Offcl Comm v. Walker Cty Hosp, 3 F.4th 229

Walker County Hospital Corporation (Debtor) filed Chapter 11 after severe financial distress; Huntsville Community Hospital (Buyers) submitted a stalking-horse bid conditioned on third‑party financing.
The Official Committee of Unsecured Creditors (Committee) negotiated a Settlement with the Debtor that waived objections to the sale in exchange for improved recovery terms; the bankruptcy court entered a Sale Order approving that transaction.
Buyers’ financing was delayed; while due diligence continued the Hospital received a sizeable Medicaid payment that, if received before closing, would reduce the Buyers’ expected recovery under the Accounts Receivable sharing formula.
To preserve the deal, the Debtor filed an emergency motion to amend the Sale Order (reduce purchase price and grant an administrative claim) and to waive the Rule 6004(h) 14‑day stay; the bankruptcy court entered the Amendment Order effective immediately and authorized immediate closing.
The sale closed within 24 hours after the Amendment Order; the Committee did not seek a stay but appealed the Amendment Order arguing procedural defects and that § 363(m) did not apply.
The district court dismissed the appeal as statutorily moot under 11 U.S.C. § 363(m); the Fifth Circuit affirmed, holding failure to obtain a stay is fatal and the Amendment Order was inseparable from the Sale Order.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether 11 U.S.C. § 363(m) bars the Committee’s appeal because no stay was obtained	Committee: appealed only the Amendment Order (not the Sale Order) and the Amendment Order did not cite § 363(b)/(c), so § 363(m) should not apply	Buyers/District/Debtor: the Amendment merely amended the Sale Order; sale was consummated in good faith and no stay was sought, so § 363(m) forecloses the appeal	Held: § 363(m) applies; failure to obtain a stay is fatal; the Amendment Order is inseparable from the Sale Order, so the appeal is moot
Whether court should reach Committee’s procedural due process/time-to-seek-stay claim	Committee: the short window and emergency handling violated its procedural due process and deprived it of a meaningful opportunity to seek a stay	Buyers/District: statutory mootness under § 363(m) disposes of the appeal; courts need not reach due process claims when appeal is moot	Held: Court declined to address due process arguments after resolving statutory mootness under § 363(m)

In re Ginther Trusts, 238 F.3d 686 (5th Cir. 2001) (failure to obtain a stay is fatal to challenging an authorized bankruptcy sale)
Am. Grain Ass’n v. Lee-Vac, Ltd., 630 F.2d 245 (5th Cir. 1980) (without a stay, appeals cannot affect rights of third‑party purchasers; appeal dismissed as moot)
In re Bleaufontaine, Inc., 634 F.2d 1383 (5th Cir. 1981) (protecting speedy, final bankruptcy sales promotes creditor recovery)
Sneed Shipbuilding, Inc., 916 F.3d 405 (5th Cir. 2019) (section 363(m) bars review of unstayed sales; mutually dependent arrangements treated as part of sale)
In re Energytec, Inc., 739 F.3d 215 (5th Cir. 2013) (distinguishable where bankruptcy court reserved a sale‑related issue for later determination, making that ruling separately appealable)
In re TMT Procurement Corp., 764 F.3d 512 (5th Cir. 2014) (standard of review for bankruptcy appeals: facts for clear error, law de novo)