In Re Continental Airlines

against al action discrimination suffered Rather,

by complaint alleges only Dici. her In re CONTINENTAL AIRLINES. direct incidents of Brison’s harassment.

Such incidents are not covered the terms Tennessee, N.A., NationsBank of Na f/k/a 955(e). § As one court has said con- Tennessee, tionsBank of as Collateral struing nearly provision identical Equipment Trustee under a Secured In Jersey Against Law Discrimination: New Agreement denture and Lease dated course, might argue, One [the both (“NationsBank”); March New employee employer] “in- share the Jersey Bank, National as successor discriminatory tent” to create a atmo- merger Bank, N.A., to Constellation believe, however, sphere. We that the em- Elizabeth, National State Bank of f/k/a ployer’s sufficiently reaction is divorced N.J.; Savings Bank; Harris Trust And employee’s from the conduct that there is and Boatman’s First National Bank of community purpose no between them. Oklahoma, First, Second and Third non-supervisory employee engages A who Priority Equipment Secured Certificates discriminatory conduct cannot be said to (the thereunder, respectively employer respond. “intend” that his fail to and, collectively “Series Trustees” with NationsBank, “Trustees”), Appel Tyson Corp., v. CIGNA F.Supp. (D.N.J.1996). lants. cannot, however, grant summary We No. 94-7748.

judgment to Monaco on PHRA claim. Dici’s supervisor, proper As Dici’s Monaco is a Appeals, United States Court of 955(e) § might defendant under be hable Third Circuit. aiding abetting discriminatory prac Argued Sept. 1995. tices, which, true, pleaded as Dici has facts if liability impose could violations Reargued May In Banc 1996. example, paragraph PHRA. For 14 of the July Decided states, complaint, “[although Sergeant Dici Monaco knew or should have known that the being subject

Plaintiff was to ... harassment

..., repeatedly prompt he refused to take

action to end the harassment directed at conduct, proven,

Plaintiff....” Such if aiding abetting.

would constitute

However, because Monaco cannot be held VII,

hable under Title there exists no inde- jurisdictional

pendent basis to maintain a against

PHRA claim Monaco in federal court.

We, therefore, leave it to the district court to jur- supplemental

decide whether to exercise (1994)

isdiction under U.S.C. over PHRA against

Dici’s claim Monaco.

CONCLUSION reasons, foregoing

For the affirm in

part, part, reverse in remand grant summary judg-

district court the

ment in favor of Appellees.

555

OPINION OF THE COURT SLOVITER, Judge. Chief

INTRODUCTION appeal by Before the in banc court (Collateral NationsBank Tennessee Trust- ee) Bank, Jersey and New National Harris Bank, Savings Trust and and Boatman’s (First, First National Bank of Oklahoma Sec- ond, Priority Equipment and Third Secured Trustees), collectively Certificate who are re- “Trustees,” opinion ferred to this as the by from the order entered the district court Chapter bankruptcy proceeding in the Airlines, dismissing Continental Inc. as appeals “moot” three the Trustees. appeals Those were from orders of the bank- 1) ruptcy denied the Trustees’ 2) adequate protection, Renewed Motion for confirmed Continental’s revised second 3) joint plan reorganization, amended Gary (argued), S. Jacobson Nicholas J. denied the Trustees’ motion for the establish- Scotti, DiCarlo, Kelley, Drye $123,479,287. & James G. deposit ment of a cash Warren, City, essence, Appellant Appellant pay- York for Nati- New Trustees seek an claim of ment for asserted administrative onsBank of Tennessee. against approximately million the reor- $117 Baume, DeLucia, T. Hal L. Louis Norman ganized company. Appellee, Continental Peer, Wilentz, Spitzer, Goldman & Wood- Airlines, Inc., defends the district court’s de- NJ, bridge, Appellant Jersey Na- for New cision dismiss the Trustees’ tional Bank. alternative, argues, underly- in the Elliott, Jr., Richard G. Daniel J. De- ing rulings court were Franceschi, Richards, Layton Finger, & Wil- correct as a matter of and fact. law DE, mington, Appellants for Harris Trust I. Savings Bank First Na- and Boatman’s tional Bank of Oklahoma. FACTUAL AND PROCEDURAL HISTORY (argued), P. T.

Richard Schifter Andrew Karron, Bernstein, Chapter bankrupt- Michael L. Kari M. Des- filed its Porter, DC, Washington, Appellant galier, cy petition Arnold & on December Jones, Brady, Young, Trustees serve as successor Collateral Laura D. Robert S. holders who Series Trustees certificate Conaway, Taylor, Wilmington, Stargatt & provided operating cap- had Continental with DE, Appellee. were at the ital. The certificates secured Malone, Carlin, Michael J. Steven B. Bat- petition by pool of 29 time of Continental’s LLP, Fowler, City, York for amicus tle New engines, ad- commercial aircraft with and 81 Deo, Crummy, Griffinger curiae Del & Vec- advised, which, jet engines ditional we were chione, P.C. op- about one-third of serviced Continental’s Code, Bankruptcy erating fleet. Under the SLOVITER, Judge, Before: Chief ALITO most of possession, debtor which has SEITZ, Judges. Circuit rights, powers, functions and duties of trustee, 1107(a), “may § use see 11 U.S.C. SLOVITER, Judge, Before: Chief ordinary course property of the estate BECKER, STAPLETON, MANSMANN, hearing.” 11 without notice or a of business GREENBERG, SCIRICA, COWEN, 363(e)(1). § U.S.C. NYGAARD, ALITO, LEWIS, McKEE, 363(e) SEITZ, provides: Judges. Section SAROKIN and Circuit automatic to move for relief from the Notwithstanding any provision other creditor activities, repos- such as stay of delineated time, section, request collateral, by section effected session property used entity an interest that has 362(a) Code. possession], ... the [debtor hearing, pro- September the Trustees also without a shall On with or protec- adequate motion for filed a renewed ... is neces- or condition such use hibit alleged decline in the collateral’s tion for such sary provide adequate protection of September period for the after value interest. original argued 1991 motion was when 363(e). 11 U.S.C. (“Renewed Motion”). various There were hearings Renewed Motion between on the 21,1991, Fidelity February First Bank On 5, 3, February 1992 and November Jersey, predecessor to NationsBank of New period, the end of that the Trustees Toward Trustee, along filed a motion as Collateral 29,1993, January asking filed a motion dated many and finan- with other aircraft lessors a de- bankruptcy court to establish cash alia, alleging, a decline in the ciers inter million, posit of of which $117 some $123 seeking adequate of the collateral and value alleged to market million was attributable 363(e). First Fideli- protection under section decline, preserve the Trustees what motion, ty withdrew from this but on later priority claimed was the administrative sta- 28, it, predecessors of the June 1991 and the adequate protection tus of the Trustees’ Trustees, Appellant filed a motion other emerged bankrupt- claim if from Continental bankruptcy court seeking similar relief. The cy reorganized (“Deposit Mo- as a debtor tion”). evidentiary hearing on the motion held an 6, through September September 3 from During period reorganize this efforts to the Trustees’ assertion that 1991 limited 9, continued. November 1992 the debtor On adequate protection

