith. The parties agree that the  bankruptcy court could only exercise its  authority under 11 U.S.C. sec. 105(a) and the  inherent powers doctrine to impose sanctions if  the appellants acted in bad faith.5 It is also  agreed that the bankruptcy court did not  explicitly say that the appellants acted in bad  faith. Still, it is impossible to read the  bankruptcy court's opinion without concluding  that the bankruptcy court did in fact determine  that the appellants acted in bad faith. For  example, the bankruptcy court found that  Kauthar's attorneys, acting in concert, had  decided in advance to sabotage the Lau deposition  and that they did so intentionally and for the  purposes of imposing costs on Tongasat and  delaying the upcoming hearing on the  Tongasat/Rimsat compromise. Such conduct  certainly qualifies as bad faith conduct, even if  the bankruptcy court never said so in so many  words. Nevertheless, the appellants contend that  the bankruptcy court's failure to use the words  "bad faith" requires that we reverse the  bankruptcy court's sanctions order.6

20
We disagree. Reversing an order imposing  sanctions in the face of findings like those made  by the bankruptcy court in this case simply  because the sanctioning court did not use the  words "bad faith" would needlessly elevate form  over substance. Where it is clear that a court  has found that a litigant intentionally abused  the judicial process in an unreasonable and  vexatious manner, we will not reverse an order  imposing sanctions merely because the sanctioning  court did not make an explicit finding of "bad  faith." Cf. In re Volpert, 110 F.3d 494, 500-01  (7th Cir. 1997) (affirming sanctions order under  11 U.S.C. sec. 105(a) without mentioning any  explicit finding of bad faith by the sanctioning  court). In this case, the bankruptcy court's  failure to make an explicit finding of "bad  faith" does not require us to reverse the  sanctions it imposed against the appellants.

21
The appellants next argue that their conduct  did not warrant sanctions in any event. With  respect to Voelker and Howard this argument is  impossible to accept. They were the ones who  conducted the Lau deposition in an unproductive  and harassing manner, and such behavior is  undoubtedly sanctionable. See generally Carroll  v. Jacques Admiralty Law Firm, P.C., 110 F.3d 290  (5th Cir. 1997) (sanctions imposed based on  abusive conduct during deposition); Sassower v.  Field, 973 F.2d 75, 78 (2d Cir. 1992) (sanctions  imposed based on a pattern of vexatious conduct  including "incredibly harassing depositions");  Heinrichs v. Marshall & Stevens Inc., 921 F.2d 418 (2d Cir. 1990) (sanctions imposed based on  improper conduct at depositions). Voelker and  Howard, nevertheless, attempt to explain their  conduct at the deposition as a reasonable  response to Lau's intransigence. But, even if  their conduct could be given the innocent  explanation they urge, the bankruptcy court did  not abuse its discretion in interpreting the  events differently.

22
With respect to Factor, the question is a  closer one, as there is no direct evidence of his  participation in the scheme to sabotage the Lau  deposition. Still, there is sufficient  circumstantial evidence that Factor acted in  concert with Voelker and Howard and that Factor  shares responsibility for the scheme. To begin  with, Factor was the attorney for Kauthar who  noticed the Lau deposition. Likewise, he signed  the motion to compel the Princess's deposition,  a deposition the bankruptcy court considered to  be a part of the plan to delay the proceedings  and otherwise inconvenience Tongasat and those  associated with Tongasat. Moreover, he, Voelker,  and Howard were all members of the same law firm  and jointly represented Kauthar in the bankruptcy  proceedings. In fact, it was Factor who argued  against Tongasat's objection to Kauthar's request  to depose the Princess and who chose to go ahead  and depose Lau. Perhaps most significantly,  however, the bankruptcy judge, who was  undoubtedly familiar with the roles played by the  various counsel who appeared before him, found  that Factor acted in concert with Voelker and  Howard to sabotage the Lau deposition. For all  these reasons, it is impossible to conclude that  the bankruptcy court abused its discretion in  sanctioning Factor.

