ACUTE, INC., Appellant, v. ECI PHARMACEUTICALS, LLC, Appellee.
CASE NO. 24-CV-61915-RAR
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
June 18, 2025
ORDER DISMISSING BANKRUPTCY APPEALS
THIS CAUSE comes before the Court on Appellee‘s first Motion to Dismiss Appellant‘s Pending Appeal (“First MTD”), [ECF No. 5], Motion for Leave to Amend Sale Order, [ECF No. 6], and Appellee‘s second Motion to Dismiss Pending Appeal (“Second MTD”), [ECF No. 25]. Appellee ECI Pharmaceuticals, LLC (“ECI”) seeks to dismiss two appeals by Appellant Acute, Inc. (“Acute”) from a bankruptcy proceeding in the United States Bankruptcy Court for the Southern District of Florida, In re ECI Pharmaceuticals LLC, Case No. 24-14430-SMG (Bankr. S.D. Fla. 2024) (“In re ECI”). The Court having considered the Motions, applicable law, and the record in its entirety, it is hereby
ORDERED AND ADJUDGED that Appellee‘s First MTD, [ECF No. 5], is GRANTED, Appellee‘s Motion for Leave to Amend Sale Order is DENIED AS MOOT, [ECF No. 6], and Appellee‘s Second MTD, [ECF No. 25], is GRANTED.
BACKGROUND
I. The Bankruptcy
On May 3, 2024, ECI and its affiliate BioRamo, LLC (“BioRamo”) (collectively, “Debtors”) each filed for Chapter 11 Bankruptcy in the United States Bankruptcy Court for the Southern District of Florida (“Bankruptcy Court”). In re ECI (Bankr. S.D. Fla. May 3, 2024), ECF No. 1; In re BioRamo LLC, Case No. 24-14431-SMG (Bankr. S.D. Fla. May 3, 2024), ECF No. 1. The bankruptcy cases are being jointly administered under Case No. 24-14430-SMG (“Bankruptcy Case”). See In re ECI (Bankr. S.D. Fla. May 7, 2024), ECF No. 15.1
II. First Appeal
A. Sale Order
On August 16, 2024, Debtors filed an Expedited Motion to Authorize and Approve (I) Proposed Private Sale of Substantially All of Debtors’ Assets, and (II) Other Related Relief (“Sale Motion”). In re ECI (Bankr. S.D. Fla. Aug. 16, 2024), ECF No. 172. The Sale Motion sought the Bankruptcy Court‘s approval of an undated Asset Purchase Agreement (“APA”), see id. at 19–30, by which Debtors would sell substantially all their assets to Acute in a private sale pursuant to
B. Order Denying Reconsideration
At some point after the Bankruptcy Court entered the Sale Order, a dispute
First, in late August 2024, after Acute deposited escrow payments required under the APA and the Real Estate Contract into a trust account maintained by Acute‘s counsel, counsel for Debtors and counsel for SFBP “began questioning and harassing” Acute‘s counsel, “alleging that Acute was in breach of the APA and Real Estate Contract because [Acute‘s counsel, acting as] escrow agent was not in possession of the deposit in ‘cleared funds[.]‘” Id. ¶ 21. After some jostling between Acute, Debtors, and SFBP, Acute advised Debtors and SFBP that neither the Real Estate Contract nor the APA required the escrow deposits to be made in cleared funds, id. ¶¶ 21–22, and subsequently, “this form of harassment ceased,” id. ¶ 23.
Next, SFBP “decided to unilaterally impose a closing date on the Real Estate Contract for September 10, 2024.” See id. ¶ 24. In Acute‘s view, this closing demand was “in violation of the contractual obligations of the parties and in violation of the [Sale Order].” Id. ¶ 26. When Acute did not appear at the closing on September 10, 2024, SFBP declared that Acute was in default under the Real Estate Contract. See id. ¶ 26. Acute maintained that it was not required to close under either the Real Estate Contract or the APA because “[a]fter the entry execution of the APA and the Real Estate Contract,” Acute learned that Debtors were “not in the position to provide for an orderly transfer, assignment or use of” certain governmental licenses that were necessary for Acute to operate the business, the transfer of which was a condition precedent to closing under the APA. Id. ¶ 4.