they were entitled to entered into an Investment Continental post- a collateral’s payments (Air as result Agreement under which the Investors Canada) petition in market value. Partners, decline agreed L.P. and Air million in committed to an investment of $450 alia, argued, that be Continental inter entity complex reorganized under a ar- the Trustees had not filed a motion for cause subject rangement and to certain conditions. stay, they relief from the automatic were not conditions, seq. App. at 391 et One of those protection adequate to an award of entitled proceeding, and the one most relevant 363(e). under section The motion remained amount and nature of was a limitation on the August pending court until expense claims liabilities and administrative 27, 1992 when the court ruled on the Trust by required to be assumed or attributable to motion, rejecting legal ar reorganized company. App. ees’ Continental’s 408. On fact, 13, January filed a second gument finding as a based on the 1993 Continental (“Plan”) joint plan amended Books,” by publication a com “Blue issued Agree- which referenced Investment aircraft, pany appraises market alia, provided, Plan inter for ment. The collateral had not declined dur value of the assumption “allowed administrative ing period at issue in the motion. In re by reorganized claims” Continental. Airlines, Inc., B.R. Continental App. at 656. (Bankr.D.Del.1992) Continental [hereinafter hearing The confirmation was held for I]. days during period number of March Approximately two weeks before the bank- through April parties 1993. The ruptcy opinion, the Trust- court issued April concerning reached a settlement on ees filed their first motion under section adequate protection main- due use and/or 362(d) to lift the Code Continental, by tenance of the collateral Motion”). (the stay (“Lift>-Stay automatic relating impair- See no issue to use decline 362(d). permits § This a ment in value attributable to the use U.S.C. section 6,May possession) is be- On 1993 Continental filed a motion the debtor collateral However, did not settle the district court dismiss the Trustees’ fore us. moot, protection adequate appeals claims which the district the Trustees’ court granted in market value. based on decline on December 1993. The Trust- rehearing ees filed a motion for and reconsid- of the confirmation hear At the conclusion light Frito-Lay, eration in of the decision in 16, 1993, bankruptcy court ing April (In Co., Chateaugay Inc. v. LTV Steel Inc. re Deposit Motion and the Renewed denied the (2d Cir.1993) Corp.), 10 F.3d 944 [hereinafter Motion, published opinion, the bank II], Chateaugay denied. necessary that it was for ruptcy court held timely Trustees then filed a notice of sought relief from the the Trustees to jurisdiction appeal. pursuant This court has adequate entitled to automatic to be 158(d). to 28 U.S.C. decline; protection market value Trustees were not entitled to panel argument therefore the A of this court heard adequate protection due to market decline September opinion 1995 and issued an Motion, Lift-Stay of their until after the date that affirmed the district court’s order 1992; August and that no decline i.e. petitioned two-to-one vote. The Trustees of the collateral had taken rehearing, the market value and the banc court voted to In re place since that date. appeal. rehear the Under this court’s Inter- (Bankr.D.Del. Airlines, Inc., Procedures, B.R. 176 Operating opinion nal the 1993) 7, Also on February [hereinafter II]. Continental panel issued 1996 was with- bankruptcy signed April the drawn. Order. The court made a Confirmation findings conclu

series of detailed of fact and II. underlying sions of law the Confirmation Or DISCUSSION throughout der which will be referred opinion pertinent. when A. April On 1993 the Trustees filed three This court has not addressed the interest- appeal notices of to the district court from challenging questions ing and raised bankruptcy court’s denial of the Renewed bankruptcy holding that court’s a creditor Protection, Adequate denial of Motion for stay a motion to lift the automatic must file Motion, Deposit confirming its order prerequisite seeking adequate protec- as a later, days filed a the Plan. Two Trustees argue bankrupt- that tion. The Trustees partial stay consummation motion for cy as a matter of law and that court erred (“Conditional Motion”), Stay Plan but can decide the issue de novo even this court court, that motion in the district which filed though by the district it was not reached bankruptcy to the court. On referred them They argue that court. further the bank- 26, 1993, stay April that the Trustees filed ruptcy finding that no dimi- court’s there was request court. Because nution in the market value of the Trustees’ available, judge was not they Lift-Stay their Mo- collateral after filed day hearing on the motion held the next was Finally, they clearly erroneous. court, stated, without in the district bankruptcy court as a argue that the erred analysis, the Trustees explanation denying their motion for the matter of law likely prevail appeal on their were deposit. of a cash establishment stay denied the because district Continental, appellee, post surprisingly, Not the Trustees were “unable to bond legal bankruptcy court’s satisfactory App. at 1755-56. defends to the Court.” both not any the Trustees could not then make effort to determination The Trustees did protection alleged any adequate claims emergency relief from this court. assert seek during period be- implementation of the market value decline impeding noWith confirmed, from the automatic fore moved for relief Plan which had now been that there had stay and its factual conclusion proceeded to close the transaction Investors value of no substantial decline by making promised investment. been (1992) 447, 449, 121 L.Ed.2d 313 Lift-Stay Motion was S.Ct. since the the collateral Green, 651, 653, 16 (quoting Mills v. 159 U.S. argues that in event the Finally, it filed. (1895)). 132, 133, An 40 L.Ed. 293 S.Ct. pro- adequate could not recover “merely a court appeal is not moot because of the collateral did the value tection because quo parties to the status cannot restore petition its value on the not decline below Rather, a court can fashion ante. when date, contends is the rele- which Continental relief,’ meaningful even if it ‘some form of measure. vant grievances of the only partially redresses the only if we reach these issues We would prevailing party, appeal is not moot.” district court erred satisfied were (In Group, Dev. Inc. re RTC v. Swedeland holding appeals the Trustees’ to were Inc.), Group, Dev. 16 F.3d Swedeland “moot,” decision as to which the (in (3d Cir.1994) banc) (quoting Church vigorously disagree. Mootness vel non of 12-14, 113 Scientology, 506 U.S. at S.Ct. closely appeals before the district court is 450). Thus, Paiewonsky in Isidor Associates from, to, indistinguishable if related Inc., Sharp Properties, 998 F.2d v. appeal to this court is question whether the (3d Cir.1993), concluded that because we moot, alludes to an issue which Continental impose at least one of the remedies could convenience, For we will refer its brief. thereby appellant, enumerated in the district court unless we state mootness relief,” provide it “some effective otherwise. Swedeland, also was not moot. See ap- does not contend at 559-60. That is not the issue this case. peals to the district court or to us were moot Instead, Continental invokes the broader sense, implicating the in the constitutional interpretation applied in bank- of mootness controversy requirement of Article case or cases, ruptcy often referred to as Newkirk, See, III, e.g., § 1. Preiser v. See, e.g., Manges v. mootness.” Seattle- 2334-35, 395, 401-02, 2330, 45 95 S.Ct. U.S. (In Manges), Nat’l Bank re 29 F.3d First (1975). L.Ed.2d 272 This is not a situation (5th Cir.1994), denied,- 1034, 1038-39 cert. Supreme analogous to those where the Court 1105, U.S.-, 1071 115 S.Ct. 130 L.Ed.2d appeals became moot determined Cos., (1995); Equip. Specialty In re 3 F.3d repealed, at issue was see because law (7th Cir.1993); 1043, 1048 Comm. Official Church, Baptist 404 v. Central Diffenderfer Aerospace Creditors LTV & Unsecured 412, 414-15, 574, 575-76, 92 S.Ct. 30 U.S. v. Comm. Unsecured Co. Official Defense (1972); subject L.Ed.2d 567 of the elec- (In LTV Steel Co. re Chateau Creditors of controversy longer campaign was no Cir.1993) (2d 322, gay Corp.), 988 F.2d 325 Zwickler, candidate, see Golden v. 394 U.S. I]; Chateaugay Rochman v. [hereinafter 109-10, 956, 960-61, 103, 22 89 L.Ed.2d S.Ct. (In Group Northeast Utils. Serv. re Public (1969); application 113 or the railroad whose (1st Co.), 469, Cir.), F.2d 471-72 Serv. 963 appli- withdrew that for tariffs was contested denied, 908, 304, 506 113 S.Ct. 121 cert. U.S. Lines, cation, Mechling Barge see A.L. Inc. (1992); L.Ed.2d 226 First Union Real Estate States, 324, 329-30, 82 v. United 368 U.S. (In Mortgage v. Assocs. Equity & Invs. Club (1961). 337, 340-41, 7 L.Ed.2d 317 S.Ct. (11th Assocs.), 1065, 956 F.2d 1069 re Club States, Cir.1992); Indeed, Supreme as has Central Southeast and Court recently explained, appeal Areas Pension Fund v. Central is moot Southwest (4th Inc., 92, only Transp., 95-96 sense if events have taken 841 F.2d Cir. constitutional 1988); Indus., 1140, place during pendency appeal In re AOV 792 F.2d (D.C.Cir.1986); v. Roberts “impossible grant for the court to 1147 Trone make ” (In Inc.), Farms, Farms, ‘any Inc. re Roberts effectual relief whatever.’ Church of (9th Cir.1981).1 States, 9, 12, 796-97 Under this Scientology v. United 506 U.S. F.2d Farms, stays pending appeal, "equitable to Roberts 652 F.2d 1. Because the doctrine often called Cir.1981). (9th accepted, Farms court is well there is little discus- But Roberts mootness” that the amendment to Rule 805 that made sion in the case law of its historical basis. The noted provision explicit requirement attempts to obtain a in order dissent to trace it from effectively challenge approving an order a sale former Rule which concerned doctrine, “equitable It moot- at 1038. is evident accepted widely recognized and ... appeal should inapt “[a]n held that description courts have ness” is an of the doctrine when, though even as moot be dismissed Nonetheless, past at issue here. since eases conceivably be fash could relief effective term, discussing in used that we use it ioned, would be implementation of that relief Therefore, it not further consid- them. does I, at 325. Chateaugay 988 F.2d inequitable.” appeal argue, as the dissent eration of this as a short- of the word “mootness” The use does, trap” “fallen into the that we have accom- cut for a court’s decision confusing fait with Article these considerations preclude should pli confirmation “equitable III termed mootness. Whether judicial proceedings has led to unfor- further doctrine, prudence no mootness” or see discussion confusion. In a trenchant tunate why part should reason the Third Circuit in decision of the Sev- of the issue a recent company circuits in their with our sister Circuit, noted that denominat- enth the court adoption scope doctrine. If limited in “equitable mootness” is ing the doctrine as cautiously applied, provides this doctrine Indus., 20 F.3d misleading. In re UNR whereby prevent the court can sub- a vehicle — (7th denied, -, Cir.), cert. U.S. parties. stantial harm to numerous (1994). 130 L.Ed.2d 115 S.Ct. Easterbrook, writing for the Judge challenged have not the via- The Trustees “[tjhere big is a difference between stated: equitable bility of the doctrine of mootness or mootness) (real inability to alter the outcome prudential application of considerations (‘eq- unwillingness to the outcome alter eases, nor have cited to a mootness’). Using one word for two uitable rejects concept. circuit that case confusion.” Id. concepts breeds different Instead, they rely heavily on a decision most Thus, original). although the (emphasis in holding that even of the Second Circuit concept of applications discussions though reorganization plan for the bank- eases that court “mootness” confirmed, rupt Corporation LTV had been encompassed what is referred previously had challenging tax lessors mootness,” see to elsewhere administra- plan’s give failure to their claims 1048; In re An Specialty Equip., 3 F.3d Chateaugay priority not moot. tive See (7th dreuccetti, Cir.1992), Cir.1993). (2d II, Significantly, 10 F.3d 944 stated it would the court UNR Industries Chateaugay quarrel from the II did not ‘equitable mootness’ the court now “banish Instead, (local) doctrine, 20 F.3d at 769. merely application lexicon.” in its with the continued, ask not whether “[w]e court fact, in v. Best Products that case. RTC otherwise, moot, ‘equitably’ case (In Co.), 26, 68 F.3d 29 re Best Products Co. upset of prudent it is whether (2d Cir.1995), case from the a more recent Id. reorganization at this late date.” Circuit, again empha- court once Second I language Chateaugay that even sized “prudential” “equitable” or These moot in the though appeal may an not be unique to focus on “concerns considerations Constitution, it III of the Manges, F.3d sense of Article bankruptcy proceedings.” 29 change occur as to ren- simply of circumstances to good purchaser a codifica- sive a faith (citing inequitable to consider the existing for this court case law. See id. at 796 A der it tion of (In added). Abingdon (emphasis Holding Corp. appeal.” re v. O’Donnell of the Id. & H merits 588, (4th Cir.1976), Realty Corp.), F.2d 590 the “touchstone 530 Farms characterized as Roberts Advisory Committee’s precedent principle” which in turn cited decision for this the earlier Trustee, proposed amendment which so stat-' Note to the ed). Valley v. 609 National Bank Arizona where the court "held of Cir.1979), (9th 1274 F.2d coupled stays a with that the failure to seek Further, Roberts Farms made clear justi- change of circumstances substantial equitable factors was an "entire- consideration of equity.” fy appeal lack of dismissal ly separate independent ground dismiss- and Farms, the dis- 652 at 798. Thus Roberts F.2d court stated that 652 F.2d at 798. The al.” suggesting later cases consider- errs in sent diligently neglected "Appellants have failed quite represented "a sub- ing equitable factors pursue to obtain a their available remedies the doctrine enunciated Bankrupt- extension” to objectionable stantial stay orders of the applied permitted comprehen- in Roberts Farms. cy such a Court and have 560

