Adelphia Recovery Trust v. HSBC Bank USA, National Ass'n ( 2011 )


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  • 09-0799-bk(L)
    In re: Adelphia Recovery Trust
    UNITED STATES COURT OF APPEALS
    FOR THE SECOND CIRCUIT
    _____________________
    August Term, 2009
    (Argued: November 4, 2009; Decided: February 8, 2011)
    Docket Nos. 09-0799-bk(L), 09-0808-bk(Con), 09-0810-bk(Con)
    _____________________
    In re: ADELPHIA RECOVERY TRUST
    _____________________
    ADELPHIA RECOVERY TRUST, Successor to the Official Committee of
    Unsecured Creditors of Adelphia Communications Corporation,
    Defendant-Cross-Claimant-Appellant,
    -v.-
    HSBC BANK USA, NATIONAL ASSOCIATION, FLEET NATIONAL BANK,
    KEY BANK NATIONAL ASSOCIATION,
    Plaintiffs-Cross-Claimants-Appellees.
    _______________________
    BEFORE:          B.D. PARKER, HALL, and LYNCH, Circuit Judges.
    _______________________
    Appeal from a judgment of the United States District Court for the Western District of
    New York (Arcara, J.), affirming in part and reversing in part the judgment of the United States
    Bankruptcy Court for the Western District of New York (Kaplan, Bankr. J.). The district court
    1
    barred the Adelphia Recovery Trust from pursuing fraudulent conveyance claims against the
    appellee banks. AFFIRMED.
    _______________________
    DAVID M. FRIEDMAN (Michael C. Harwood, David J. Shapiro, on the brief),
    Kasowitz Benson Torres & Friedman LLP, New York, New York, for Defendant-
    Cross-Claimant-Appellant Adelphia Recovery Trust.
    WILLIAM J. BROWN (David J. McNamara, Angela Z. Miller, Joshua P. Fleury, on
    the brief), Phillips Lytle LLP, Buffalo, New York, for Plaintiff-Cross-Claimant-
    Appellee HSBC Bank USA, N.A.
    HOWARD B. LEVI, Levi Lubarsky & Feigenbaum LLP, New York, New York, for
    Plaintiff-Cross-Claimant-Appellee Bank of America, N.A., successor by merger
    to Fleet National Bank.
    ALEC P. OSTROW (Jocelyn Keynes, on the brief), Stevens & Lee, P.C., New York,
    New York, for Plaintiff-Cross-Claimant-Appellee Key Bank, N.A.
    _______________________
    HALL, Circuit Judge:
    This case requires us to decide whether a debtor-in-possession is barred from bringing
    fraudulent conveyance claims against three banks because it actively participated in and
    facilitated a sale of the assets of a different debtor-in-possession, to which it was a creditor,
    while remaining silent about the possibility that it would bring fraudulent conveyance claims
    with respect to its prior take-outs of loans secured by those assets. The bankruptcy court
    (Kaplan, Bankr. J.) concluded that such a claim was barred as against only one of the banks,
    because only that bank actively participated in the hearing to confirm the sale. The district court
    (Arcara, J.) affirmed in part and reversed in part, and held that the fraudulent conveyance claims
    were barred as to all of the banks by four separate and independent doctrines: ratification, res
    judicata, judicial estoppel, and quasi-estoppel.
    2
    As we shall explain, we perceive difficulties with the district court’s ratification analysis,
    but agree with it that res judicata bars the fraudulent conveyance actions with respect to the bank
    that actively participated in the sale hearing. We also agree with the district court that judicial
    estoppel bars those actions against the other two banks, and we therefore affirm that court’s
    judgment.
    BACKGROUND1
    I.      The parties and other relevant entities
    Because this case has many corporate players and has played out in numerous forums
    across the years, we set forth the following dramatis personæ.
    a.      Adelphia Communications Corporation (“Adelphia Corp.”)
    Adelphia Corp. was once the fifth-largest cable television company in the United States.
    It was founded by John Rigas in the early 1950s, and became a public corporation in 1986. In
    June 2002, Adelphia Corp. filed for bankruptcy, all shareholder value was lost, and John Rigas
    and his son Timothy Rigas were subsequently convicted of bank fraud and securities fraud for
    looting the company. See United States v. Rigas, 
    490 F.3d 208
    , 211-14 (2d Cir. 2007). Adelphia
    Corp.’s bankruptcy proceedings took place in the Bankruptcy Court for the Southern District of
    New York (the “Adelphia bankruptcy”). In this opinion, the term “Adelphia Corp.” shall be
    used exclusively to refer to the pre-bankruptcy corporation. When referring to actions taken by
    the company after it filed for bankruptcy but before its Chapter 11 Plan of Reorganization was
    confirmed, this opinion will refer to the “Adelphia Debtor-in-Possession” (“Adelphia D-I-P”).
    1
    The facts of this case are, to put it mildly, enormously complex. Like the district court
    and bankruptcy court before us, we have endeavored to set forth the facts accurately while
    making necessary simplifications for the sake of concision.
    3
    b.       Adelphia Recovery Trust (the “ART”)
    The ART, the appellant here, is a Delaware statutory trust created pursuant to the Chapter
    11 Plan of Reorganization that was confirmed by the Adelphia bankruptcy court in February
    2007. It is the successor entity to the Official Committee of Unsecured Creditors of Adelphia
    Corp. (the “Committee”), and it is authorized by the Plan to pursue certain causes of action held
    by Adelphia Corp. and to administer the proceeds from those causes of action on behalf of
    holders of interests in the ART. Under the terms of the Plan, Adelphia Corp.’s creditors and its
    equity holders received various combinations of interests in the ART, cash, stock in Time
    Warner Cable (whose stock was used as part of the purchase price of Adelphia Corp. at the
    bankruptcy sale), and rights to excess reserves. See generally
    http://www.adelphiarestructuring.com/RecoveryTrust.aspx (last visited January 17, 2011). This
    case arises from one of the many causes of action the ART is authorized to pursue.
    c.       Niagara Frontier Hockey, L.P. (“NFHLP”)
    NFHLP was a Delaware partnership formed in March 1998, and its main assets were the
    Buffalo Sabres (a franchise of the National Hockey League) and an interest in the HSBC Arena,
    home to the Sabres. NFHLP ran the hockey team and the arena through wholly-owned
    subsidiary companies, including Crossroads Arena, LLC (“Crossroads”) and Buffalo Sabres
    Concession, LLC (“BSC”). In July 2000, John Rigas and his sons, using Adelphia money,
    bought out the limited partners of NFHLP. In January 2003, NFHLP and it subsidiaries filed for
    bankruptcy in the Bankruptcy Court for the Western District of New York (the “NFHLP
    bankruptcy”).
    d.       Patmos, Inc.
    4
    Patmos is a Delaware corporation incorporated in March 1998. John Rigas was the
    president of Patmos, and his sons were executive vice presidents. Patmos was wholly owned by
    John Rigas and members of his immediate family. In July 2000, Patmos became the General
    Partner of NFHLP.
    e.      Sabres, Inc.
    Sabres, Inc., is a Delaware corporation incorporated in May 1995 and a wholly owned
    subsidiary of Adelphia Corp. As of 2000, John Rigas and his sons comprised all of the directors
    of Sabres, Inc. This opinion will always refer to this corporate entity as “Sabres, Inc.,” and to
    the hockey team itself as “the Sabres” or “the hockey team.” Sabres, Inc., was NFHLP’s largest
    creditor at the time NFHLP filed for bankruptcy, for reasons that will become apparent. Sabres,
    Inc., filed for bankruptcy in June 2002, simultaneously with Adelphia, its parent.
    f.      The banks
    The appellees here are three national banking associations: HSBC Bank USA, N.A.