Therefore, Acute posited that the Bankruptcy Court needed to vacate and amend the Sale Order in order to clarify “when the closing on the APA and the Real Estate Contract needs to occur, in order to give the Debtors and Acute the time needed for the appropriate governmental agencies to allow Acute the ability to operate the businesses with the appropriate Licenses intact.” Id. Specifically, Acute requested that the “[Bankruptcy] Court modify the [Sale Order] to allow sufficient time for appropriate procedures to be put in place to allow for the use, transfer and/or assignment of the Licenses so that Acute will be able to operate the businesses upon closing.” Id. ¶ 28.
On September 25, 2025, the Bankruptcy Court held a hearing on the Motion for Reconsideration (“Sale Hearing”). See Sale Hearing Transcript, [ECF No. 13]. At the Sale Hearing, the Bankruptcy Court explained that it would deny the Motion for Reconsideration because it was an “inappropriate
[I]t sounds like [Acute] agreed to certain terms and provisions regarding the license that maybe they weren‘t prepared to fulfill timely, but this goes both ways, this is an utter mess on both sides, and you all need to decide, is there a deal to be had or is there not, and if there is, does somebody want me to enforce it or not. But the motion to reconsider is not the right vehicle. There is no basis to reconsider the entry of the [S]ale [O]rder, it was appropriate and there‘s no grounds under Rule 59 or 60 to vacate or rehear that.
Id. at 12:19–13:2. On September 27, 2024, the Bankruptcy Court issued a written Order memorializing its oral ruling denying the Motion for Reconsideration (“Order Denying Reconsideration”). See In re ECI (Bankr. S.D. Fla. Sept. 27, 2024), ECF No. 229. On October 11, 2024, Appellant filed a Notice of Appeal of both the Sale Order and the Order Denying Reconsideration (“First Notice of Appeal”). See [ECF No. 1]; In re ECI (Bankr. S.D. Fla. Oct. 11, 2024), ECF No. 257. ECI filed the First MTD on October 18, 2024, [ECF No. 5]; Acute filed a Response on November 4, 2024 (“First MTD Response”), [ECF No. 10]; and ECI filed a Reply on November 11, 2024 (“First MTD Reply”), [ECF No. 18].
III. Second Appeal
Acute separately appeals from the Bankruptcy Court‘s Order Confirming Debtors’ Amended Joint Plan of Liquidation (“Confirmation Order”). In re ECI (Bankr. S.D. Fla. Oct. 24, 2024), ECF No. 296.
In parallel to the sale process that is the subject of the First Appeal, Debtors sought the Bankruptcy Court‘s approval of a small business plan of liquidation pursuant to
As scheduled, the Bankruptcy Court held a hearing on the Plan on October 22, 2024 (“Confirmation Hearing”). See Confirmation Hearing Transcript, [ECF No. 31]. Acute did not attend the hearing or otherwise object to the confirmation of the Plan. See Confirmation Order at 3 (noting attendees at Confirmation Hearing and indicating that there were no objections to confirmation); Confirmation Hearing Transcript, [ECF No. 31] at 4:1-3 (noting that no representative for Acute was present at the Confirmation Hearing). The Bankruptcy Court then entered the Confirmation Order on October 24, 2024, confirming the Plan pursuant to
LEGAL STANDARD
District courts may review bankruptcy decisions on appeal. Miner v. Bay Bank & Trust Co., 185 B.R. 362, 365 (N.D. Fla. 1995), aff‘d, 83 F.3d 436 (11th Cir. 1996). A bankruptcy court‘s factual findings are reviewed for clear error, and its legal conclusions are reviewed de novo. See Martin v. Martin, 618 B.R. 326, 329 (S.D. Fla. 2020) (quoting In re Englander, 95 F.3d 1028, 1030 (11th Cir. 1996) (citation and internal quotations omitted)). A bankruptcy court‘s factual findings may be clearly erroneous when “the reviewing court upon examining the entire evidence is left with the definite and firm conviction that a mistake has been committed.” Kane v. Steward Tilghman Fox & Bianchi, P.A., 485 B.R. 460, 468 (S.D. Fla. 2013) (cleaned up). And when reviewing a bankruptcy court‘s legal conclusions de novo, the Court is required to make a judgment “independent of the bankruptcy court‘s, without deference to that court‘s analysis and conclusions.” In re Piper Aircraft Corp., 244 F.3d 1289, 1295 (11th Cir. 2001). To that end, a district court may affirm a bankruptcy court‘s order “on any ground supported by the record.” Martin, 618 B.R. at 330 (quoting In re Gosman, 382 B.R. 826, 839 n.3 (S.D. Fla. 2007) (cleaned up)).