may bankruptcy argues moot in cases dissent that the cases cit be deemed inapposite considerations.” ed above the district because because appellate court acted as an court and that we generally stated that we We have exercise plenary should therefore use review. How plenary review of a district court’s decision ever, proposition appellate that when an Swedeland, 16 on mootness. See F.3d balancing court a lower court’s reviews Ctr., 559; Northeast Women’s Inc. v. McMo factors, prudential so does under abuse (8d Cir.1991); nagle, 939 F.2d 61 Interna long of discretion standard as as the factors Kelly, tional Bhd. Boilermakers v. inappropriate considered are not as a matter Cir.1987). (3d However, F.2d none fields, general applicable of law is a in all one determination, of those cases involved like excluding bankruptcy. As Fifth Cir here, appeal the one we review that an fol- cuit noted in a case: lowing bankruptcy reorgani- a consummated case, particular reviewing In this we are equitable zation be dismissed for should the decision of the district court its prudential though reasons even some effec- capacity appellate as an court. Several Surprisingly, tive relief is available. we have govern different standards of review our cursory more than a seen little few refer- decision, depending on the nature of the ences to the standard of review in the eases holdings disputed reviewed. Where the applying from other circuits this doctrine. holding involves a matter is within the Indus., (district See AOV 792 F.2d at 1148 discretion, district court’s we will affirm power court’s to dismiss as moot “dis- judgment acting a district court Assocs., cretionary”); Club 956 F.2d at 1069 appellate role unless the has novo, (legal determinations reviewed de clearly abused its discretion. findings court’s factual reviewed error). for clear Co., Inc., Exploration Matter HECI (5th Cir.1988) (citations F.2d omit- Because the mootness determination ted). discretionary we review here involves bal ancing equitable prudential factors B. rather than the limits of the federal courts’ Factors that have been considered III, authority using ordinary under Article in determining courts whether it would be principles review we review that decision equitable prudential to reach the merits of generally for abuse of discretion. Gener Cf (1) bankruptcy appeal include whether the Corp. al Glass Indus. v. Monsour Medical reorganization plan substantially has been (3d Found., Cir.1992) (ab 973 F.2d (2) consummated, whether has been stention determination reviewed under abuse (3) obtained, requested whether the relief standard); Express, of discretion Bermuda rights would affect the not before (3d Cir.) M/V Litsa, N.V. v. (4) requested whether the relief (balancing equities application involved (5) plan, would affect the success of the discretion), of laches doctrine reviewed for abuse of public policy affording finality to bank denied, 819, t. 493 U.S. 110 S.Ct. cer ruptcy judgments. Manges, See 29 F.3d at 73, (1989); White, 107 L.Ed.2d 40 Bennett v. 1039; Rochman, 963 F.2d at 471-72. The (3d Cir.) 1395, (scope 865 F.2d 1402 of a Trustees have not taken issue with our iden discretion), remedial order reviewed for abuse tification of these factors. denied, 920, rt. 492 U.S. 109 S.Ct. ce 3247, (1989); Although 106 L.Ed.2d 593 Evans v. Bu giv- these five factors been chanan, (3d Cir.) (in varying weight, depending 555 F.2d 378-79 en particu- on the banc) denied, (same), circumstances, cert. 434 U.S. 98 lar the foremost consideration (1977). 235, 236, S.Ct. 54 L.Ed.2d 160 A reorganization plan has been whether the has may particular legal substantially also case raise been consummated. This is es- and/or interspersed pruden pecially factual issues with the so where the involves ones, transactions, Rochman, tial applicable and then the review intricate see 963 F.2d standard, erroneous, plenary clearly (performance plan or will at 473-74 under involved apply. complex arrangements”); “numerous Roberts by the court because “many following approval (plan Farms, involved F.2d at stay. failed to obtain the Trustees had and re- transactions” involved intricate “would knock plan’s confirmation versal challenge not that there do The Trustees such transactions under” props out from the by De- consummation had been substantial uncontrollable unmanageable, an and “create district dis- when the court cember Court”), or for the situation They suggest appeals as moot. the missed on the have relied investors where outside object the is not to disturb that as their Manges, 29 F.3d plan, see of the confirmation only get payment from reorganization, but “protects the (equitable mootness at 1039 for their ade- reorganized Continental the parties who third of non-adverse interests by mar- claim measured the quate protection reviewing who court but the are not before during collateral ket value decline plan as im- upon the in reliance have acted upon line of cases bankruptcy, the Indus., 20 F.3d at plemented”); UNR cannot inapplicable. is We relies Continental persons who the interests (“[b]y protecting rejection of the Trustees’ agree, the because reorga- plan in reliance on acquire assets by bankruptcy court was inextrica- claim the price the the es- nization, increases a court implementation of bly intertwined with ante, produces ex and thus tate can realize Indus., 792 reorganization. AOV See aggregate”); for creditors benefits (to mootness, court evaluate F.2d at 1148 Rochman, (reorganization at 474 claim, each individual test- must “scrutinize 100,000 financing in irom billion involved $1.5 granting relief feasibility of ing the (“a Assocs., sources); F.2d Club reorgani- potential impact on the against its investors, parties to were not who whole”). number Thus, the as a Trust- zation scheme case, to the new funds had committed the effect of the substantial ees cannot avoid of re- expectation with ‘reemerged Club’ reorganization plan so consummation invest- on their ceiving preferred return readily. ments”). agrees as Continental Inasmuch pru- is defined consummation” mootness but “Substantial issue is constitutional “(A) of all mootness, arguendo as: transfer Bankruptcy Code assume we will dential proposed substantially property all of or total consum- substantial that even after (B) transferred; assump- effective by plan reorganization, some mation of its by the successor available for the the debtor have been relief would or of the business they appealed debtor under at the time Trustees’ claim substantially court, all of management of all or to this court. and on the district (C) plan; dealt with properly banc Even before assumption. under It is challenged of distribution commencement has not 1101(2). In such instanc- light of the substan- plan.” 11 U.S.C. matter quite another finality of es, irrevocable, strong public tial, change interest status indeed reorganizations particularly to determine confirmation quo that followed the court compelling. prudent for have been that it would Trustees’ claim. merits of the to reach the dismissed court The district un- court had before district For the conclu- it as “moot” based appeals to plan, and bankruptcy reorganization stayed sions, opinion December in its dated forth set prudential de- many have based courts consummation that substantial challenges to consider cisions decline occurred, had had Investors the Plan ground that on the orders million investment already made their $450 of a consummation substantial there has been entity, all elements reorganized into the upon an in reliance reorganization plan of Plan, to the unse- except distributions See, e.g., unstayed order. confirmation creditors, completed, a and had been cured Rochman, 475. F.2d at Plan confirming the of the order reversal I, al- noted that Chateaugay the court In into bank- back likely put only requires a Bankruptcy Code though the also noted The court ruptcy. App. at 1873. circumstances, in limited appeal stay pending the Plan implemented had that Continental procedure there is a under in favor Rule of the district court’s declination to preserve quo 8005 to seek to the status delve into appeal. the merits of the Trustees’ party appeals seeking without “[t]he who to argue The Trustees this court has protection avail himself of that does so at his stay held that failure to obtain a does not own risk.” 988 F.2d at 326. And in In re necessarily appeal render an moot. The observed, Manges, the court under the de- they cases to apposite. which refer are not scriptive “Halting Runaway title Train: one, Ltd., In In re Joshua Slocum Stay,” many the Motions to that “in of the (3d Cir.1990), the issue was the narrow bankruptcy eases in appeals which were dis- power bankruptcy one of the of the court to moot, appellants missed as failed to seek paragraph excise a from a shopping center stay.” a 29 F.3d at 1039. lease. There is no indication Slocum that seeking stay may Even the of a not be there had been plan confirmation of a enough. appellants in In re UNR In during appeal. before or sought stay, dustries had a albeit unsuccess In the more recent case to which the fully, every nonetheless, opportunity; at refer, Stores, Megafoods Inc. v. noted, stay sought, stay “[a] not a (In Flagstaff Realty Flagstaff Assocs. re Re- denied, sought equally imple lead to the Assocs.), (3d alty Cir.1995), 60 F.3d 1031 plan mentation of reorganization.” appeal presented also a narrow landlord-ten- 770; Indus., F.3d at accord AOV 792 F.2d at issue, ant i.e. the effect of confirmation of the 1144, 1146-47. plan right landlord’s on a pursue tenant’s to Shortly after the confirmation of the Conti- appeal its of the court’s denial of Plan, nental Emergency the Trustees filed an recoupment its claim. In holding that it was Stay Motion for Conditional of Order Con- necessary stay the tenant to seek a firming pending appeal the Plan pursue right order to despite district court. The condition the Trustees interim, the confirmation in the we noted the sought stay in lieu of a was the establishment placing recoupment line cases and setoff in segregated million, of a account of $117 special stated, category a “although full amount adequate protection of their recognize importance maintaining claim, alternatively million, at least $22 integrity plans of confirmed from later at- they claim was the admitted decline in tack, unique permit these circumstances the value of the App. collateral. See at 1721. plan reopened readjusted.” to be Id. at response In to the district inquiry, court’s Thus, Flagstaff 1036. neither nor Slocum they they willing conceded that were not equitable prudential addressed the moot- post any bond. The district court never ness considerations at issue here. required supersedeas bond the amount $450,000,000, sug- the Trustees have High prudential on the list of consid fact, gested. the district court tried to erations taken into account courts consid ascertain the amount of bond that would be ering appeal following whether to allow an reasonable, and the general posi- consummated is the reliance they “merely tion was that fiduciary were parties, particular investors, third money their bondholders” and finality Manges, transaction. See suggested no lesser App. amount. at 1729. (“[t]he concept 29 F.3d at 1039 of ‘mootness’