    (“HSBC”), Fleet National Bank (“Fleet”)2, and Key Bank, N.A. (“Key”). This opinion will refer
    to the three collectively as the “Banks.”
    2
    The successor-by-merger to Fleet is Bank of America, N.A., but this opinion will
    continue to refer to this entity as “Fleet” for simplicity’s sake.
    5
    II.     The loans are made
    In the 1990s, NFHLP and its wholly owned subsidiaries took out the following three
    loans with the Banks. Pursuant to these three loans, the Banks had security interests in
    substantially all of NFHLP’s assets.
    a.      The Construction Loan
    In May 1995, Crossroads borrowed $35 million pursuant to a “Building Loan Contract”
    agreed to by Crossroads, HSBC, Key, and Fleet. On this loan, HSBC was the agent, and HSBC,
    Key, and Fleet were all lenders. The purpose of this loan was to enable the construction of a
    new arena for the hockey team.
    b.      The Concession Loan
    At the same time that Crossroads took out the Construction Loan, BSC borrowed $32.5
    million pursuant to a “Concession Loan Agreement” agreed to by BSC, Fleet, and Key. On this
    loan, Fleet was the agent, and Fleet and Key were the lenders. The purpose of this loan was to
    finance food and concession equipment at the hockey team’s new arena.
    c.      The Revolver Loan
    In February 1997, NFHLP — this time borrowing in its own name rather than through
    any subsidiary — opened a revolving line of credit, up to a maximum of $12 million, with Fleet.
    The purpose of this loan was to give the hockey team an operating line of credit.
    III.    Two of the loans are sold
    In March 2000, Sabres, Inc., entered into assignment agreements with the Banks to
    purchase all of the Banks’ interests in the Construction Loan and the Revolver Loan (thus, it
    acquired interests from all three Banks with respect to the Construction Loan and the interests of
    6
    Fleet with respect to the Revolver Loan). As a result of these transactions, NFHLP was
    thereafter required to make all payments due on these two loans to Sabres, Inc., rather than to the
    Banks. Thus, Adelphia Corp., through its wholly owned subsidiary Sabres, Inc., paid
    approximately $34.1 million to acquire the two loans ($18,583,542 to Fleet, $11,595,398 to
    HSBC, and $3,902,444 to Key).3 The sale of these loans to Sabres, Inc., occurred
    simultaneously with the Rigases’ acquisition of NFHLP via Patmos.
    Although the Banks had intended to sell the Concession Loan as well, this did not occur
    because the consent of a necessary third party — specifically, the holder of the contract to
    operate the arena concession stands in which Fleet held a security interest — could not be
    obtained. Instead, Adelphia Corp. made certain continuing principal and interest payments on
    the Concession Loan on NFHLP’s behalf.
    According to the ART’s view of the facts, all of this occurred because the hockey team
    was losing money. Because NFHLP was in default on the loans and was at risk of bankruptcy,
    the ART asserts, John Rigas and the Banks came to an agreement: if Adelphia Corp. (through
    Sabres, Inc.) were to buy the Loans, the Banks (whose losses as a result of any default on the
    loans would thereby be cut) would give the necessary consent for Rigas (through Patmos, wholly
    owned by the Rigases) to buy out the limited partners in NFHLP and become the sole owner of
    the hockey team. By acquiring the Construction and Revolver Loans, Adelphia Corp. (through
    Sabres, Inc.) became NFHLP’s major secured creditor, and the ART calculates that between
    3
    Technically, the contracts that transferred the loans from the Banks to Sabres, Inc.,
    gave Sabres, Inc., a 95% interest in the loans that would convert to a 100% interest upon the
    National Hockey League’s consent to the transfer, but the interest held by Sabres, Inc.,
    eventually ripened into its 100% ownership of the loans.
    7
    1995 and the date of Adelphia Corp.’s 2002 bankruptcy, John Rigas caused Adelphia to invest
    more than $200 million in NFHLP.
    In short, the ART takes the position that John Rigas caused Adelphia Corp. to prop up
    NFHLP and the hockey team despite inadequate economic benefit to Adelphia Corp. from doing
    so. The NFHLP bankruptcy court, for its part, recognized that although Patmos was nominally
    the owner of NFHLP and NFHLP the nominal owner of the hockey team, Adelphia Corp. “was
    the likely equitable owner of the Sabres entities, in light of what seems to be the use of Adelphia
    [Corp.] funds to purchase the Sabres for Rigas.” Bankr. Ct. Op. at 5 (emphasis added).
    In a Form 8-K disclosure filed with the Securities and Exchange Commission in May
    2002, Adelphia Corp. disclosed that it had created a Special Committee to investigate
    transactions between Adelphia Corp. and certain Rigas-family entities. After summarizing the
    Buffalo Sabres-related transactions, including the loans between the Banks and NFHLP, the
    Form 8-K stated that “[t]he Special Committee is also investigating whether the Company
    received fair value for payments it made pursuant to the foregoing arrangements.” Adelphia
    Commc’ns Corp. Form 8-K filed May 24, 2002.
    As noted above, Adelphia Corp. filed for bankruptcy in the Southern District of New
    York in June 2002. Several months later, the Adelphia D-I-P hired independent accountants to
    analyze various transactions Adelphia Corp. had entered into in its final prepetition years,
    including its transactions involving NFHLP and its subsidiaries. One such accountant, Robert J.
    DiBella, testified at a subsequent deposition that he first became aware of Adelphia Corp.’s
    takeout of the NFHLP’s loans sometime between September 2002 and December 2002, and
    discussed it with an officer of Adelphia in the same time frame. In a report initially prepared in
    8
    December 2002 and later updated in December 2003 and September 2004, DiBella set forth a
    proposed methodology for calculating the value of the loan takeouts to Adelphia. In addition,
    billing records submitted by the Adelphia D-I-P in the same time period showed that some of the
    attorneys were investigating the payments made by Sabres, Inc., to the Banks.
    IV.     NFHLP sells the hockey team to a third party
    NFHLP filed for bankruptcy in the Western District of New York in January 2003. In its
    proceeding, NFHLP reported $64 million in assets and $235 million in liabilities, with the
    majority of the liabilities owed to Adelphia Corp. After the NFHLP bankruptcy proceeding
    began, the Adelphia bankruptcy court gave the Adelphia D-I-P permission, as NFHLP’s largest
    creditor, to appear in the NFHLP bankruptcy court to promote the sale of the hockey team’s
    assets. Specifically, the Adelphia bankruptcy court ordered that the Adelphia D-I-P was
    “authorized in the exercise of [its] business judgment to consent to the sale of certain assets of
    [NFHLP] in connection with any sale process [under the Bankruptcy Code]” and that
    “conveyance of [the Adelphia D-I-P’s] interest in [NFHLP] in connection with any sale process .
    . . shall be free and clear of any liens, interests or encumbrances of any of [the Adelphia D-I-P’s]
    creditors or lenders, with such Liens, if any, to attach to the net proceeds, subject to the rights
    and defenses of [Adelphia] with respect thereto . . ..” Bankr. Ct. Order at 2.