ANALYSIS
I. First Appeal and Motion for Leave to Amend Sale Order
A. Appeal of Sale Order
Acute‘s appeal of the Sale Order is not timely. A notice of appeal of a final bankruptcy order must be filed within fourteen days of the order. See
There is no dispute that the First Appeal would be timely if the Motion for Reconsideration tolled the time to file a Notice of Appeal. Acute filed the Motion for Reconsideration within fourteen days of the Sale Order and filed the Notice of Appeal within fourteen days of the Bankruptcy Court‘s Order Denying Reconsideration. See Sale Order (entered on August 30, 2024); Mot. for Recons. (filed on September 13, 2024); Order Denying Recons.
Bankruptcy Rule 9023 applies civil Rule 59 to bankruptcy proceedings, permitting a motion to alter or amend a judgment. See
- mistake, inadvertence, surprise, or excusable neglect;
- newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
- fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
- the judgment is void;
- the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
- any other reason that justifies relief.
The Court agrees that the Motion for Reconsideration was not properly brought under either Bankruptcy Rule 9023 or 9024, and, therefore, did not toll the time to appeal the Sale Order. Although the Motion for Reconsideration is styled as a motion under Bankruptcy Rules 9023 and 9024, “the style of a motion is not controlling.” Finch v. City of Vernon, 845 F.2d 256, 258 (11th Cir. 1988) (citing Lucas v. Florida Power & Light Co., 729 F.2d 1300, 1302 (11th Cir. 1984)). What matters is whether the motion really is what it says it is, i.e., whether the relief requested is of a type that can be granted under the rule cited. See Lucas, 729 F.2d at 1302 (holding that a court must “construe [a motion], however styled, to be the type proper for the relief requested” (quoting Miller v. Transamerican Press, Inc., 709 F.2d 524, 527 (9th Cir. 1983))). A motion improperly styled as a motion for reconsideration under either Rule 59 or Rule 60 will not toll the time to appeal. Id. at 1301–02 (finding that a motion improperly styled as a motion to amend the judgment under Rule 59 did not have tolling effect under Federal Rule of Appellate Procedure 4(a)(4) because it was really a motion requesting costs under Rule 54); cf. Finch, 845 F.2d at 258 (finding that a motion was best characterized as a Rule 59(e) motion even though it was not labelled as such and therefore tolled the time for appeal).
Here, the relief requested in the Motion for Reconsideration is that the Bankruptcy Court vacate the Sale Order and amend it to include specific references to the conditions precedent that would be required to trigger Acute‘s closing obligations under the APA and to include a specific closing date. See First MTD Resp. ¶ 10. The problem is that Acute is shooting at the wrong target. The relief requested is aimed not at the Sale Order itself, but at the parties’ contractual obligations under
At bottom, Acute wants the Bankruptcy Court to determine the parties’ closing obligations and to fix a closing date through the Sale Order. But Acute cannot recast what is fundamentally a motion to enforce as a motion to reconsider by requesting this relief in the form of an amendment to the Sale Order. The parties’ closing obligations are dictated by the APA, not the Sale Order. The Bankruptcy Court entered the Sale Order pursuant to
Consistent with this understanding of section 363, the Sale Order does not require a closing. Instead, it explicitly recognizes that the parties’ closing obligations are controlled by the APA, providing that “[t]he Debtors and [Acute] are free to close under the APA at any time, subject to the express terms of the APA.” Sale Order ¶ 5. The Sale Order also provides that the Bankruptcy Court retains exclusive jurisdiction to enforce, implement, and interpret both the Sale Order and the APA and to resolve any disputes arising therefrom. See id. ¶ 4.