Thus, as one of prudential the reasons for its from standpoint protects denying stay, order the district court interests of non-adverse third who n unwillingness noted the of the Trustees to reviewing are not before the court but who post satisfactory a bond App. to the court. upon have acted in reliance as im See, States, e.g., Rochman, Central plemented”); F.2d at 963 F.2d at 474-75 (appellant’s (similar). post Here, failure stay bond to replete the record is with finding appeal confirmation order basis for evidence the Investors relied on the moot). Because the post failure to unstayed bond court’s Confirmation get needed permitted making the consum proceed Order the decision to plan, mation of weighs heavily this factor close the transaction and that an essential subsequent court’s determina- to the relevant the was decision in that factor feasibility, adjudication of the the tion of ade- the Trustees’ disallowance court’s separate from claim itself was matter protection claim. quate App. at 1401. confirmation. that provided Plan of The “Al- pay would reorganized Continental the ultimately bankruptcy court took the The App. at Claims.” Administrative lowed Continental, by incorporat- urged approach 10.1). (Plan 5.5, Among the adminis- §§ its decision Order ing into its Confirmation the disputed at still claims were trative that adequate protection Trustees’ denying the hearing several were the confirmation time of feasibility determina- part of its claim. As claims, including, particular, labor large tion, pilots’ the found that neither explicitly large claims East- pilots, airline claims Eastern claims was entitled claims nor Airlines, for ade- Trustees’ claim and the ern Trust- priority, and that the administrative alleged market on protection based quate had no value protection claim adequate ees’ App. the collateral. decline of App. at 1549-51. claim. as an administrative that the Investors of the concerns One basis, was sub- it found there that that On their a condition of to be satisfied needed stantial, evidence and uncontested credible that total amount that the participation at con- payable claims that the administrative administra- paid for allowed have to be would pilots, excluding the claims firmation — by a such distorted few could be tive claims Eastern, be within the Trustees —would exposure, limit their large claims. To forth in the cap limit of the set specified the In- provided Agreement Investment 1548, noting Agreement, App. at Investment ar- with the proceed obligation vestors’ Trustees’ claim adjudications of that the alia, to the subject, inter rangements was “crucial to the Eastern claims were and the for administrative obligations payments and to consummate willingness of Investors specified than a being higher no claims App. at 1550. Financing Transaction.” amount, at 408. “cap.” App. accept the Trust unwilling to areWe hearing, Continental’s At the confirmation briefs and implicit their suggestion, ees’ that if the claims expert witness testified argument, explicit at oral made were the Trustees Airline Pilots ruling the merits on bankruptcy court’s excluded, administrative allowed the total was colored protection claim adequate their Plan be close would payable under claims from Continental “ultimatum” by a so-called claim if the cap, and that Trustees’ to the Investors granted the exceeded, claim were that if the allowed, cap would be were See In reorganization. would away abandon to walk from allowing Investors The Trust Transcript at 3. Argument Banc 1223-24, on 1333-38. Based App. at deal. sug of this support no evidence ees offer argued to the testimony, Continental lightly certainly would gestion, and we feasibility determi bankruptcy court such a motive impute confirmation under required for nation challeng effect, the Trustees 1129(a)(11) court. part on would turn U.S.C. right condition ing the Investors’ out Trustees’ adjudication of the still ad approved the amount App. at 1400. investment claim. standing administrative raised never claims. This was to in ministrative urged the court Continental therefore Agree of the Investment the time below at corporate adjudication period or the ment, confirmation itself, ultimate as Order claim into Confirmation statute, rule of no know We go for between. would not serting the Investors deny investors precedent order “unless there ward with deal the exis investments reliance, limit their right to which is place can upon which give they believe conditions tence of App. order.” plan confirmation going to be a a reasonable reorganized company newly against incor argued at 1400. case, as, in this to succeed—such opportunity even position that taking the poration, by excessive weighed being down without adequate protec though the amount expenses. administrative by the court would claim allowed argue also granted The Trustees that Continental’s lief is to they [the Trustees] which position hearing, at the confirmation that the seek from morning stay the Court this [the adjudication of the Trustees’ claim should be deposit conditioned on a of some million $22 incorporated Order, million], into the Confirmation to prepared $117 we are not then to “ploy” “disingenuously” awas to use the fact close App. the transaction.” at 1744. incorporation to such “manufactur[e] representative of the Investors ex- appearance of Appellants’ mootness.” Brief plained that in the airline business “there is a 3; Argument at In Banc Transcript at 1. great sensitivity to cash and the capital posi- Their characterization of Continental’s reorganized structure of a entity,” and that “ploy” implies as a legiti- it that had no the relief that sought the Trustees “could light reason. In integral mate nexus significantly impair capital structure that feasibility between confirmation and would respect exist with reorganized [to] this adjudication claim, of the Trustees’ airline.” Id. at 1744-45. He reviewed the appears suggestion incorporation negotiations that had occurred for the cap for urged by adopted by Continental and expense liability, administrative advised that bankruptcy court was reasonable and re- the Investors monthly had monitored on a inescapable flected the fact that the Trustees’ performance basis Continental’s in that re- claim and the confirmation of the Plan were spect, explained that the Investors had intertwined, inextricably rather than an at- insisted that the Confirmation Order address tempt appearance “manufacture” the the issue of the Trustees’ claim we “because equitable mootness. want to make if putting sure we are our dismissing appeals in, the Trustees’ money we are getting the benefit of our moot, the district specifically court bargain, found that reorganized which is a entity with a the Investors had relied on the capital structure that contemplated.” unstayed court’s App. Confirmation Order and at 1746. He stating concluded un- integral there that was nexus equivocally between the stay that if a were entered condi- and the investment upon success the Plan. The tioned sought, bond the Trustees stated, court “[t]he Investors relied on the then his client prepared “would not be unstayed Confirmation in making Order close this transaction.” Id. The Trustees’ million $450 investment in Continental’s Plan. counsel did not argue thereafter It clear [the requested Trustees’] Investors’ counsel’s statements were insuffi- grounds would undermine ciently relief which probative, and sugges- therefore that upon the Investors making relied persuasive. tion here is less than require investment and would dismantling The Trustees have not contested here that entire App. Plan.” Although if their claim for market value decline of argue the Trustees finding is erro- (a independent collateral claim of their claim neous, support there is it in the record. for the collateral, use and maintenance of the hearing At the April satisfied) 1993 before the which has been approved had been district court on request claim, Trustees’ for the as an administrative the total such Order, conditional the Confirmation administrative greatly claim would have ex- counsel for the they stated cap had ceeded specified by the Investors for testimony that judg- “as a matter of business that purpose. given This would have ment, extremely it would unlikely withdraw; for the option Investors the such with- away investors to walk from this deal if ... a drawal would placed the entire Plan deposit 22-million-dollar jeopardy. By established.” the time the district court App. at 1727. The counsel in appeal, effect ruled on the longer it was no possible challenged otherwise, the Investors to assert to restore the posi- to their earlier stating that inasmuch as coun- made, the Investors’ tions because the investment had been sel were could correct option and the longer withdraw was no Thereafter, assertions he made. Id. available to the Specialty Investors. See attorney (claim Investors’ rose “to Equip., make clear the 3 F.3d at 1049 held moot when position, [I]nvestors’ is that if acceptance the re- “would amount imposing here, Cir,1981). Where, (8th investors as par- the reorganization on plan of different a mas- parties consummated and other third bearing on the ties”). Thus, factor the third an un- in reliance on sive to reach whether determination prudential that, explicitly and stayed order confirmation after con- bankruptcy appeal of a merits the feasibility, claim denied the a condition as of a absence in the firmation and —the sought, the appellate review rights of on the relief requested of the effect would appellate of such review heavily allowance weighs the before parties not court — the fi- public confidence in likely undermine Trustees. against the orders nality bankruptcy confirmation as fairly be recast cannot This factor reorga- completion large make successful reasonably or others Investors the whether true This is like this more difficult. nizations Trustees the prediction the on relied the Investors’ reliance regardless of whether claim. While nothing on their would recover 60%, 30%, or on was “reasonable” based Investors of the that reliance agree we appeal, an on probability of success 100% Order Confirmation unstayed others on argument. at the oral issue raised analysis, to to our importance central is of on the against here arguing dismissal of that reli- “reasonableness” focus on considerations, Trust- prudential basis likelihood ance, as measured at least rely on their assertion repeatedly necessarily a circular ees appeal, is on of reversal “a built-in mechanism Plan utility. contained of little and therefore enterprise pay- disposition [post-confirmation] reasonable were Investors Whether Disputed Administrative Claims.” ment order de- bankruptcy court’s relying on of this at 10. On the basis Appellants’ Brief that would was a case pends whether on no obli- they argue that had provision, appeal or merits on on the considered be preserve the status steps gation to take to the doc- on the basis dismissed be would appeal is not stay, that their quo through moot- “equitable referred trine often avail- relief’ is “some effective dis- moot because be this case would whether And ness.” contractually able, “bind- the Plan is and that on grounds mootness” on missed They conclude ing” on Continental. Inves- depends on whether turn appeal in “permittfing] erred therefore Thus, district court placing the reasonably relied. tors obli- escape its ‘contractual’ Continental Investors’ the reasonableness focus on guise the Plan gations