23
The appellants next argue that, even if  sanctions are appropriate, the sanctions the  bankruptcy court imposed are excessive and  unwarranted. However, the appellants did not make  these arguments to the bankruptcy court in their  response to Tongasat's motion for sanctions. And,  such arguments must be made to the sanctioning  court if they are to be considered by a reviewing  court, as the failure to make an argument  constitutes waiver of that argument. In re  Kroner, 953 F.2d 317, 319 (7th Cir. 1992);  Magicsilk Corp. of N.J. v. Vinson, 924 F.2d 123,  125 (7th Cir. 1991) (per curiam). Since the  appellants did not argue (at least in a timely  fashion7) that any of the sanctions proposed by  or to the bankruptcy court would have been  excessive or unwarranted if in fact sanctions  were appropriate, we will not consider their  arguments on appeal.

24
Finally, Factor, alone, argues that because  ordinary procedural rules would have been  adequate to address the misconduct on his part,  the bankruptcy court abused its discretion by  resorting to 11 U.S.C. sec. 105(a)8 and its  inherent powers. Specifically, Factor suggests  that Bankruptcy Rules 90119 and 702610  (which largely track Rules 11 and 26 of the  Federal Rules of Civil Procedure) would have been  adequate to sanction his misconduct. The  bankruptcy court opted instead to rely on its  authority under 11 U.S.C. sec. 105(a) and the  inherent powers doctrine because Rules 9011 and  7026 would only allow the court to sanction  Factor, as he was the only one who signed the Lau  notice of deposition.

25
A sanctioning court should ordinarily rely on  available authority conferred by statutes and  procedural rules, rather than its inherent power,  if the available sources of authority would be  adequate to serve the court's purposes. Chambers  v. NASCO, Inc., 501 U.S. 32, 50 (1991); Corley v.  Rosewood Care Ctr., Inc. of Peoria, 142 F.3d 1041, 1058-59 (7th Cir. 1998). But, this rule  does not require the sanction imposed on Factor  to be reversed. To begin with, the bankruptcy  court acted pursuant to its statutory authority  under 11 U.S.C. sec. 105(a) as well as its  inherent powers. Thus, it is unlikely that the  rule to which Factor appeals even applies to his  situation. Moreover, a sanctioning court is not  required to apply available statutes and  procedural rules in a piecemeal fashion where  only a broader source of authority is adequate to  justify all the necessary sanctions. Chambers, 501 U.S. at 50-51. The bankruptcy court was  justified in resorting to 11 U.S.C. sec. 105(a)  and its inherent powers in order to ensure that  all the culpable parties received an appropriate  sanction and did not abuse its discretion in  declining to sanction Factor under Bankruptcy  Rule 9011 or 7026.

C.  Timeliness of Sanctions

26
The appellants contend that the 13-month delay  between the bankruptcy court's acceptance of the  proposed compromise of the Tongasat claims and  the final issuance of its sanctions order  requires that the sanctions order be reversed.  The appellants cite Prosser v. Prosser, 186 F.3d 403 (3d Cir. 1999), in which the Third Circuit,  pursuant to a rule announced under its  supervisory power, reversed a sua sponte  sanctions order that was entered after final  judgment. In an effort to prevent piecemeal  appeals and ensure that the deterrent effect of  a sanction is not dissipated through delay, the  Third Circuit held that such orders must be  entered prior to final judgment if they are based  on conduct occurring prior to that time. Id. at  405-06.

27
Even if we were persuaded to adopt the same  rule the Third Circuit has, but Cf. Divane v.  Krull Elec. Co., 200 F.3d 1020, 1025 (7th Cir.  1999) (rejecting proposal to require Rule 11  motions to be filed before final judgment), the  present case would not call for the application  of the rule. To begin with, while the  Tongasat/Rimsat compromise had been approved, the  bankruptcy action itself remained open and  Kauthar remained an active litigant. Thus, the  approval of the Tongasat/Rimsat compromise (even  if it were considered an appealable final  decision) does not create the same sort of  finality as an ordinary final judgment and  therefore does not justify the same requirement  that sanctions orders be issued before a court  enters a final judgment. Moreover, the Third  Circuit's rule appears to apply only to sua  sponte sanctions orders. Here the sanctions order  was the product of a sanctions motion filed by  Tongasat. In sum, while lengthy delays in the  imposition of sanctions are not preferable, we do  not believe the delay that occurred in this case  warrants reversing the bankruptcy court's  sanctions order.