    The NFHLP bankruptcy court gave notice of a sale pursuant to 
    11 U.S.C. § 363
    , and only
    one bidder appeared: Hockey Western LLC (“Hockey Western”). The sale hearing was held in
    April 2003. The proposed asset purchase agreement, entered into between Hockey Western on
    one side and NFHLP, BSC, and Crossroads on the other side, provided that the hockey team’s
    “[a]ssets will be sold free and clear of all liens, claims, interests and encumbrances.” Mot. for
    9
    Approval of Asset Purchase Agreement at 10. The Adelphia D-I-P, for its part, executed a
    stipulation (1) waiving any and all rights it might have to receive any part of the consideration
    paid by Hockey Western for the hockey team assets sold by NFHLP and its subsidiaries and (2)
    releasing all liens and claims against those assets.
    Of course, this only accounted for the Construction Loan and the Revolver Loan, because
    Adelphia Corp.’s March 2000 attempt to purchase the Concession Loan from Fleet had been
    blocked by the operator of the concession stands. Thus Adelphia Corp. held no lien interests via
    the Concession Loan, and Fleet (unlike HSBC and Key) was still a party in interest in the
    NFHLP bankruptcy at the time of the asset sale because it continued to own that Loan. For that
    reason, a different resolution had to be reached with respect to the Concession Loan in order to
    enable a free-and-clear sale. Accordingly, the Adelphia D-I-P agreed to allow the Concession
    Loan to be paid in full from the proceeds of the asset sale, and Fleet gave the Adelphia D-I-P an
    off-set for $11 million in payments Adelphia Corp. had made earlier in debt-support of NFHLP.
    At the asset sale hearing, counsel for the Adelphia D-I-P explained for the bankruptcy
    court the consideration that the Adelphia D-I-P was receiving from the sale:
    There are two elements of consideration in this transaction that we will receive. One
    is a surrender of two letters of credit that back up the concession loan once it’s been
    paid off, and the other is the cure amount that is reflected in a new provision in the
    order, in respect to the assumption of the broadcast agreement [regarding the hockey
    team’s games].
    Other than that, the Adelphia [D-I-P] ha[s] agreed, given the size of [its] claims
    which would have completely warped the other trade creditors in the case, to waive
    any entitlement to participate in the balance of the consideration to be paid under the
    sale agreement.
    Tr. of Sale H’rg at 31-32. Later, the bankruptcy court stated:
    . . . I guess what we have, having read the stipulations, is that everybody who
    10
    anybody thinks actually has legal or equitable or beneficial interest in some kind of
    ownership or lien on the assets of these debtors have all signed the same stipulation;
    essentially identical stipulations, so that we needn’t worry about that unless there’s
    some entity that slipped through the cracks, but I doubt that would have happened
    with the quality of representation that we have here.
    
    Id. at 42
    . Immediately after this remark, counsel for the NFHLP debtor-in-possession asked —
    and the bankruptcy court echoed the question — whether any party wished to be heard in
    objection to the sale. No party — the Adelphia D-I-P included — said a word. In an April 2003
    order, the bankruptcy court approved the sale “free and clear.”
    V.      The Adelphia D-I-P brings a fraudulent conveyance action against the Banks
    In July 2003 — less than three months after the NFHLP bankruptcy court approved the
    free-and-clear sale of the hockey team assets to Hockey Western — the Adelphia D-I-P brought
    a fraudulent conveyance action in the Adelphia bankruptcy court against 450 banks, including
    HSBC, Key, and Fleet. The premise of this action was that “[t]he Rigas [f]amily used [Adelphia
    Corp.] as its piggy bank to fund personal expenses at will and to maintain voting control over
    Adelphia.” Compl. at 9. The complaint alleged that the banks had “knowingly and eagerly
    loaned” money to Rigas family entities despite the banks’ awareness that only Adelphia Corp.
    could have had “the wherewithal to repay” those debts and that the Rigases had used the
    proceeds of the loans to enrich themselves at Adelphia Corp.’s expense. 
    Id. at 9-11
    . The
    complaint alleged that the transactions at issue, including the loans made to facilitate operation
    of the hockey team, “did not benefit [Adelphia Corp.].” 
    Id. at 11-12
    . The claims relevant here
    are Counts 17 through 24, wherein the Adelphia D-I-P contended that the $34 million paid by
    Adelphia Corp. (via Sabres, Inc.) in March 2000 to acquire the Construction Loan and Revolver
    Loan was greater than fair consideration under N.Y. Debtor and Creditor Law § 272 and that the
    11
    Banks had not been good-faith transferees under New York law and 
    11 U.S.C. § 550
    (b). 
    Id. at 172-84
    . With respect to Fleet and the Concession Loan, the complaint alleged that the payments
    Adelphia Corp. had made to Fleet between June 1999 and May 2002 — i.e., the payments that
    resulted in the $11 million set-off at the time of the asset sale — were fraudulent.
    The Banks reacted to the initiation of this fraudulent conveyance action in two ways.
    First, they filed proofs of claim in the NFHLP bankruptcy proceeding, asserting that if the
    Adelphia D-I-P were successful in its fraudulent conveyance claims, the Banks would have a
    claim against the NFHLP debtors in the amount of any judgment against them because it was no
    longer possible to rescind the transfer of the assets that were sold free and clear, leaving the
    Banks with no ability to remedy the fraudulent conveyance claims by getting the loans back.
    Second, after the NFHLP debtors brought a declaratory judgment action seeking a declaration
    that the Banks’ claims should be subordinated to other claims, the Banks filed cross-claims in the
    NFHLP bankruptcy court seeking to bar the fraudulent conveyance claims in the Adelphia
    bankruptcy court. Faced with the prospect of dueling litigations, the two bankruptcy courts
    communicated directly with each other. They subsequently entered reciprocal orders allowing
    specific issues related to the fraudulent conveyance claims to be litigated exclusively in the
    NFHLP bankruptcy court. The Adelphia bankruptcy court defined the issue over which it was
    relinquishing jurisdiction (the same issue that is now before us on this appeal):
    Th[e] issue is whether the participation of the Adelphia [D-I-P] in the processes of
    asset sale and plan confirmation in the [NFHLP bankruptcy] has the legal effect
    of having barred the prosecution of the present Adversary Proceeding as against
    HSBC, Key Bank, and/or Fleet Bank with regard to the payments made upon, or
    in satisfaction of, loans that were originally extended by those banks to [t]he
    [NFHLP] debtors before any Adelphia debtor or affiliate, or Rigas or any Rigas
    entity or affiliate, owned or controlled any of the [NFHLP] debtors.
    12
    Order of U.S.B.C., S.D.N.Y., dated June 14, 2004. The Adelphia bankruptcy court added that, to
    the extent necessary for deciding that issue, it also relinquished jurisdiction over interpretation of
    its earlier order authorizing the Adelphia D-I-P “to exercise [its] judgment in granting or
    withholding consent to the process of sale and confirmation as to the [NFHLP] debtors.” 
    Id.
    The NFHLP bankruptcy court’s order accepted jurisdiction on the same terms.
    In November 2006, the attorney who had represented the Adelphia D-I-P at the NHFLP
    sale hearing submitted a declaration to the bankruptcy court which read, in relevant part:
    At no time prior to the Sale Hearing was [my law firm] investigating any possible
    fraudulent conveyance claims that might be asserted against the Banks. I was not
    privy to the investigation of the Committee or its agents and was not informed of the
    findings of their investigation until July 2003, shortly before [the fraudulent
    conveyance action] was commenced. . . .
