Court Opinion

ID: 217282
Source: CourtListenerOpinion
Date Created: 2011-05-24 00:01:39+00
Date Added: 2024-06-11T17:28:31.820506
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                MAY 23 2011

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

In the Matter of: DEXTER                         No. 10-15910
DISTRIBUTING CORPORATION,
ET AL.                                           D.C. No. 2:09-cv-01099-JAT

TAYLOR R. COLEMAN,
                                                 MEMORANDUM*
              Appellant,

  v.

ANMP, MARK FRANKS, DEXTER
DISTRIBUTING CORPORATION,
ET AL., OFFICIAL COMMITTEE OF
UNSECURED CREDITORS,

              Appellees,

NEW CASTLE MEGASTORE CORP.;
CASTLE REALTY CORPORATION,

              Debtors - Appellees

                   Appeal from the United States District Court
                            for the District of Arizona
                   James A. Teilborg, District Judge, Presiding

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                                          1
                        Argued and Submitted May 9, 2011
                            San Francisco, California
Before: D.W. NELSON and W. FLETCHER, Circuit Judges, and DUFFY, District
Judge.**
      Taylor Coleman appeals a decision by the district court holding that his

appeal of an order by the bankruptcy court confirming a plan of reorganization was

statutorily and constitutionally moot. We have jurisdiction under 28 U.S.C. §

158(d), and we AFFIRM.

      This Court reviews de novo a district court’s decision on appeal from a

bankruptcy court. Greene v. Savage (In re Greene), 583 F.3d 614, 618 (9th Cir.

2009). We review the bankruptcy court’s conclusions of law and interpretation of

the Bankruptcy Code de novo, and its findings of fact for clear error. Id.

      The district court properly held that Coleman’s appeal was moot under 11

U.S.C. § 363(m) since the debtors’ business had already been sold and the

bankruptcy court’s conclusion that the buyer, Mark Franks, was a good faith

purchaser was not clearly erroneous. Paulman v. Gateway Venture Partners III,

L.P. (In re Filtercorp, Inc.), 163 F.3d 570, 576 (9th Cir. 1998) (“When a sale of

assets is made to a good faith purchaser, it may not be modified or set aside unless

the sale was stayed pending appeal.”).

       **
            The Honorable Kevin Thomas Duffy, United States District Judge for
the Southern District of New York, sitting by designation.
                                          2
      Although Franks was an executive of one of the debtors’ companies, a sale

to an insider is not per se bad faith. See id. at 577. Further, following testimony,

the bankruptcy court found that the debtors had properly considered “a number of

alternatives” besides the sale to Franks, but “[n]one that promised a greater return

to creditors materialized.” The bankruptcy court determined that “Franks is the

only possible buyer and that his purchase price is above the fair market value of the

business.” Thus, the bankruptcy court’s conclusion that Franks was a good faith

purchaser was not “illogical, implausible, or without support in the record.” Retz v.

Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010) (citation omitted).

      Coleman’s appeal is also constitutionally moot, since there have been

“intricate and involved transactions” in reliance on the bankruptcy court’s order

confirming the reorganization plan, and reversal would affect the rights of

numerous third parties. See Trone v. Roberts Farms, Inc. (In re Roberts Farms,

Inc.), 652 F.2d 793, 797 (9th Cir. 1981); Southwest Prods., Inc. v. Durkin (In re

Southwest Prods., Inc.), 144 B.R. 100, 105 (B.A.P. 9th Cir. 1992).

AFFIRMED.

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