The Motion for Reconsideration requests that the Bankruptcy Court amend the Sale Order to determine the parties’ contractual obligations under the APA—but amending the Sale Order is the wrong way to go about doing this. If Acute is right about the parties’ closing obligations under the APA, amending the Sale Order would have no effect because the parties’ closing obligations are already set by the APA. If Acute thought Debtors breached the APA, it could simply ask the Bankruptcy Court to enforce the APA pursuant to the Sale Order. See id.
In other words, the Motion for Reconsideration is a square peg in a round hole. It seeks relief that should have been sought through a motion to enforce. Tellingly, the Motion for Reconsideration does not articulate a basis for the requested relief under Rule 59 or 60. Indeed, it only recites the relevant standard under Rule 60 and does not explain how either Rule 59 or Rule 60 provides a basis to vacate the Sale Order to determine the parties’ contractual obligations. It provides a long narrative of the parties’ dispute, but it does not attempt to explain how these alleged facts justify amending the Sale Order. Nor does it state how the Bankruptcy Court should amend the Sale Order—only that the Bankruptcy Court should determine when and under what circumstances closing must occur under the APA. Acute‘s difficulty in explaining why the requested relief is appropriate under either Rule 59 or Rule 60 further underscores that a motion
Acute‘s problem is with the parties’ contractual obligations under the APA, not with the Sale Order itself—as Acute‘s own briefing recognizes. See First MTD Resp. at 1 (“This appeal concerns complex and difficult contractual agreements between the parties.”); Mot. For Recons. ¶ 26 (arguing that SFBP‘s closing demand was “in violation of the contractual obligations of the parties and in violation of the [Sale Order]”). Accordingly, the Court finds that the Motion for Reconsideration is not a proper motion under Bankruptcy Rule 9023 or Bankruptcy Rule 9024 and consequently did not toll the time to appeal the Sale Order. See Lucas, 729 F.2d at 1301–02. Therefore, Acute‘s appeal of the Sale Order is untimely and must be dismissed for lack of jurisdiction. See In re Williams, 216 F.3d at 1298.
B. Appeal of Order Denying Reconsideration
Although the First Appeal is untimely with respect to the Sale Order, it is timely with respect to the Order Denying Reconsideration because the Notice of Appeal was filed fourteen days after the Bankruptcy Court entered the Order Denying Reconsideration. See
Federal district courts have appellate jurisdiction in bankruptcy cases “from final judgments, orders, and decrees,”
Ordinarily, “[a]n order from a bankruptcy court approving the sale of assets represents a final appealable judicial order,” In re Daewoo Motor Co. Ltd., Dealership Litig., No. MDL-1510, 2005 WL 8005218, at *6 (M.D. Fla. Jan. 6, 2005) (citations omitted), and a properly filed motion for reconsideration under Bankruptcy Rule 9023 or 9024 will toll the time to appeal, see
It is not. The Motion for Reconsideration sought a determination of the parties’ contractual obligations under the APA. The Bankruptcy Court‘s Order Denying Reconsideration did not make any determination
The Court therefore concludes that the Order Denying Reconsideration was interlocutory. The Federal Rules of Bankruptcy Procedure require that an appeal of a bankruptcy court‘s interlocutory order must be accompanied by a motion for leave to appeal.
Because Acute has not filed a motion for leave to appeal, the Court treats the First Notice of Appeal as a motion for leave to appeal an interlocutory order and denies it. A motion for leave to appeal under
None of the grounds for permitting interlocutory appeal are present here. First, the Order Denying Reconsideration does not present a “controlling issue of law.” “To satisfy this portion of the standard, the movant must demonstrate that there is a question of law, and it is controlling.” In re Pac. Forest Prods. Corp., 335 B.R. at 919 (emphasis in original) (citing Ahrenholz v. Bd. of Tsr. of Univ. of Illinois, 219 F.3d 674, 675 (7th Cir. 2000)). The “issue of law” must be one that “deals with a question of ‘pure’ law, or matters that can be decided ‘quickly and cleanly without having to study the record.‘” In re Pac. Forest Prods. Corp., 335 B.R. at 919
Second, the Court only needs to analyze whether there is a substantial ground for difference of opinion among courts when the underlying issue is on a controlling issue of law. See Samsung Semiconductor, Inc. v. AASI Liquidating Tr. ex rel. Welt, No. 12-23707, 2013 WL 704775, at *5 (S.D. Fla. Feb. 26, 2013) (“If the court finds that a matter raises a controlling question of law . . . [it] must determine whether a substantial ground for difference of opinion exists as to that question.”). Because the Order Denying Reconsideration does not present a controlling issue of law, there is no need for the Court to consider the second prong.