    It did not occur to me at the Sale Hearing that any fraudulent conveyance claims that
    may be asserted by [the Adelphia D-I-P] . . . were being waived, or that the existence
    of such claims was an issue being conducted explicitly or implicitly. Certainly I was
    not aware of the claims at the time.
    When I appeared before this court at the Sale Hearing, I had no intent to mislead this
    [c]ourt or the Banks into thinking that [the Adelphia D-I-P] . . . would never assert
    fraudulent conveyance claims against the Banks.
    Bankr. Ct. Op. at 30-31.
    VI.     The bankruptcy court’s decision
    In a detailed and ruminative opinion, the bankruptcy court granted summary judgment on
    the fraudulent conveyance claims in favor of Fleet with respect to the claims against it, but
    ordered that the fraudulent conveyance actions should be allowed to go forward with respect to
    HSBC and Key.4 The bankruptcy court stated that, if it had been informed that the Adelphia D-
    4
    The bankruptcy court issued several versions of its opinion, seeking input from the
    parties, before reissuing a final version. Our opinion refers exclusively to the final, “redlined”
    version of the bankruptcy court opinion.
    13
    I-P was reserving its right to bring fraudulent conveyance actions in its own bankruptcy
    proceeding, it “would not have approved the sale without the consent of the Banks or a full-
    blown resolution as to ‘who owned the lien rights.’” Bankr. Ct. Op. at 20-21. The bankruptcy
    court added that, even if the sale had been necessary to keep the hockey team in Buffalo, it
    would not have hesitated to prevent the sale if the 
    11 U.S.C. § 363
    (f) requirements for a free-
    and-clear sale had not been met.
    The bankruptcy court then explained why it thought HSBC and Key were in a different
    position from Fleet. It noted that “they may have been remote from the N[FHLP] assets in a
    legal sense (their position having been bought out (they say) in 2000 (three years before the §
    363 sale)), [but] they were not remote, in fact, from what was happening in the N[FHLP] case.”
    Given Adelphia Corp.’s May 2002 Form 8-K disclosures and that counsel for HSBC was also
    counsel for the National Hockey League and deeply involved in the hockey team assets sale, the
    bankruptcy court suggested that all three Banks ought to have been well aware of what was
    transpiring in the NFHLP case. The bankruptcy court thus rejected the claim of HSBC and Key
    that “they never dealt with the Rigases [and] that they merely accepted payments on the debts
    incurred by the pre-Rigas Sabres.” Bankr. Ct. Op. at 24.
    Turning to its first conclusion of law, the bankruptcy court held:
    [R]atifying the ownership of the liens, etc., in open [c]ourt here was a necessary
    prerequisite to the § 363 sale and [o]rder here, and so it is a bar to Counts 17-24, but
    only to the extent of the value Sabres, Inc. (and therefore Adelphia) received in
    exchange for the $34 million paid to HSBC and Key plus $11 million transferred to
    Fleet in debt-support payments credited by Fleet when settling-up with Adelphia.
    It may also be a complete defense to Counts 17-24, as discussed later. And this
    [c]ourt finds that “ratification” did indeed occur as to what was received in 2000
    from the Banks. . . .
    14
    Unlike Fleet, HSBC and Key were not here in court to take a particular position
    regarding the sale. The most critical fact for these purposes is that this was a judicial
    sale, not a sale on the street. In such a sale the judge protects the innocent absentee.
    A simple mention of HSBC and Key by Adelphia would have caused this [c]ourt to
    bring them here. . . .
    A judicial sale . . . depends on disclosure of “hazy” ownership. Even more so as to
    sales “free and clear” by a bankruptcy court. . . .
    HSBC and Key may avail themselves of the ruling that Adelphia ratified, in this
    [c]ourt, what it received in the attacked transfers.
    Bankr. Ct. Op. at 27-29 (emphases in original).
    The bankruptcy court then gave lengthy consideration to whether the Adelphia D-I-P and
    its counsel “knew” at the time of the asset sale that it might later bring an avoidance action
    against the Banks. Noting the importance of counsel’s duty to the court, the bankruptcy court
    offered a discourse on the level of preparation it expected from experienced bankruptcy counsel
    before a § 363 sale, and speculated that counsel for the Adelphia D-I-P had taken insufficient
    steps to inform himself about the causes of actions that the Adelphia D-I-P might soon pursue.5
    The bankruptcy court went on:
    If HSBC and Key had appeared here, this [c]ourt would not ennoble that decision by
    Adelphia’s counsel to remain silent about them. A big, complex Chapter 11 such as
    Adelphia demands big, complex administrative resources to make sure that the
    debtor is not “messing up” the N[FHLP] D-I-P’s critical efforts to reorganize the
    N[FHLP] Debtors and the N[FHLP] [c]ourt’s docket.
    Bankr. Ct. Op. at 36.
    But the bankruptcy court found that “HSBC and Key derive no benefit from [its ruling],
    other than the ability to defend in the Adelphia [c]ourt on the basis, in part, that Adelphia ratified
    5
    The bankruptcy court subsequently redacted much of its discussion of the motivations
    and knowledge of the Adelphia D-I-P’s counsel, leaving those portions of its opinion intact for
    appellate review, but under seal.
    15
    the fruits of the challenged transfers.” Bankr. Ct. Op. at 37-38. That court’s view was that
    HSBC and Key had failed to justify their non-appearance in the NFHLP court, despite having
    “dealt extensively with Rigas and Adelphia and t[aken] payment from Adelphia other than in the
    ordinary course of the debts owed by the pre-Rigas Sabres.” Bankr. Ct. Op. at 38-40. But it
    ruled that Fleet was different because “Adelphia should not have consented to cash-out Fleet —
    a convenient resolution to an obstacle to the sale that Adelphia supported — while Adelphia was
    considering suing Fleet for a major portion of the cash-out amount, if Adelphia was relying on §
    546 to later sue Fleet.” Id. at 41-42. The bankruptcy court thus held that the Adelphia D-I-P was
    barred from bringing any fraudulent conveyance claims against Fleet, but that it could return to
    the Adelphia bankruptcy court and pursue its claims against HSBC and Key.
    The ART appealed the ruling in favor of Fleet to the district court, and HSBC and Key
    cross-appealed the rulings against them.
    VII.    The district court’s decision
    In February 2009, the district court issued an order affirming the bankruptcy court with
    respect to Fleet but reversing the bankruptcy court with respect to HSBC and Key. See HSBC
    Bank USA, N.A. v. Adelphia Commc’ns Corp., No. 07 Civ. 553A, 
    2009 WL 385474
     (W.D.N.Y.
    Feb. 12, 2009). The district court agreed with the bankruptcy court that, with respect to Fleet,
    the Adelphia D-I-P had “ratified the very transactions (i.e., the March 2000 sale of the
    Construction and Revolver Loans to Adelphia and Adelphia’s payments on the Concession
    Loan) that [the ART] now contend[s] should be avoided.” 
    Id. at *7
    . The district court rejected
    the notion that the Adelphia D-I-P did not have “full knowledge” of the facts surrounding the
    allegedly fraudulent transfer at the time of the sale hearing. 
    Id.
     The district court also took the
    16
    view that the “proper remedy in a fraudulent transfer action is rescission of the underlying
    transaction, not just a piece of it, such as the purchase price.” 