under under probability that by the as measured reliance at 20. Appellant’s Brief up a mootness doctrine.” appeal sets prevail of the “mech- description the Trustees’ down. While easily knocked which is man straw technically Plan is provided anism” not be about inquiry should Our impact of that correct, they overstate reliance Investors’ “reasonableness” mechanism. succeeding on party of either probability Plan, the definitions Under Rather, ask whether we should appeal. “Disputed Adminis claim was the Trustees’ discourage reliance encourage or want adequate sought Claim” because finality trative of bank on the and others investors App. 623-24 see at payments, protection strong pub The orders. ruptcy confirmation 1.4(vi)) of a (Plan subject § maximizing debtors’ favor of policy in lic (Plan App. at 632 see timely objection, reorganiza facilitating successful estates and reorga 1.85(a)). requires the Plan itself, § clearly tion, Code reflected pay allowed administra nized Continental reliance. encouraging such weighs favor date the effective the later of: tive claims allowing approved Indeed, importance of Day fifth Business or “the reliance on confirmation go forward in reorganizations at 691 App. is Allowed.” Claim may after such orders court confirmation 10.1). Further, provides Plan (Plan § equi force behind animating the central Allowed shall be an Disputed Claim Rochman, “[a] See doctrine. table mootness that, such if, only to the extent Mgmt. Co. Claim 471-72; Property Metro F.2d at by a Final Allowed has (In Disputed been Claim re Dialogues, Inc. v. Infor Information (Plan 1.5), § and defines Order,” at 623 App. Inc.), Dialogues, mation a “Final ment); Order” as “[a]n order which is no App. 1729-80, (argument be- longer subject to appeal, proceed- fore certiorari the district stay). court on the ing or proceeding other for review or rehear- reasons, For similar we fail to see the ing, and as to which proceeding [such no is] inconsistency charged by the be- (Plan 1.100). pending,” App. at 635 tween position Continental’s current as to “equitable mootness” argument and its Thus, imposes obligation the Plan bankruptcy response court in to the Trust- on reorganized pay Continental to dis Deposit ees’ Motion that the Plan would re- puted they administrative claims once be quire payment of the by Trustees’ claim the by come allowed a final order of even reorganized Continental if and when allowed. if such final order does not occur until after App. See at above, 1039. As noted Plan confirmation. If the court’s dis- imposes obligation no Continental allowance of the Trustees’ claim were to be absence of final allowing a order the Trust- appeal, reversed on appears pro the Plan claim, ees’ and the availability mere of a vide a “mechanism” payment for of the claim mechanism granting relief does not mean reorganized Continental. The mere the court cannot light determine that in of all availability mechanism, however, such a the circumstances it try should not even may prevent which ground dismissal on the eggs. unscramble the mootness, Article III constitutional does Moreover, at the time argued Continental not warrant reversal of the district court’s against Deposit Motion order dismissing prudential it on grounds. yet court had not ruled disallowing the noted, As we have the district court’s “moot Trustees’ nor claim cited explicit that as an ness” determination was based not on a find basis for its feasibility determination con- ing that no available, relief effective was firming plan. Accordingly, Continental rather finding on the light that in of all the yet did not have reason to know that circumstances, it inequitable would be claim would be denied subject and become grant any relief. Nor has “contractual obli “equitable appeal. mootness” on As soon as gation” been violated either Continental the basis for this argument mootness became Where, or the here, district court. there apparent, Continental repeatedly asserted its order, has no otherwise, been final or allow intention to make argument such an if an ing the disputed administrative appeal was stay filed and no App. obtained. claim, imposes the Plan obligation no on the 1691,1742. reorganized pay Continental it. presented Trustees have not us with any arguments which weigh against all Finally, provisions the Plan allowing prudential of considerations that dictate post-confirmation payment of allowed that this reorganization consummated must way claims in no obviated the Trustees’ obli be left in place. Following confirmation, gation to stay. Here, seek a where the Continental was operating as a restructured confirmation of the Plan and willingness company, and had entered into new countless go Investors to forward turned on the relationships and transactions. To convince bankruptcy court’s denial of the Trustees’ a court to take the action sought by the claims, and where the denial of those claims Trustees which would undermine the basis was fact incorporated into Confirma for the Investors’ proceed, decision to Order, tion there was a clear possibility that Trustees would have to proffer powerful the Trustees’ claims would become moot af reason They indeed. attempt- have not even ter Plan, consummation of the and was ed to do so. therefore incumbent the Trustees to ob stay. tain Indeed, the record shows that Arrayed against that silence are the facts parties all were well aware of the extensive plan was consummat- legal precedent dismissing ed, as moot or on obtained, no numerous other equitable grounds appeals unstayed from changed positions, nu- consummated reorganizations. App. at See merous irrevocable transactions have since (references Agree- the Investment completed been as a result the consumma- of live bank- the merits to entertain to refuse listing all of such Plan. Without they indisputably ruptcy appeals over in its by Continental set forth transactions in which statutory jurisdiction and possess those among brief, note that According to provide relief. plainly can creditors, to unsecured distribution rule for deter- is no clear majority, there than Continental other 53 debtors merger of “equita- is bankruptcy appeal mining when Continental, investment into with Instead, to be this is said bly moot.” Air by Air Partners in cash million $110 made in to be discretionary determination Continental, the reorganized Canada based by the district court instance the first various governments by foreign transfer majori- five weighing of factors on a by the assumption authorities, route opinions of our “sister from the ty has culled unexpired leases reorganized view, my if the doctrine of circuits.” bil- over $5.0 worth executory contracts validity, it is mootness” has really whether Thus, key issue lion. majority the holds. limited than more discretion abused court the district majority’s We equitable factors. dangers inherent weighing the various The balance this interpretation that the doc- hold of adoption and broad not prepared simple of In an abuse ease. court was this illustrated by the district trine are reached filing After terms, happened. this is what its discretion. Bankrupt- Chapter of the under for relief here, presented the circumstances Under Code, continued to Airlines cy Continental that prudential considerations no canwe see jet engines that were aircraft and certain use appellate attempt by an support an would to the Trustees. entrusted collateral held as fashion appeals, to court, court of district undergo- was that their collateral Believing remedy for the Trustees. a limited even value, the Trust- diminution ing a dramatic a new imposing necessarily entail That would motion in filed a renewed August ees ais company, which reorganized debt the pro- seeking “adequate bankruptcy court the case when this entity it than was different 363(e). During under 11 U.S.C. tection” Thus, we court. the district was before months, the eight while Continental the next district of the determination the agree with toward confir- proceeded We claim. the Trustees’ to dismiss court rule on did not mation, bankruptcy court the it that holding on our conclusion our base in- Continental In March this motion. equitable nor prudent neither would be on the bankruptcy court rule the sisted that the relief seek.2 grant the Trustees it time the same motion at Trustees’ told the plan, and Continental confirmed III. the motion that unless bankruptcy judge the reor- denied, prospective investors CONCLUSION funding, withhold corporation would ganized affirm will forth we set reasons For the forward. go reorganization would and the court. the district of the order Further- n.l. Br. at 5-6 & See Continental if position more, took joined dissenting, ALITO, Judge, Circuit effect, into went plan was confirmed BECKER, Judges by Circuit See Continental be moot. any appeal would LEWIS, GREENBERG, McKEE simul- court then The 21. Br. at SAROKIN. motion Trustees’ taneously denied The confirming plan. the order creates entered this case majority’s decision The statutory right their exercised Trustees majori- circuit. The our precedent for a bad court, my view and in district appeal doctrine curious ty adopts is court by Article III an for review the need permitting interprets as mootness,” ruling challenged when particularly acute appeals courts of courts federal district not know the parties. do We decision, separately sented circumstances, do not we light our may have the events nor presented issues of the some whether consider sheet, appear, the docket to what contributed avoided had might been have rulings. delayed long be pre- expeditiously on motions more court ruled of the bankruptcy court is made under cir- purposes appeal. this The majority cumstances such these.3 opinion, however, simply does not assume the existence this doctrine Trustees, adopts but it as however, have utterly been part of the law of our so, In doing such circuit. denied review. In the initial level of majority appeal, the does not opined indepen- district court undertake probably analysis dent origin scope if won appeal (JA merits their doctrine been is had reached rely instead content to on the 1755-56), but the district court decisions of dismissed other appeals. courts of From appeal Likewise, their as moot. the majority decisions, these the majority extracts five of our court describes the argu- factors, which are to weighed by the as “interesting ments challenging” (Maj. district court in initial level of 557) Op. at but then throws them out purpose of determining ap- whether the reaching without argu- merits peal “equitably Maj. moot.” Op. at 559. ments. And majority does this even “(1) These factors are: the reorgani- whether (a) though clearly case is not “moot” in zation plan has substantially been consum- (b) proper term, sense unques- we (2) mated, whether a obtained, has been tionably have statutory (e) jurisdiction, and (3) whether the requested relief would affect “virtually have a unflagging obligation” to rights (4) not before the jurisdiction exercise that we have been whether requested the relief would affect the given. Colorado River Water Conservation (5) plan, success of public policy States, District v. 800, 817, United 424 U.S. of affording finality to bankruptcy judg- 1236, 1246, 96 (1976). S.Ct. 47 L.Ed.2d 483 I Maj. ments.” Op. at 560.4 puzzled am by and troubled majori what the ty has done. I am not convinced that majority’s test is consistent with the law of all of the circuits I. majority claims to following. For majority notes,