Third, there is no indication that immediate resolution of the issue would materially advance the ultimate termination of the litigation. See McFarlin, 381 F.3d at 1259 (explaining that resolution of an issue materially advances the ultimate termination of the litigation when it “would serve to avoid a trial or otherwise substantially shorten the litigation.”).
Because the Order Denying Reconsideration was not a final order and there are no grounds to grant leave for interlocutory appeal, the Court does not have jurisdiction over Acute‘s appeal of the Order Denying Reconsideration. See
II. Second Appeal
The Second Appeal concerns the Bankruptcy Court‘s Confirmation Order. ECI argues that Acute does not have standing to appeal the Confirmation Order and waived its arguments on appeal because it did not attend the Confirmation Hearing and did not object to the Confirmation Order when it had the opportunity to do so before the Bankruptcy Court. See generally Second MTD.
Acute seeks to Appeal the Confirmation Order because it contains a third-party release and injunction that it argues is unlawful following the Supreme Court‘s decision in Harrington v. Purdue Pharma L.P., 603 U.S. 204 (2024). See Second MTD Resp. ¶¶ 11–21. In Purdue Pharma, the Supreme Court held that the Bankruptcy Code does not authorize “a release and injunction that, as part of a plan of reorganization under Chapter 11, effectively seeks to discharge claims against a nondebtor without the consent of affected claimants.” Purdue Pharma, 603 U.S. at 227. Although the third-party release in the Confirmation Order—unlike the release at issue in Purdue Pharma—allows non-debtors to opt-out, Acute argues that this opt-out release still runs afoul of Purdue Pharma‘s holding because it enters the release by default in the absence of objection and is therefore nonconsensual.
Acute brings these arguments for the first time on appeal even though it
In order to appeal a bankruptcy court order, an appellant must demonstrate not only that it has constitutional standing, but also that it is a “person aggrieved” by the bankruptcy order, a prudential requirement derived from the Bankruptcy Code of 1898.3 See In re Ernie Haire Ford, Inc., 764 F.3d 1321, 1324 (11th Cir. 2014). Although the person aggrieved requirement is often described as a standing requirement, this is something of a misnomer because the person aggrieved doctrine, unlike constitutional standing, “does not speak to a court‘s subject-matter jurisdiction.” In re Ernie Haire Ford, Inc., 764 F.3d at 1325 n.3. Rather, the person aggrieved doctrine “tells us which parties may appeal from a bankruptcy court order.” Id. Because bankruptcy proceedings “often involve numerous creditors who are dissatisfied with any compromise that jeopardizes the full payment of their outstanding claims against the bankrupt,” bankruptcy law developed the “person aggrieved” doctrine as a “special rule[ ]” that “limits the right to appeal a bankruptcy court order to ‘those parties having a direct and substantial interest in the question being appealed,’ namely, those who are ‘directly, adversely, and pecuniarily affect[ed]’ by a bankruptcy court‘s order.” Id. at 1325 (quoting In re Westwood Cmty. Two Ass‘n, Inc., 293 F.3d 1332, 1335, 1337–38 (11th Cir. 2002)). “An order will directly, adversely, and pecuniarily affect a person if that order diminishes their property, increases their burdens, or impairs their rights.” Id. (quoting In re Westwood Cmty. Two Ass‘n, Inc., 293 F.3d at 1338). The person aggrieved doctrine therefore “restricts standing more
than Article III standing.” In re Bay Circle Props., LLC, 955 F.3d 874, 879 (11th Cir. 2020) (quoting In re Heatherwood Holdings, LLC, 746 F.3d 1206, 1216 (11th Cir. 2014)).