    Id.
     at *8 (citing Grace Bank Leumi
    Trust Co., 
    443 F.3d 180
    , 189 (2d Cir. 2006)). On this basis, the district court rejected the ART’s
    “attempts to apply ratification to only the sale of the loans, while preserving a fraudulent transfer
    claim as to the purchase price.” 
    Id.
    Unlike the bankruptcy court, the district court found the ratification analysis to be as
    applicable to HSBC and Key as it was to Fleet. Id. at *9-10. The district court stated that “there
    was no reason for HSBC and Key to be present at the sale hearing” because “[t]he uncontested
    evidence is that the [contracts] governing the sale of th[e] [Construction and Revolver] Loans
    ripened into 100% ownership by Sabres, Inc.[,]” and therefore, “as far as HSBC and Key were
    aware, at the time of the sale hearing, they had no ownership interests whatsoever in the Loans
    and had no reason to appear.” Id. at *10. The district court ruled that the Adelphia D-I-P, by
    remaining silent at the April 2003 sale hearing, ratified the purchase of the loans with respect to
    HSBC and Key as much as with respect to Fleet. Id.
    Alternatively, the district court found that several other principles barred the ART from
    pursuing the fraudulent transfer claims. First, the district court concluded that the claims were
    barred by the doctrine of res judicata because: (1) the asset-sale approval order and Adelphia’s
    stipulation each constituted a final judgment on the merits by a court of competent jurisdiction;
    (2) the Adelphia D-I-P and the Banks were all creditors in the NFHLP bankruptcy proceedings,
    and thus the same parties were involved in both those proceedings and the present fraudulent
    transfer actions; and (3) a judgment in favor of the ART on the fraudulent conveyance claims
    would impair the judgment rendered in the NFHLP bankruptcy, given that the only remedy for a
    17
    fraudulent conveyance is rescission of the fraudulent transfer and the NFHLP assets were sold to
    Hockey Western free and clear. Id. at *10-13. The district court again rejected the ART’s
    contention that it did not have full knowledge of the factual basis for any fraudulent conveyance
    claims at the time of the asset sale, based on record evidence that they were at least exploring
    such claims. Id. at *13-14.
    As a second alternative ground for barring the ART’s claims, the district court held that
    the doctrine of judicial estoppel applied, because the NFHLP bankruptcy court had relied on the
    Adelphia D-I-P’s representation that it alone owned the Construction and Revolver Loans, a
    position incompatible with its present contention that the transfers were fraudulent and ought to
    be rescinded. Id. at *17-18. Finally, the district court found the fraudulent transfer claims barred
    by the doctrine of quasi-estoppel, because the ART was asserting to the detriment of another a
    right inconsistent with a position it previously took, such that the conveyances, “although
    perhaps ‘originally impeachable, became unimpeachable in equity.’” Id. at *18-19 (quoting
    Simmons v. Burlington, C.R. & N.R. Co., 
    159 U.S. 278
    , 291 (1895)). For each of these
    independent reasons, the district court declared that the ART was barred from pursuing its
    fraudulent conveyance claims. 
    Id. at *19
    .
    The ART timely appealed to this Court.
    18
    DISCUSSION
    I.     Standard of Review
    “We exercise plenary review over a district court’s rulings in its capacity as an appellate
    court in bankruptcy.” Community Bank, N.A., v. Riffle, 
    617 F.3d 171
    , 174 (2d Cir. 2010) (citing
    In re Dairy Mart Convenience Stores, Inc., 
    411 F.3d 367
    , 371 (2d Cir. 2005)). “[W]e
    independently examine the bankruptcy court’s factual determinations and legal conclusions,
    accepting the former unless clearly erroneous and reviewing the latter de novo.” 
    Id.
     (bracketed
    text in original) (quoting In re Dairy Mart Convenience Stores, 
    411 F.3d at 371
    ).
    II.    Ratification and res judicata
    Although, as we shall explain later in our discussion of judicial estoppel, we do not
    believe that the ART can escape the consequences of the Adelphia D-I-P’s silence and
    stipulations at the asset-sale hearing, we cannot agree with the district court’s ratification
    analysis, for two reasons. First, we are not persuaded that rescission is the only remedy that is
    ever available for a fraudulent conveyance under New York law. Second, we do not think that
    Adelphia demonstrated the requisite intent to ratify the fraudulent conveyances. We will discuss
    these points in turn, and they lead us to the conclusion that ratification does not bar the ART’s
    fraudulent conveyance actions with respect to HSBC and Key. As we will also explain, the
    ratification and res judicata analyses are closely related in this context, and we will discuss the
    two doctrines together. With respect to Fleet, we conclude that res judicata applies to block the
    ART’s cause of action.
    “A fraudulent transfer is not void, but voidable; thus, it can be ratified by a creditor who
    is then estopped from seeking its avoidance.” In re Best Prods. Co., 
    168 B.R. 35
    , 57 (Bankr.
    19
    S.D.N.Y. 1994) (citing G. Glenn, Fraudulent Conveyances and Preferences, Vol. 1, §§ 111 at
    221, 113 at 223 (1940)). “Ratification is the act of knowingly giving sanction or affirmance to
    an act which would otherwise be unauthorized and not binding.” 57 N.Y. Jur. 2d Estoppel,
    Ratification, and Waiver § 87.6 “[R]atification may be express or implied, or may result from
    silence or inaction.” Id. § 88.
    As discussed above, the bankruptcy court took the view that the Adelphia D-I-P’s actions
    ratified what it received from the March 2000 transaction — i.e., ownership of the Construction
    and Revolver loans — but not what it paid. The district court rejected this view on the basis that
    “the proper remedy in a fraudulent transfer action is rescission of the underlying transaction, not
    just a piece of it, such as the purchase price.” HSBC Bank USA, 
    2009 WL 385474
     at *8. We
    think the district court erred to the extent that it categorically rejected the possibility of a money
    judgment in lieu of rescission.
    It is true, as the district court and the ART have both observed, that in the context of
    discussing New York’s fraudulent conveyance law we have stated that “[t]he proper remedy in a
    6
    With the exception of a footnote in Key’s brief, neither the parties nor the district and
    bankruptcy courts have extensively discussed the extent to which the ART’s fraudulent
    conveyance actions arise under state law and the extent to which they arise under federal law.
    We proceed on the assumption and understanding that the claims the ART presently seeks to
    maintain against HSBC and Key must arise under New York’s state laws governing fraudulent
    conveyances, which may be invoked in federal bankruptcy proceedings by operation of 
    11 U.S.C. § 544
    (b)(1). The version of the federal fraudulent transfer statute in effect at the time
    Adelphia filed its bankruptcy petition in June 2002 allowed trustees to avoid only fraudulent
    transfers made one year or less before the date of the filing of the petition. See 
    11 U.S.C. § 548
    (2002). Because Adelphia Corp.’s take-out of the Construction and Revolver loans occurred in
    March 2000, the ART may not invoke the federal fraudulent transfer statute. The parties focus
    on New York law in their briefs, and the ART’s reply brief does not challenge Key’s assertion
    that New York law controls, and it therefore appears to us that this point is undisputed with
    respect to HSBC and Key. With respect to Fleet and the Concession Loan payments made
    within the year before Adelphia’s petition was filed, the ART may, and does, assert the federal
    bankruptcy fraudulent transfer statute.