As the example, Trustees have the Eleventh Circuit holds that the not contested the existence of the proper doctrine of is test “whether ‘reorganization “equitable mootness,” light and in has been so substantially consummated ” position, Trustees’ I think that it is appropri- that effective relief is no longer available.’ ate to assume the existence of this doctrine Associates, In re Club 1065, 956 F.2d 1069 3. I wish to make express clear that I no criticism cases the district court appellate sits as an of Continental bankruptcy judge. or the My court.’’) (citations omitted); In re Gas Columbia point simply is Inc., that the statutory right System 233, (3d Cir.1995); 50 F.3d 237 to Article III review should be Pennsylvania honored. Brown v. Employees State Credit Union, 81, (3d Cir.1988); 851 F.2d 84 Universal Minerals, Co., Hughes 98, Inc. v. C.A. & 669 F.2d prepared Even if I were majori- to endorse the (3d Cir.1981). Here, 101 as cases cited ty’s test, five-factor strongly I disagree above, court; district appellate court sat as an holding with weighing of these factors apply I would the above decisions—which I as- discretionary ais determination to be made in majority sume the does not mean to overrule— by first instance the district court and re- plenary exercise review over the district by viewed us for abuse of support discretion. In court's order in this case. holding, of this majority relies on an absten- case, decision, a laches opinions and two Separate apart from the fact that our involving scope of remedial Maj. orders. See precedent application calls for plenary of review Op. at majority 560. The rely does case, in this I further believe that such review is undoubtedly because there is appropriate cases— essentially here. areWe called on to an unbroken and line well-established of authori- review whether the properly district court decid- ty holding from this court that "[b]ecause the ed not to reach the merits ap- of the Trustees' district appellate court sits as an court in bank- peal. just We good are in position to make cases, ruptcy our review of the district court's this determination as was the district See, plenary.” decision is e.g., In re Visual In- appellate which sat as an court in this case. In dustries, Inc., 321, (3d Cir.1995) 57 F.3d 324 addition, majority acknowledges that the doc- Stendardo, (citing 1089, (3d re 991 F.2d 1094 adopts trine it must be scope “limited in Cir.1993)); Cohn, 1108, see also In re 54 F.3d cautiously applied,” 559, Maj. Op. see at and I (3d Cir.1995) ("Our 1113 review of the district plenary think that review would better serve plenary court's order is because in these ends.