The Courts of Appeals are split as to whether attendance and objection in the underlying bankruptcy proceeding are prerequisites to fulfilling the person aggrieved standard. Compare In re Weston, 18 F.3d 860, 864 (10th Cir. 1994) (holding that attendance and objection at a bankruptcy court proceeding are prerequisites to being a person aggrieved), and Matter of Schultz Mfg. Fabricating Co., 956 F.2d 686, 690 (7th Cir. 1992) (same), with Matter of Point Ctr. Fin., Inc., 890 F.3d 1188, 1193 (9th Cir. 2018) (finding that failure to attend and object does not implicate whether a party is “aggrieved,” but may nevertheless result in waiver or forfeiture of the right to make certain arguments on appeal), and In re Urb. Broad. Corp., 401 F.3d 236, 244 (4th Cir. 2005) (“[D]efining
The Eleventh Circuit has considered but declined to answer whether objection and attendance are prerequisites to meeting the person aggrieved standard. See In re Fisher Island Invs., Inc., 778 F.3d 1172, 1197 (11th Cir. 2015) (“[W]e need not decide whether attendance and objection in the bankruptcy proceedings is a prerequisite for prudential standing in bankruptcy appeals.” (citation omitted)). In the face of a circuit split and with no clear guidance from the Eleventh Circuit, the Court likewise declines to answer whether attendance and objection in a bankruptcy proceeding is a prerequisite to meeting the person aggrieved standard because Acute‘s failure to attend or object dooms its appeal for an independent reason: forfeiture.4 Id. (noting that
an “appellate court can affirm on any ground supported by the record” (citing Big Top Koolers, Inc. v. Circus-Man Snacks, Inc., 528 F.3d 839, 844 (11th Cir. 2008))).
The Eleventh Circuit has “repeatedly held that an issue not raised in the district court and raised for the first time in an appeal will not be considered.” Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004) (internal quotation marks omitted) (quoting Walker v. Jones, 10 F.3d 1569, 1572 (11th Cir. 1994)). This principle is no less true in bankruptcy appeals. See In re Lett, 632 F.3d 1216, 1226 (11th Cir. 2011) (noting that appellate courts generally should not “intrude upon the province of the bankruptcy courts below by reaching issues not brought before them, as ‘[b]ankruptcy cases are to be tried in bankruptcy court.‘” (quoting In re Air Conditioning, Inc. of Stuart, 845 F.2d 293, 298 (11th Cir. 1988))). Thus, a district court retains “discretion [whether] to resolve an issue not decided in the Bankruptcy Court if the record thoroughly presents the issue” but “if the record reflects an issue was presented in a cursory manner and never properly presented to the Bankruptcy Court, the issue is not preserved for appeal.” Id. at 1229 (quoting In re Monetary Group, 91 B.R. 138, 148 (M.D. Fla. 1988)).
Here, it is undisputed that Acute did not attend the Confirmation Hearing or object to the Confirmation Order. See Confirmation Order at 3 (noting attendees at Confirmation Hearing and indicating that there were no objections to confirmation); Confirmation Hearing Transcript, [ECF No. 31] at 4:1–3 (noting that no representative for Acute was present at the Confirmation Hearing).
Nevertheless, because an appellate court‘s power to hear a new argument
an argument first made on appeal . . . is ‘left primarily to the discretion of the courts of appeals, to be exercised on the facts of individual cases.‘” (quoting Singleton v. Wulff, 428 U.S. 106, 121 (1976))). The Eleventh Circuit has recognized five “exceptional” circumstances where an appellate court may exercise its discretion to hear issues raised for the first time on appeal:
First, an appellate court will consider an issue not raised in the district court if it involves a pure question of law, and if refusal to consider it would result in a miscarriage of justice. Second, the rule may be relaxed where the appellant raises an objection to an order which he had no opportunity to raise at the district court level. Third, the rule does not bar consideration by the appellate court in the first instance where the interest of substantial justice is at stake. Fourth, a federal appellate court is justified in resolving an issue not passed on below . . . where the proper resolution is beyond any doubt. Finally, it may be appropriate to consider an issue first raised on appeal if that issue presents significant questions of general impact or of great public concern.