    20
    fraudulent conveyance claim is to rescind, or set aside, the allegedly fraudulent transfer, and
    cause the transferee to return the transferred property to the transferor.” Grace v. Bank Leumi
    Trust Co., 
    443 F.3d 180
    , 189 (2d Cir. 2006) (citing Geren v. Quantum Chem. Corp., 
    832 F.Supp. 728
    , 736-37 (S.D.N.Y. 1993)). However, this statement is taken out of context. In the portion of
    Geren that we relied upon as authority for our pronouncement in Grace, the concern of then-
    District Judge Leval was to make clear that “the action for fraudulent conveyance does not create
    an independent remedy of money damages against third parties who aided the debtors transfer . .
    . .” 
    832 F.Supp. at 737
    . In other words, Judge Leval was explaining the purpose of fraudulent
    transfer actions (i.e., to unwind transactions between the actual parties to the transaction) as
    distinct from other causes of action, and he was not describing a limitation on how that purpose
    might be fulfilled. 
    Id. at 736-37
    . In Grace, similarly, we were required to consider whether a
    third-party transferee standing existed to challenge a predicate judgment under 
    N.Y. Debtor & Creditor Law § 273
    -a, and we cited Geren in the context of explaining that such standing should
    be rare because the remedy under § 273-a derives from the transfer of the assets and not the
    predicate judgment. 
    443 F.3d at 188-89
     (“[T]he unsatisfied judgment, while a necessary
    predicate to bringing a . . . § 273-a case, is not a sword that can be directly turned upon third-
    party transferees.”).
    Neither Geren nor Grace held, or would logically require us to hold, that under New
    York law a creditors’ committee cannot obtain a money judgment where the asset alleged to
    have been fraudulently transferred is no longer in the hands of the original transferee.
    Meanwhile, there is considerable authority suggesting that New York law permits exactly such a
    remedy when the traditional fraudulent conveyance remedy of rescission is no longer
    21
    practicable. See, e.g., Newshewat v. Salem, 
    365 F. Supp. 2d 508
    , 521 (S.D.N.Y. 2005)
    (“[W]here the assets fraudulently transferred no longer exist . . . a money judgment may be
    entered in an amount up to the value of the fraudulently transferred assets.”); RTC Mortg. Trust
    1995-S/N1 v. Sopher, 
    171 F. Supp. 2d 192
    , 201 (S.D.N.Y. 2001) (“Under New York law, a
    creditor may recover money damages against parties who participate in the fraudulent transfer
    and are either transferees of the assets or beneficiaries of the conveyance.”); Lending Textile,
    Inc. v. All Purpose Accessories Ltd., 
    664 N.Y.S.2d 979
    , 998 (1st Dep’t 1997) (“While, as a
    general rule, the creditor’s remedy in a fraudulent conveyance action is ‘limited to reaching the
    property which would have been available to satisfy the judgment had there been no
    conveyance,’ a money judgment may properly be granted as a substitute for those assets in
    circumstances where . . . the debtor’s assets ‘have been sold and commingled with those of [a
    transferee].’”) (bracketed text in original) (internal quotation omitted); Mfrs. and Traders Trust
    Co. v. Lauer’s Furniture Acquisition, Inc., 
    226 A.D.2d 1056
    , 1057 (4th Dep’t 1996) (“Where the
    assets of [the debtor-transferor] have been sold and commingled with those of [the transferee], a
    money judgment was properly granted as a substitute for those assets.”); Valentine v. Richardt,
    
    126 N.Y. 272
    , 272-73 (1891) (finding monetary judgment appropriate where property conveyed
    had been sold by transferee to bona fide purchaser); see also 30 N.Y. Jur. 2d Creditors’ Rights
    and Remedies § 446 (“Where the assets fraudulently transferred no longer exist or are no longer
    in the possession of the transferee, a money judgment may be entered against the transferee in an
    amount up to the value of the fraudulently transferred assets.”).
    Key argues that there are no New York fraudulent conveyance cases allowing a money
    judgment where, as here, the allegedly ratifying party — as opposed to the transferor or
    22
    transferee — is responsible for the destruction of any possibility that the status quo ante could be
    restored. This appears to be true. But it is also true that recent New York cases do not appear to
    preclude that remedy under such circumstances, even if the late Nineteenth Century cases where
    the alternative money remedy emerged could be read to suggest that the transferee must bear
    responsibility for the dissolution of the original asset for a money judgment to be available. See
    Valentine, 
    126 N.Y. at 273
     (“[A]s the fraudulent grantee had by his own act, in conveying the
    land to a bona fide purchaser, prevented the plaintiff from recovering it, equity required that he
    should restore to the plaintiff its equivalent in money, not as damages, but as a substitute for the
    land itself[,] [and] the court had power to render any judgment consistent with the facts alleged
    and proved.”). It thus appears to us that, absent the operation of some other doctrine to bar
    ART’s fraudulent conveyance actions, New York law would allow the possibility of a money
    judgment in lieu of rescission, even though the March 2000 conveyances cannot be undone in
    the aftermath of the NFHLP asset sale. At least with respect to the price Adelphia Corp. paid
    Key and HSBC, ratification did not occur, because the Adelphia D-I-P’s acceptance of sole
    ownership of the Construction and Revolver Loans did not, as a matter of law, preclude recovery
    of the purchase price for those loans.
    Second, we do not think the Adelphia D-I-P intended to ratify the purchase price. “Mere
    negligence is not ratification[,] . . . [but] an act, such as an acceptance of benefits, may constitute
    a ratification, and acquiescence may give rise to an implied ratification . . ..” 57 N.Y. Jur. 2d
    Estoppel, Ratification, and Waiver § 2. The intent required for ratification “must be clearly
    established and may not be inferred from doubtful or equivocal acts or language.” Chemical
    Bank v. Affiliated FM Ins. Co., 
    169 F.3d 121
    , 128 (2d Cir. 1999) (quoting Holm v. C.M.P. Sheet
    23
    Metal, Inc., 
    455 N.Y.S.2d 429
    , 432 (4th Dep’t 1982)). Where the allegedly ratifying party’s
    silent acquiescence to a transaction credibly appears to have resulted from the complexity of the
    situation rather than intent, ratification does not occur. See, e.g., King v. Ionization Int’l, Inc.,
    
    825 F.2d 1180
    , 1187 (7th Cir. 1987) (Posner, J.). Although intent can be shown by implication,
    the Banks do not point to anything in the record suggesting such intent on the part of Adelphia
    Corp. at the sale hearing, and the bankruptcy court’s opinion suggests that the Adelphia D-I-P,
    although it may have been impermissibly inattentive to the causes of action available to it, was
    not acting with intent to ratify. We conclude that the Adelphia D-I-P did not ratify the price it
    paid for the Construction and Revolver Loans.
    And with respect to the Construction and Revolver Loans, there is little difference
    between ratification and res judicata. The doctrine of res judicata, or claim preclusion, applies
    in “later litigation if [an] earlier decision was (1) a final judgment on the merits, (2) by a court of
    competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving
    the same cause of action.” EDP Med. Computer Sys., Inc. v. United States, 
    480 F.3d 621
    , 624
    (2d Cir. 2007) (bracketed text in original) (quoting In re Teltronic Servs., Inc., 
    762 F.2d 185
    , 190
    (2d Cir. 1985)). If those criteria are met, “[a] final judgment on the merits . . . precludes the
    parties or their privies from relitigating issues that were or could have been raised in that action.”
