In Re Philadelphia Newspapers, LLC
690 F.3d 161
| 3rd Cir. | 2012Background
- CSMI Parties appeal a bankruptcy court denial of post-petition defamation-based administrative expense claims in Philadelphia Newspapers, LLC Chapter 11 cases.
- District Court held appeal equitably moot but considered merits; it affirmed denial.
- Plan of reorganization (Fifth Amended Plan) and asset sale ($105M) had substantially consummated; purchaser to distribute funds for allowed admin expenses.
- Kinney Article linked to Charter Page post-petition; Charter Page linked to articles; article allegedly republished the defaming material.
- CSMI sought approximately $1.8 million admin expense and $147,140 in related damages; Debtors argued no post-petition tort or related benefit to estate.
- Bankruptcy Court denied the requests; the sale process and plan terms did not incorporate these claims; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the appeal is equitably moot | CSMI argues non-mootness; plan integrity not undermined | Debtors contend mootness due to plan consummation and lack of stay | Not equitably moot; merits review allowed |
| Whether Kinney Article link qualifies as post-petition republication | Linking/referencing republished the Articles | Link/ref not republication under single publication rule | Link not republication; no actionable post-petition defamation under admin expense standard |
| Whether expedited hearing violated due process | Expedited schedule denied full notice/hearing | Expedited procedure permitted by Rule 9006(c) given time constraints | Expedited hearing did not violate due process |
Key Cases Cited
- In re Continental Airlines, 91 F.3d 553 (3d Cir. 1996) (equitable mootness framework (Continental I) and review standards)
- In re Goody’s Family Clothing Inc., 610 F.3d 812 (3d Cir. 2010) (standards of bankruptcy court discretion and review)
- United Artists Theatre Co. v. Walton, 315 F.3d 217 (3d Cir. 2003) (substantial consummation & relief not undermining plan considerations)
- Nordhoff Invs. Inc. v. Zenith Elecs. Corp., 258 F.3d 180 (3d Cir. 2001) (reliance on finality of confirmations; factors for equitable mootness)
- Zenith Elecs. Corp., 329 F.3d 338 (3d Cir. 2003) (five-factor test for equitable mootness; plan impact assessment)
- PWS Holding Corp., 228 F.3d 224 (3d Cir. 2000) (balancing factors for equitable mootness; plan implications)