491 B.R. 489
Bankr. W.D. Ky.2013Background
- Jones oil and gas leases originated in 1992 and were assigned to Mammoth Resource, LLC in 2005.
- Debtors filed Chapter 11 petitions in 2010, with estates to be jointly administered.
- Trustee sought to sell Jones Leases under §363(b) in 2012; Appellant objected.
- Sale order entered December 12, 2012; stay and bond issues followed; sale held January 29, 2013.
- Court ultimately approved sale; Appellant argues leases were not estate property under §365(d)(4) and not subject to sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §365(d)(4) applies to oil and gas leases in Kentucky | Jones Leases were not assets of the estate under §365(d)(4) | Leases were part of the estate and subject to sale under §363(b) | Yes; leases were estate property for purposes of §363(b) sale; mootness analysis applicable. |
| Whether §363(m) requires dismissal of the appeal after a consummated sale | Appellant argues §363(m) mootness does not apply if property not estate asset | Under Parker, §363(m) moots appeal when sale is unstayed | §363(m) applies; appeal dismissed as statutorily moot. |
| Whether the sale order was properly authorized and the mootness doctrine applies regardless of factual disputes about property status | Property status contested; sale invalid if leases not estate property | Bankruptcy court properly found estate inclusion; mootness controls | Mootness applies; appeal dismissed. |
Key Cases Cited
- In re Parker, 499 F.3d 616 (6th Cir. 2007) (mootness applies to consummated sales without a stay regardless of merits)
- In re Sax, 796 F.2d 994 (7th Cir. 1986) (sale authorized under §363(b) matters for mootness even if not estate property)
- In re Nashville Sr. Living, LLC, 620 F.3d 584 (6th Cir. 2010) (§363(m) limits appellate review of a consummated sale)
- The Charter Co., 829 F.2d 1054 (11th Cir. 1987) (mootness for sale approvals where stay not obtained)
- In re Rare Earth Minerals, 445 F.3d 359 (4th Cir. 2006) (expresses caution on expanding statutory mootness exceptions)