    
    Id.
     (bracketed text in original) (quoting St. Pierre v. Dyer, 
    208 F.3d 394
    , 399 (2d Cir. 2000)
    (alteration in the original)). “This rule applies with full force to matters decided by the
    bankruptcy courts.” 
    Id.
    There is no doubt that the bankruptcy court’s order approving the sale of the hockey
    team’s assets was a final judgment on the merits of an action by a court of competent
    24
    jurisdiction, and we may assume for present purposes that, as the district court held, the NFHLP
    and Adelphia bankruptcies are sufficiently intertwined that they may be considered the same
    cause of action. But as to the Construction and Revolver Loans, we do not see how res
    judicata can apply in light of our ratification analysis and, in particular, our conclusion that New
    York law allows remedies other than rescission under certain circumstances. All that the
    bankruptcy court did was to approve a § 363 sale at which the Adelphia D-I-P appeared as a
    creditor, and the orders and stipulations entered into at that time merely confirmed that Hockey
    Western was acquiring the assets free and clear. These orders in no way resolved the issue of
    whether the price Adelphia Corp. paid for the Construction and Revolver Loans was fair, given
    that New York law would allow a money judgment even after rescission ceased to be a legal
    possibility. If it is the case that the conduct of the Adelphia D-I-P at the § 363 sale ought to
    deprive it of the opportunity to bring a fraudulent conveyance action because the banks would
    have proceeded differently had they known of the possibility of such actions, that is an equitable
    argument arising in some form of estoppel, an argument we will turn to momentarily. It is not an
    argument about the legal consequences of the asset sale, and res judicata cannot apply as to the
    Construction and Revolver Loans.
    The Concession Loan is a different matter. Unlike the other Banks, who did not appear
    in connection with the sale proceeding, Fleet and the Adelphia D-I-P negotiated as parties-in-
    interest as to who would get paid what from the sale of the team. In doing so, both Fleet and the
    Adelphia D-I-P agreed to certain sale terms that gave the Adelphia D-I-P credit for the
    approximately $11 million in payments Adelphia Corp. had already made to service the
    Concession Loan. So, in this respect, the Adelphia D-I-P received consideration not merely
    25
    from the third-party purchaser (as was the case with the Construction and Revolver Loans, which
    by the time of the asset sale were wholly owned by Adelphia), but also from Fleet, who the ART
    now contends Adelphia Corp. should never have paid in the first place. Having sat across the
    table from Fleet, and bargained for (and benefitted from) the terms on which the Concession
    Loan was cashed out, the Adelphia D-I-P directly confronted the valuation of the payments it
    had made to Fleet on the Concession Loan. Thus, the issue that was not resolved with respect to
    the Construction and Revolver Loans — the fairness of the price paid by Adelphia — was
    necessarily resolved with respect to the Concession Loan. For better or for worse, the Adelphia
    D-I-P consented to Fleet’s demand that it be paid in full for the Concession Loan, and this was
    integral to approval of the asset sale. A bankruptcy court order confirming an asset sale is a final
    judgment capable of having res judicata effect. See In re Am. Preferred Prescription, Inc., 
    255 F.3d 87
    , 92 (2d Cir. 2001) (citing Hendrick v. H.E. Avent, 
    891 F.2d 583
    , 585-87 (5th Cir.1990);
    Gekas v. Pipin, 
    861 F.2d 1012
    , 1016-18 (7th Cir.1988)). To allow the ART to challenge the
    decision made at the time of the asset sale would necessarily call into question the validity of the
    price paid at that time and confirmed by the court, which is exactly what res judicata prohibits.
    Like the district court, we reject the ART’s argument that res judicata cannot apply
    because counsel for the Adelphia D-I-P lacked sufficient knowledge of potential fraudulent
    conveyance actions at the time of the asset sale. Even assuming that it was necessary for the
    Adelphia D-I-P to have known not only the facts that would have been the basis of its claims but
    also the viability of its right of action — which we doubt — we are still bound, absent a showing
    of clear error, by the bankruptcy court’s determination that only a deliberate decision to remain
    unaware of potential fraudulent conveyance actions could explain counsel’s ignorance. And we
    26
    have held that “[r]es judicata applies even where new claims are based on newly discovered
    evidence, unless the evidence was either fraudulently concealed or it could not have been
    discovered with due diligence.” L-TEC Elecs. Corp. v. Cougar Elec. Org., 
    198 F.3d 85
    , 88 (2d
    Cir. 1999) (internal quotation marks omitted).
    We have considered the ART’s other arguments that res judicata cannot apply, and with
    respect to the Concession Loan we find them without merit.
    III.   Judicial estoppel
    We must now consider whether the equitable doctrine of judicial estoppel requires that
    the ART be estopped from pursuing its claims with respect to the Construction and Revolver
    Loans even though the asset sale did not strip it of all possible remedies.
    A potential consequence of a conflict between two factual statements made by the
    same party is judicial estoppel: ‘Where a party assumes a certain position in a
    legal proceeding, and succeeds in maintaining that position, he may not thereafter,
    simply because his interests have changed, assume a contrary position, especially
    if it be to the prejudice of the party who has acquiesced in the position formerly
    taken by him.’
    DeRosa v. Nat’l Envelope Corp., 
    595 F.3d 99
    , 103 (2d Cir. 2010) (quoting New Hampshire v.
    Maine, 
    532 U.S. 742
    , 749 (2001)). “Typically, judicial estoppel will apply if: 1) a party’s later
    position is ‘clearly inconsistent’ with its earlier position; 2) the party’s former position has been
    adopted in some way by the court in the earlier proceeding; and 3) the party asserting the two
    positions would derive an unfair advantage against the party seeking estoppel.” 
    Id.,
     595 F.3d at
    103 (quoting New Hampshire, 
    532 U.S. at 750-51
    ). The third requirement is sometimes couched
    in terms of “unfair detriment [to] the opposing party” rather than advantage to the party to be
    estopped. New Hampshire, 
    532 U.S. at 751
    . In this circuit, moreover, “[w]e further limit
    ‘judicial estoppel to situations where the risk of inconsistent results with its impact on judicial
    27
    integrity is certain.’” DeRosa, 595 F.3d at 103 (quoting Uzdavines v. Weeks Marine, Inc., 
    418 F.3d 138
    , 148 (2d Cir. 2005)). This latter requirement means that judicial estoppel may only
    apply where the earlier tribunal accepted the accuracy of the litigant’s statements. See Simon v.
    Safelite Glass Corp., 
    128 F.3d 68
    , 72 (2d Cir. 1997).
    Before we turn to these enumerated elements of judicial estoppel, we first address the
    ART’s insistence that we cannot find judicial estoppel because invocation of this doctrine
    requires a finding that the party against whom estoppel is sought played “fast and loose with the
    courts.” New Hampshire, 
    532 U.S. at 750
     (quoting Scarano v. Central R. Co., 
    203 F.2d 510
    , 513
    (3d Cir. 1953)); see also Wight v. BankAmerica Corp., 
    219 F.3d 79
    , 89 (2d Cir. 2000) (“Judicial
    estoppel is designed to prevent a party who plays fast and loose with the courts from gaining
    unfair advantage through the deliberate adoption of inconsistent positions in successive suits.”).