569 In re confusion.” concepts breeds different Cir.1992) Ltd. Center (11th Miami (quoting (7th Cir.) 766, Indus., Inc., 769 York, F.2d 820 UNR New Partnership v. Bank of — denied, U.S. Cir.1987)). cert. original), seems (11th inquiry (emphasis This 376, 379 (1994). 416 majority’s -, indetermi- 130 L.Ed.2d 115 from S.Ct. quite different majori- if the But even test. nate five-factor is mootness” “equitable If the doctrine it decisions supported analysis is ty’s principles, mootness on real not based those though I think cites, even by the cases cited based? The is it what con- respectful careful and deserve decisions possible suggest two majority and the majority the in banc sideration, I think answers. independent examina- made should the doctrine scope of the basis and tion of by the earliest provided first is The init engraving before mootness” majority, In by the appeals decision cited law. our circuit’s Farms, Inc., 796-97 F.2d re Roberts theAs of this doctrine? is the basis What (9th In re Cir.1981), others. See and several from not stem acknowledges, it does majority Industries, Inc., F.2d AOV Ar- “ease-or-controversy” requirement Dia (D.C.Cir.1986); In re Information example, For Maj. Op. at 558. III. See ticle Cir.1981). (8th Inc., F.2d logues, us now before the case argued that it is not Roberts authority on which the modest III sense. in the Article moot is former provision Farms court relied this doctrine appear Nor does stays which concerned Rule decisions III mootness in non-Article rooted amend a 1976 appeal. Added pending avowedly doctrines flexible “reflect[ing] rule, question provision ment 13A judicial administration.” remedy and stated: Miller, and R. Wright, Arthur Alan Charles prop- a sale approving an order Unless Practice and Federal Cooper, H. Edward indebt- certificate (1984). erty or issuance These 3533.1 Procedure the sale appeal, stayed pending is question the edness focus on said to are doctrines of or the issuance good purchaser to a faith present a determination “granting whether not entry offered, good holder shall perhaps the to a faith and certificate the issues of orders, some effect or modification will have the reversal specific affected of more be § 3533.1 at or not Id. at whether appeal, in real world.” order the such of omitted). Here, (footnote pen- is clear that knows of the holder purchaser or the the issues the merits determination appeal. dency the entry of and by the Trustees raised Farms find the Roberts Although I not do of such deter- the basis order on remedial clear, best I entirely think opinion po- “some effect” —and would have mination challenge to opinion is that reading of the effect—in tentially quite a substantial could in that case reorganization plan of (That why Continen- precisely is real world. was no relief because be entertained not appeal!) us to entertain not want tal does many post- a result as practicable illustrates, doc Thus, well this case that were irrevers- transactions confirmation really not is “equitable mootness” trine 805. former Rule provision to this due ible the Article at all either “mootness” about event, whether any F.2d at See As the Seventh III sense. III or non-Article Farms the Roberts this is or not what majority passage in a that stated Circuit any broader how say, I not do see meant 559), (see Maj. Op. at approval quotes with from extracted reasonably be could rule inability biga between difference “[t]here Rule 8055 Bankruptcy of former provision mootness) (real the outcome to alter court relied Farms the Roberts (‘equita unwillingness to alter outcome now contained provisions analogous from mootness’). two word for Using one ble 364(e). 363(m) §§ appear 11 U.S.C. ap- stays pending now governing current rule 5. The 8005, does not contain Bankruptcy footnote peal, Rule See infra. requirements analogous language, but similar 363(m) 364(e).6 in 11 §§ U.S.C. If ing one the sale or of property lease of an begins provisions with narrow such as estate “does not affect the validity of a sale merely prevent these—-which upsetting or lease under such authorization to an specific certain stays transactions if entity purchased that prop- leased such not obtained —I do not see one can how erty good faith, whether or not such derive broad “equitable doctrine of moot- entity knew of pendency ap- majority ness” that the appears this case peal.” stayed Unless sale is pending to embrace. appeal, the transaction survives even if it should not have been authorized in the apparently What happened, however, was place. Sax, first See In re 796 F.2d 994 holding grad- Roberts Farms was (7th Cir.1986); Edwards, In re ually beyond extended well anything that cf. (7th Cir.1992) F.2d 641 (concluding that could supported by be the authority on which 363(m) § not, however, does forbid all Roberts Farms rested. Subsequent cases attack). forms of collateral Another sec- first cited Roberts Farms support of the Code, tion of 1127(b), 11 U.S.C. dra- proposition that a bankruptcy appeal cannot matically power curtails the of a bankrupt- be if entertained the court grant could not cy court modify a plan See, “effective e.g., relief.” In re Informa- after its confirmation and “substantial con- Dialogues, Inc., Later, F.2d at 477. 1127(b), summation.” Section unlike Roberts interpreted Farms was expan- more § 363(m), place does not any limit on sively to mean that an appeal could power of the court appeals, entertained if a court could not award relief 363(m) reasons §§ underlying “equitable.” See In re Chateaugay 1127(b) preserving bought interests (2d Corp., Cir.1993) (citing — paid for in judicial decisions, reliance on Farms). Roberts And this holding latter and avoiding pains figures attend prominently in the majority’s analy- effort to egg unscramble an plain so Maj. sis. Op. See view, my 558. In —are and so compelling that fill courts gradual the inter- quite but ultimately substantial ex- stices of the Code with approach. the same tension of Roberts Farms squared cannot be with the authority narrow on which that deci- Thus, 20 F.3d at 769. the court seemed to sion relied. if Accordingly, anything like the say that Code contains an majority’s decision in this case is to be de- “interstice” —a gap regarding the circum- — fended, some other foundation for the doc- stances under which an might trine of mootness” must be found. upset plan of reorganization may pur- be possible The second basis for the doctrine Further, sued. appeared the court sug- to “equitable of suggested mootness” is in In re gest that the federal courts have authori- Indus., UNR supra, where the Seventh Cir- ty to create a rule of federal law common cuit wrote: See, fill gap. this e.g., United v. States Little provisions Several of Bankruptcy Inc., Lake Co., Misere 580, Land 412 U.S. Code provide 1978 of 593, that courts 2389, should 2397, 93 S.Ct. 37 187 L.Ed.2d “ keep their hands off (1973) consummated transac- (referring to ‘power in the feder- tions. example, 363(m) For 11 § U.S.C. declare, al courts to as a matter of common says that the reversal of an “judicial order authoriz- law or legislation,” may rules which 363(m) § 11 U.S.C. states: The reversal or appeal modification on of The reversal appeal or an modification authorization of under this section obtain (b) debt, an (c) authorization under credit grant subsection or or incur or of a under this of this lien, section of a sale property or lease priority of section of a aor does affect not does validity not affect validity any incurred, of a or sale lease of debt so such under entity authorization to an priority granted, or hen entity so to an purchased or property good leased such faith, good extended such credit in whether faith, entity whether or not such of entity knew the or not such pendency of knew the of pendency appeal, unless such authori- appeal, unless such authorization and zation such stayed sale or lease debt, were incurring of such granting or the pending appeal. lien, priority such stayed pending were 364(e) 11 U.S.C. states: appeal.

