Lindemann v. Mann, 2:17-cv-00180

Appellant Christine Lindemann appealed a bankruptcy court order approving sale of her estate’s beneficial interest in the Rene von Schleinitz testamentary trust to Arvonus Realty Corporation. The Sale Order found trustee Mann had authority to sell, directed consummation upon payment and filings, and found Arvonus a good-faith purchaser.
The trustee represents the sale closed on or about January 27, 2017 with subordination agreements filed that day; Arvonus was the only bidder and its offer was substantial.
Lindemann first sought to stay distribution of sale proceeds (denied); she later moved to stay the sale itself, but that motion was filed after the sale was consummated and was denied as moot by the bankruptcy court.
Trustee Mann moved to dismiss Lindemann’s district-court appeal as moot, relying principally on Seventh Circuit precedent interpreting 11 U.S.C. § 363(m).
Lindemann argued various grounds including alleged bad faith by purchasers/trustee, but did not press the good-faith challenge in her response to the motion to dismiss; the bankruptcy court had already found good faith after hearings and affidavits.
The district court granted the motion to dismiss the appeal as moot under Seventh Circuit authority and denied Lindemann’s stay motion as moot; procedural defects argued by Mann were not reached.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether appeal of sale order is moot after sale consummation	Lindemann sought review of sale approval; asserted various defects including bad faith and fiduciary violations	Mann: sale consummated; under §363(m) appeal is moot unless sale was stayed pending appeal	Appeal dismissed as moot because sale completed and Lindemann failed to obtain a pre-sale stay
Application of 11 U.S.C. § 363(m) safe-harbor	Lindemann contended sale approval was erroneous and alleged bad faith in related filings	Mann: §363(m) protects good-faith purchasers and prevents unwinding absent a stay	Court held §363(m) bars relief where buyer found to be in good faith and sale not stayed
Adequacy of bankruptcy court’s good-faith finding	Lindemann argued bad faith based on purchaser/trustee conduct (in other briefs)	Mann pointed to bankruptcy court’s multiple hearings, affidavits, and express finding of good faith	Court found no clear error in bankruptcy court’s good-faith determination and rejected bad-faith claim
Motion to stay sale pending appeal	Lindemann moved for stay after sale closed	Mann: stay motion came too late; stay needed before consummation to preserve appeal	Stay denied as moot because sale already consummated

Lardas v. Grcic, 847 F.3d 561 (7th Cir. 2017) (when sale is consummated, appellant must obtain a stay pending appeal or the appeal becomes moot under §363(m))
In re River West Plaza–Chicago, LLC, 664 F.3d 668 (7th Cir. 2011) (party challenging sale to a good-faith purchaser must obtain a stay pending appeal)
In re CGI Industries, Inc., 27 F.3d 296 (7th Cir. 1994) (same principle regarding necessity of a stay to preserve appellate review of sale)
Hower v. Molding Sys. Eng. Corp., 445 F.3d 935 (7th Cir. 2006) (standard of review for bankruptcy court factual findings is clear-error)