Mission Product Holdings, Inc. v. Schleicher & Stebbins Hotels, 976 F.3d 107

Old Cold, LLC (debtor) licensed IP to Mission; the parties disputed termination and damages, and Mission preserved some §365(n) rights after contract rejection.
S&S was the debtor's only listed secured creditor with pre- and post-petition liens; the bankruptcy court approved DIP financing and a sale process that allowed S&S to credit-bid.
At auction both Mission and S&S left identical "Excluded Assets" (inventory, A/R, cash ≈ $800k) out of acquired assets; S&S ultimately won via credit bid.
Sale and APA did not expressly waive or release S&S's liens; proceeds from subsequent inventory sale amounted to $527,292 cash remaining in the estate.
S&S moved for relief from the automatic stay to foreclose on that cash; Mission objected, arguing (1) the appeal/divestiture issue barred the bankruptcy court from ruling and (2) S&S had implicitly waived liens in the auction.
Bankruptcy court and the BAP granted stay relief; Mission appealed to the First Circuit (after the Supreme Court later resolved the separate §365 issue in Mission Prod. Holdings, Inc. v. Tempnology, LLC).

Issue	Plaintiff's Argument (Mission)	Defendant's Argument (S&S)	Held
Mootness from disbursement of remaining cash	Disbursement to S&S moots appeal; appellate relief impracticable	Cash is fungible; disgorgement and other relief remain practicable	Appeal not moot; disbursement of cash did not preclude meaningful relief
Divestiture of jurisdiction by pending appeal/certiorari	Supreme Court certiorari (and pending appeals) divested bankruptcy court because relief would strip assets relevant to the appeal	Bankruptcy court retained jurisdiction; relief did not impermissibly interfere with appellate rights	Bankruptcy court had jurisdiction; no divestiture shown
Whether S&S waived liens by auction structure/implicit agreement	Matching bid that left assets behind implicitly waived S&S's liens on those assets	No express waiver in APA, sale order, or record; liens remained valid and attach to proceeds	No waiver; implication from bidding dialogue insufficient to extinguish liens
Right to discovery/evidentiary hearing and proof standard for stay relief	Mission sought limited discovery and contended S&S must prove liens by preponderance at hearing	Stay-relief is summary; no disputed material facts; S&S met Grella "colorable claim" standard	Denial of discovery and evidentiary hearing not an abuse; S&S met burden to warrant stay relief

Mission Prod. Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019) (Supreme Court held rejection of a license equals a breach and cannot eliminate licensee's preexisting rights)
Grella v. Salem Five Cent Sav. Bank, 42 F.3d 26 (1st Cir. 1994) (bankruptcy stay-relief requires creditor to show a colorable claim to estate property)
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 814 F.2d 844 (1st Cir. 1987) (abuse-of-discretion standard for reviewing many bankruptcy matters)
In re Calore Express Co., 288 F.3d 22 (1st Cir. 2002) (waiver may be considered at stay-relief stage but is not lightly implied)
Greylock Glen Corp. v. Community Sav. Bank, 656 F.2d 1 (1st Cir. 1981) (discussing mootness when property interest vests in a purchaser after foreclosure)
United States v. $46,588.00 in U.S. Currency, 103 F.3d 902 (9th Cir. 1996) (cash is fungible; commingling does not necessarily defeat ability to fashion relief)