571 mootness, misleading term interstitially or other- necessary to fill be discussed, actually which, I have does not enact- statutory patterns effectuate wise ”) (citation courts at all. The federal omit- mootness Congress’ involve large by ed considering questions of ted). are accustomed mootness, my majority, in III and the Article theory, I find it interesting is an This thinking that view, trap of has fallen into the case whether it this unnecessary to decide is “equitable mootness” that question of what purposes, is present For is correct. as if it were a us must treated now before that, theory if this even to note important is of Article III mootness. Whether question mootness. correct, nothing to do with it has is, III Article sense is moot Instead, a federal common law case it concerns see, course, e.g., Ro policies jurisdictional question, promote certain designed to rule (3d 1216, Shalala, Code. These 1223 Cir. Chapter 11 of the 12 F.3d setti v. reorganizations 1993), question facilitation that we policies are the it is a and therefore reasonably those who protection and the before we consider obligated to resolve are explain I plans. As rely reorganization See, e.g., United appeal. the merits of justifies below, policies what neither these Health Wel Metal and Machine Wire refusal case—the happened has Hosp., Memorial Fund v. Morristown fare a live entertain Article III courts to denied, (3d Cir.), cert. 1190 995 F.2d indisputably possess statuto- they which over 944, -, 114 S.Ct. 510 U.S. meaningful relief jurisdiction and in which ry (1993); Tp., Rogin v. Bensalem L.Ed.2d be awarded. can denied, (3d Cir.1980), cert. 1029, 101 1737, 68 L.Ed.2d 223 S.Ct. 450 U.S. II. (1981). Moreover, that an we conclude if objective preserving sense, How can A we have little in this appeal is moot justify what reorganization the Continental have no flexibility; generally remedial The Trustees are majority done? See, has e.g., Ban U.S. but to choice dismiss. reorganiza- upset seeking to Partner v. Bonner Mall corp Mortgage Co. rather, attempting to obtain — tion; they are -,-, 115 S.Ct. ship, U.S. they are due to them claim payments that (1994); 386, 389-90, 130 Mills v. L.Ed.2d Moreover, even if plan. to that pursuant 653, 16 132, 133, Green, S.Ct. 159 U.S. impe- might be success (when (1895) “an occurs event L.Ed. the full relief obtained if the Trustees rilled court, if for this impossible renders proposi- seeking empirical —an in favor of ease decide the it should courts could is not self-evident —the tion that relief any effectual grant him plaintiff, to relief of lesser measure surely fashion some proceed whatever, will not the court reorganization. not disturb ap dismiss the judgment, but will formal decision, which slams justify its In order peal”). Trustees before door on the the courthouse merits, contrast, that is involved By the ma- the doctrine on the they are even heard really of moot- a doctrine is not have show here —which jority would to justify simi- any one or demand at all —does not could not be awarded ness relief —not juris- present re- a upsetting the Continental not It does dollar —without lar treatment. obviously they cannot do required to are not organization, question; we dictional merits; the desira- dispute not thing. I the any such do to proceeding it before consider reorgani- bility preserving applicable, of the it that it is if we find and even impli- objective zation, my this to mind but necessarily that we dismiss dictate not does remedy, be decided to question of entirety cates a a district in its or affirm appeal arguments the Trustees’ merits of Rather, after the retain order of dismissal. court question addressed, not a threshold craft, the district to instruct ability to “mootness.” craft, remedy a that to bankruptcy courts circumstances particular is suited question, a threshold treating this as In remedy fashioned Thus, could be a case. believe, confused has been majority, I present in the case to ensure that the Conti- ed on assumption that the Trustees reorganization definitely nental is not undermined. would nothing. recover And the same is true of the other that relied B. respect Much the same is true with to Thus, plan. on the skeptical I am about objective protecting reasonable reli- here, reliance interests that are claimed my opinion, ance interests. In is also a any why event I fail to see this issue needs consideration; remedial if the Trustees win to be resolved at the threshold of this case merits, protect on the the need to reasonable rather than at stage, the remedial that if fully reliance interests can be taken into stage is ever reached. crafting appropriate account in an remedy. I C. One aspect majority final opin- thus no question see need to resolve the ion response, warrants a and that reasonable reliance interests at this time. majority’s discussion of the Trustees’ failure majority, however, only wrongly to stay. seek or a obtain I have two com- threshold, treats this as a rather than a regarding ments this discussion. remedial, consideration, but engages an First, might it while be desirable to have a analysis flies in the face of language flatly rule that requires stay whenever a plan to and'seems assume an extraor- party appeal takes might upset plan dinary degree of part naivete on the reorganization, Bankruptcy neither Investors and the others who are said to Code nor the any Rules contain plan. have relied ’ sweeping provision; such our court had not I will focus on the Investors because their adopted any such rule at the time plight large majority’s looms analysis. (and, indeed, Trustees’ appeal7 still has not When the Investors decided invest in the so); done consequently and would un- reorganized NewCal, company, they knew or fair apply such a rule the Trustees should known that reorgani- under the retroactively. plan zation NewCal required pay would be Second, in the absence of such a blanket the Trustees’ claim if it ultimately al- rule, we should focus on pur- whether the lowed. plan provided Section 10.1 of the poses that would by stay be served require pay NewCal would “Allowed Administrative that the Trustees be thrown out of Moreover, Claims.” persuade order to purpose threshold. The of a in this reject court to the Trustees’ re- context is to prevent might transactions that quest that a cash reserve prior be established otherwise occur reliance on the claim, confirmation to cover their Conti- reorganization and that would be difficult or nental argued that such a reserve was unnec- painful to undo if were to succeed. essary if because the Trustees’ claim was Accordingly, the Trustees’ failure to obtain allowed it would be “an Allowed Administra- stay in might this case limit the relief that tive paid Claim which would be in accordance would be available to them if succeeded with the terms Section 10.1 of Plan.” on the merits appeal, of their but it cannot circumstances, JA 1039. Under these justify the refusal at the outset even to con- investor, prudent in deciding whether to in- sider arguments. vest in particular terms, NewCal would have taken into account range sum, and likeli- I believe that the Trustees’ claim hood of possible outcomes the Trustees’ should be entertained on the merits. The appeal, including possibility some or mere act of entertaining that claim would not all of amount sought by imperil the Trustees Continental’s or im- paid have to be as an administrative pair any legitimate reliance interests. If the pursuant claim plan. Section 10.1 of the Trustees’ claim were considered and No reasonable proceed- investor would merits, won on the reorga- threat to the Slocum, 7. In In re Joshua peal,” Ltd. 922 F.2d interpret we "decline[d] to the moot- (3d Cir.1990) (footnote omitted), we noted principles would, ness way in such a "only provisions two effect, create a third situation where Code, 363(m) 364(e), §§ 11 U.S.C. specifical- required stay.” to seek a ly require party stay pending that a ap- seek a interests legitimate reliance nization or framing the into account be taken

could court and the district relief. What throwing the Trust- majority have done— of their the merits court before out of ees unjustified and un- even heard —is

claim are

just. reasons, respectfully I dissent.

For these of the district the order

I would reverse on the mer- for a decision

court and remand

its. HILFIRTY; L. Miller Martha A.

John

v. SHIPMAN; R. Schri- Kenneth

David C. Feese; Stephen

ner; C. Brett O. Betty

Schopfer; A. Noll. Miller, Appellant.

Martha

No. 95-7206. Appeals, States Court

United Circuit.

Third 25, 1996.

Argued Jan. July

Decided

Case Details

Case Name: In Re Continental Airlines

Court Name: Court of Appeals for the Third Circuit

Date Published: Jul 31, 1996

Citation: 91 F.3d 553

Docket Number: 94-7748

Court Abbreviation: 3rd Cir.