Access Now, 385 F.3d at 1332 (quoting Wright v. Hanna Steel Corp., 270 F.3d 1336, 1342 (11th Cir. 2001)).5
None of these exceptional circumstances are present here. Resolution is certainly not “beyond any doubt.” Id. (quotation omitted). Indeed, in the wake of Purdue Pharma, federal courts around the country have split on whether its holding forbids the confirmation of a liquidation plan with an opt-out third-party release. Compare, e.g., In re Lavie Care Centers, LLC, No. 24-55507-PMB, 2024 WL 4988600, at *17 (Bankr. N.D. Ga. Dec. 5, 2024) (finding that an opt-out third party release “provided a consensual third-party release” permissible under Purdue Pharma), with In re Smallhold, Inc., 665 B.R. 704, 719–20 (Bankr. D. Del. 2024) (finding that after Purdue Pharma, “it is no longer appropriate to require creditors to object or else be subject to (or be deemed to “consent” to) . . . a third-party release”). Nor is resolution of Acute‘s substantive arguments a “pure question of law,” Access Now, 385 F.3d at 1332 (quotation omitted), as even those courts that have found an opt-out third party release to be consensual have limited their findings to the particular facts and circumstances of the plan being confirmed. See In re Lavie Care Centers, LLC, 2024 WL 4988600, at *17 (“[T]his Court declines the opportunity to create a universal test or set of standards for approving all opt-out third-party release plans, as the analysis in each case must be fact and case specific.”). Nor is
Acute also had ample opportunity to raise whatever objections it might have had before the Bankruptcy Court. Acute concedes that it received electronic filings in the Bankruptcy Case via the Bankruptcy Court‘s CM/ECF system, see Second MTD Resp. ¶ 9, and Acute had no trouble participating in the Bankruptcy Case below, as evidenced by the First Appeal. The record also indicates that Acute was aware of the Confirmation Hearing and specifically decided not to attend or object; indeed, Debtors’ counsel spoke with Acute prior to the Confirmation Hearing and Acute informed Debtors’ counsel that Acute would not attend the Confirmation Hearing. See Confirmation Hearing Transcript at 4:3–8 (“[The Bankruptcy Court:] I do not see [counsel for Acute] or anyone from Acute here. You‘re welcome to give me an update on that if it‘s at all relevant to confirmation. If not, let‘s proceed. [Counsel for Debtors]: Very briefly. I did speak to [counsel for Acute] this morning, he said he was not going to attend.”).
Acute nevertheless protests that the Court should get to the merits of its Purdue Pharma argument because Acute had “no standing to vote on confirmation of the Plan” and therefore had no meaningful opportunity to oppose the third-party release, rendering it nonconsensual. Second MTD Response ¶ 14. This argument fails for at least three reasons.
First, Acute confuses its right to vote on the Plan with its right to object to the Plan. Acute is correct that it had no right to vote on the Plan because it is not the holder of an “allowed” claim under section 502 of the Bankruptcy Code. See
If Acute means to argue that it was not a party in interest under § 1109(b) or that it did not have Article III standing to object to the Confirmation Order, that contention
Second, Acute conflates two different questions: whether it waived its arguments on appeal and whether it consented to the third-party release. The first question is procedural. The second goes to the merits of Acute‘s Purdue Pharma argument. Again, had Acute objected to the Confirmation Order, it would have preserved its arguments on appeal regardless of whether the Bankruptcy Court agreed with Acute or entered the Confirmation Order over Acute‘s objection.
Third, if Acute‘s argument is that it lacked standing to object (and not merely that it could not vote), that argument is self-defeating. If Acute did not have standing to object to the Plan in the first place under the capacious standard set by § 1109(b), it is not clear how Acute could meet the requirements of Article III standing or the even more rigorous “person aggrieved” standard on appeal. See, e.g., In re Glob. Indus. Techs., Inc., 645 F.3d 201, 209 n.23 (3d Cir. 2011) (explaining that the person aggrieved standard is “more stringent” than “party-in-interest” standing in the underlying bankruptcy proceeding). Consequently, Acute‘s argument that the Court should consider the merits of the Second Appeal because it could not object to the Plan is wholly unmeritorious.