IV

28
In sanctioning the appellants the bankruptcy  court did not deprive the appellants of due  process, abuse its discretion to impose  sanctions, or otherwise commit reversible error.  Accordingly, we AFFIRM the bankruptcy court's order  imposing sanctions against the appellants.

Notes:

1
 Pro hac vice status allows an attorney who has  not been admitted to practice before a court to  practice before that court in a particular case.  See Black's Law Dictionary 1227-28 (7th ed.  1999).

2
 After it appealed, Kauthar reached a settlement  with the other parties to the bankruptcy  proceeding, including Tongasat, releasing each  party from any claim relating to the proceeding  that might be asserted by any of the other  parties. Thus, Kauthar's challenge to the  bankruptcy court's sanctions order is moot and  Kauthar is dismissed as a party to this appeal.  See U.S. Bancorp Mortgage Co. v. Bonner Mall  Partnership, 513 U.S. 18 (1993). However, because  Voelker, Howard, and Factor are not parties to  the settlement agreement and a release would not  address the revocation of their pro hac vice  status, their challenges to the bankruptcy  court's sanctions order are not moot.

3
 Appellants Kauthar, Voelker, and Howard also  request that we expunge certain portions of the  bankruptcy court's order that they contend are  without factual support. While we certainly may  reverse or vacate the bankruptcy court's decision  to impose sanctions, we seriously doubt whether  we can expunge portions of the court's order. The  authority we have discovered, although not  directly on point, suggests that such relief is  not available by way of appeal. See Clark Equip.  Co. v. Lift Parts Mfg. Co., 972 F.2d 817, 820  (7th Cir. 1992) (refusing to vacate opinion  criticizing attorney, but mentioning that the  attorney might seek mandamus); Bolte v. Home Ins.  Co., 744 F.2d 572 (7th Cir. 1984) (concluding  challenge to opinion criticizing, but not  sanctioning, attorney is not appealable). And,  the appellants have not cited any authority to  the contrary. Accordingly, we deny the request to  expunge portions of the bankruptcy court's  opinion.

4
 The appellants also mention in passing an  allegation that they had inadequate notice of the  source of the authority the bankruptcy court  would invoke. Beside the fact that the appellants  never develop an argument on this ground, such an  argument would be a difficult one to make because  Tongasat specifically referred to 11 U.S.C. sec.  105(a) in its sanctions motion and a bankruptcy  court's authority to act under that statutory  provision is often tied to the inherent powers  doctrine. See In re Volpert, 110 F.3d 494, 501  (7th Cir. 1997) (discussing without deciding the  issue).

5
 The parties' agreement subsumes at least two  unresolved issues, whether a bankruptcy court can  act pursuant to the inherent powers doctrine, and  whether bad faith is required for a bankruptcy  court to exercise its authority under 11 U.S.C.  sec. 105(a). We offer no opinion on these issues.

6
 The appellants cite cases involving sanctions  imposed pursuant to the inherent powers doctrine  in which the reviewing court has required a  specific finding of bad faith. See, e.g., Roadway  Express, Inc. v. Piper, 447 U.S. 752, 767 (1980);  Elliott v. Tilton, 64 F.3d 213, 217 (5th Cir.  1995). However, it is impossible to tell from  these cases whether a sanctioning court would  have to use the words "bad faith" or whether  explicit findings demonstrating unequivocally  that the sanctioned party had acted in bad faith  would be sufficient. Accordingly, the cases the  appellants cite are not particularly helpful in  reviewing the sanctions order in this case.

7
 In a motion to reconsider, Factor did argue that  revoking his pro hac vice status was an excessive  sanction, but arguments raised for the first time  in a motion to reconsider are not preserved for  appeal. Green v. Whiteco Indus., Inc., 17 F.3d 199, 201 n.4 (7th Cir. 1994).

8
 In relevant part, 11 U.S.C. sec. 105(a) provides,  "The court may issue any order, process, or  judgment that is necessary or appropriate to  carry out the provisions of this title."

9
 The version of Rule 9011 in effect when Factor's  misconduct took place allowed a bankruptcy court  to sanction an attorney who signed a pleading or  other paper that was frivolous or vexatious.

10
 Rule 7026 simply incorporates by reference  Federal Rule of Civil Procedure 26, which allows  a court to sanction an attorney who signs a  discovery request, response, or objection that is  frivolous or vexatious.