Lastly, the Court notes that Acute seems to view the Second Appeal as an opportunity to raise all its grievances throughout the Bankruptcy Case, none of which were presented to the Bankruptcy Court in opposition to the Confirmation Order:
To properly adjudicate the issues involving the instant appeal, the Court must be fully informed of the underlying process and events leading to this point. Appellant Acute‘s brief to be filed in this appeal, will expose, along with the proofs, the full details about Appellees’ rigged and failed auction process, how the price was subsequently shifted from the estate assets to the non-debtor assets, and how the process by bifurcating the sale of the assets lead [sic] to shifting of the value of the assets to the non-debtors assets. . . . These events need to be fully briefed, and when done so, it will become self-evident that the Appellees and non-debtors, including those that benefit from the third party nondebtor releases contained in the Plan, have not acted equitably. Allowing the third party releases to stand under these circumstances would be a travesty and extremely prejudicial to the property and legal rights of Appellant Acute. The Court should look at the full course of dealings, the innocence or intent of the parties, and whether they have acted in bad faith. Only after that analysis can
the Court determine if the third party non-debtor release is appropriate.
Second MTD Resp. ¶ 22. Regardless of whether Acute is correct that all of this context is necessary to decide the Second Appeal—a proposition that seems doubtful at best—this argument makes clear that hearing the merits of the Second Appeal will force the Court to wade into a complicated morass of factual issues not properly presented in the record and not briefed before the Bankruptcy Court. This is exactly why appellate courts generally do not review questions presented for the first time on appeal absent exceptional circumstances. See Access Now, 385 F.3d at 1331 (“If we were to regularly address questions—particularly fact-bound issues—that [a district court] never had a chance to examine, we would not only waste our resources, but also deviate from the essential nature, purpose, and competence of an appellate court.”).
Acute forfeited its arguments by failing to raise them before the Bankruptcy Court and this case does not presents circumstances “extraordinary enough for [the Court] to exercise [its] discretion and excuse the forfeiture.” See Campbell, 26 F.4th at 875. Accordingly, the Court must dismiss the Second Appeal. See Access Now, 385 F.3d at 1335 (dismissing appeal where the appellant forfeited all substantive arguments) (citations omitted).
CONCLUSION
Accordingly, for the reasons stated herein, it is hereby
ORDERED AND ADJUDGED as follows:
- Appellee‘s Motion to Dismiss First Appeal, [ECF No. 5], and Motion to Dismiss Second Appeal, [ECF No. 25], are GRANTED. Appellant‘s First Appeal, [ECF No. 1], and Second Appeal, Acute, Inc. v. ECI Pharmaceuticals, LLC, Case No. 24-cv-62112 (S.D. Fla. Nov. 8, 2024), ECF No. 1, are DISMISSED.
- The Motion for Leave to Amend Sale Order, [ECF No. 6], is DENIED as moot without prejudice to seek leave to amend the Sale Order in the Bankruptcy Case.
- The Court retains jurisdiction over Appellee‘s first Motion for Sanctions, [ECF No. 25], and Appellee‘s second Motion for Sanctions, [ECF No. 33]. Per the Court‘s prior Orders, see [ECF Nos. 24, 37], Appellant shall file a single combined response to Appellee‘s first Motion for Sanctions, [ECF No. 25], and Appellee‘s second Motion for Sanctions, [ECF No. 33], on or before June 25, 2025. Appellant may file a single combined reply on or before July 2, 2025.
- The Clerk is directed to CLOSE this case. All deadlines are hereby TERMINATED and any remaining motions other than Appellee‘s first Motions for Sanctions, [ECF No. 25], and Appellee‘s second Motion for Sanctions, [ECF No. 33], are DENIED as moot.
DONE AND ORDERED in Miami, Florida, this 18th day of June, 2025.
RODOLFO A. RUIZ II
UNITED STATES DISTRICT JUDGE