    According to the ART, “there is no evidence in the record that Adelphia’s counsel said anything
    to [either bankruptcy court] that was intentionally untrue or misleading” and “Adelphia’s counsel
    told the court the truth and the whole truth that he knew at the time.” ART Br. at 82. This
    argument presupposes that judicial estoppel cannot apply unless counsel for the Adelphia D-I-P
    was confident, at the time of the asset sale, that fraudulent conveyance actions would soon be
    brought against the Banks. We disagree with this assumption. The purpose of judicial estoppel
    is not to look for, or punish, outright lies, but “to protect the integrity of the judicial process by
    prohibiting parties from deliberately changing positions according to the exigencies of the
    moment.” New Hampshire, 
    532 U.S. at 749-50
     (internal citation omitted). In our view a party
    puts the integrity of the judicial process at risk not only when it knowingly lies but when it takes
    28
    a position in the short term knowing that it may be on the verge of taking an inconsistent future
    action.
    The bankruptcy court focused on the subjective intent of the attorney who represented the
    Adelphia D-I-P at the sale hearing, and the parties have maintained this focus in their arguments
    before us. In the context of judicial estoppel, however, the proper focus is on the objective
    conduct of a party or its counsel. Although the Adelphia D-I-P may have lacked any intent to
    ratify the price Adelphia Corp. had paid for the loans in March 2000, it chose to use one set of
    lawyers in the Southern District of New York who were at least considering filing fraudulent
    transfer actions, while employing other lawyers in the Northern District of New York in the
    NFHLP proceeding without making them aware of the possibility that such actions could be
    filed. As we have noted, see supra pp. 8-9, the Adelphia D-I-P had several bases for knowing,
    well before the asset sale, that avoidance actions might be available to it. Indeed, since Adelphia
    D-I-P brought its massive fraudulent conveyance action less than three months after the approval
    of the sale, the inference is inescapable that that action was being actively contemplated at the
    very time of the proceeding in the NFHLP bankruptcy court. Whether or not the attorney who
    appeared for the Adelphia D-I-P at that proceeding was or should have been cognizant of the
    possibility of such an action, it is clear that his client was. A party cannot escape judicial
    estoppel by keeping its attorney in the dark about its plans.
    As we have already explained, res judicata and ratification do not bar the ART from
    bringing fraudulent conveyance actions with respect to HSBC and Key. But the doctrine of
    judicial estoppel serves a different jurisprudential purpose. Res judicata is designed to protect
    the finality of judgments, and it does not bar “causes of action [that are] parallel but distinct.”
    29
    King v. Fox, 
    418 F.3d 121
    , 131 (2d Cir. 2005). For the reasons stated, we are not convinced that
    rescission is the sole remedy for a fraudulent conveyance under New York law, so the ART is
    correct that its fraudulent conveyance actions against HSBC and Key are distinct from its
    advocacy of a free-and-clear sale of the hockey team’s assets, although the two proceedings were
    indubitably parallel. Ratification, for its part, is concerned with a party’s intentional
    relinquishment of a previously viable right to void a transaction, and here, the bankruptcy court’s
    findings suggest that, at least as to HSBC and Key, the Adelphia D-I-P did not possess the
    requisite intent to ratify but only the intent to avoid dealing with a certain set of claims for the
    time being.
    Judicial estoppel, on the other hand, is concerned not with the repose of individual claims
    but with the ability of courts to render their decisions based on faithful representations by
    counsel. Ratification and estoppel are “closely allied,” but “[r]atification has also been
    contrasted with estoppel in the sense that a party is bound by ratification because he or she
    intends to be bound and is willing to be, whereas estoppel arises out of the inducement of
    another to act to his or her prejudice.” N.Y.Jur.2d Estoppel § 87. We think it will be the rare
    case in which the silence of a party (or its counsel) is not adequate to cause ratification but
    exposes the party to judicial estoppel, but this is that rare case.
    Turning back to the three enumerated requirements for the application of judicial
    estoppel, we conclude that they are satisfied here. The most difficult to apply in this context is
    the first — the requirement that the party to be judicially estopped is now taking a position
    “clearly inconsistent with its earlier position.” DeRosa, 595 F.3d at 103 (quoting New
    Hampshire, 
    532 U.S. at 750-51
    ). We have already determined that the ART could have pursued
    30
    a money judgment notwithstanding the possibility of rescission even after the asset sale, and thus
    it might be argued that the ART’s current position is not clearly inconsistent with its silence at
    the asset sale. But we think it is enough that both the bankruptcy court and the banks
    undoubtedly would have approached the sale differently had Adelphia disclosed the possibility
    of fraudulent conveyance actions at the sale hearing. Under 
    11 U.S.C. § 363
    (f)(2), assets may be
    sold free and clear of the interest of “an entity other than the estate[] only if . . . such entity
    consents.” It is certainly true that after the sale in this case was confirmed, the Banks had no
    recourse to the hockey team assets that were once their collateral. But had the Banks been made
    aware of potential fraudulent conveyance actions before the sale was confirmed, rescission
    would have remained a legal possibility at that time, giving the Banks an interest in the assets.
    As the bankruptcy court made clear, there was “no doubt in th[e] [c]ourt’s mind” that, if the
    Banks then invoked § 363(f)(2) and withheld consent for the sale, it would have delayed
    approval of the sale until ownership of the lien rights were resolved. Bankr. Ct. Op. at 20-21.
    By taking the position before the bankruptcy court that it, and it alone, had an interest in
    the Construction and Revolver Loans at the time of the asset sale, the Adelphia D-I-P left that
    court with the distinct, and false, belief that there were no other entities that might have an
    interest in objecting to a free-and-clear sale. The position the ART takes now, however — that,
    in fact, even back at the time of the sale confirmation proceedings, the prices that had been paid
    for the loans resulted in fraudulent conveyances subject to rescission — cannot be reconciled
    with that earlier position.
    The second criterion for judicial estoppel — that the earlier position have been adopted
    in some manner by the court — is easily satisfied here, as the Adelphia D-I-P’s representations
    31
    were indispensable to the bankruptcy court’s willingness to enter the sale order. With respect to
    the third requirement, the Adelphia D-I-P gained a significant unfair advantage: immediate sale
    of the hockey team but preservation of its ability to bring avoidance actions against the Banks.
    The Banks, meanwhile, lost the ability to reclaim their collateral in the event that any fraudulent
    conveyance action proved successful. That a money judgment is one possible remedy for a
    fraudulent conveyance available in certain circumstances does not mean that the ART can
    blithely assume it is all the same to the Banks, who, as the bankruptcy court noted, might have
    simply preferred to accept rescission, reclaim their lien rights, and exercise them upon the assets.
    See Bankr. Ct. Op. at 20-21.
    The bankruptcy court’s opinion did not analyze the doctrine of judicial estoppel as a
    grounds for relief distinct from ratification,7 but we understand that court to have denied all
    relief to HSBC and Key — including, necessarily, relief based on judicial estoppel — simply
    because those two Banks did not appear at the § 363 sale hearing. In the context of judicial
    estoppel, this was error, because there was no reason why those Banks would have thought
    themselves obliged to appear at the sale hearing, and because judicial estoppel, unlike other
    equitable doctrines, is concerned with “the integrity of the judicial process, . . . [as opposed to]
    fairness between the parties.” OSRecovery, Inc. v. One Groupe Int’l., Inc., 
    462 F.3d 87
    , 93 n.3
    (2d Cir. 2006) (distinguishing judicial estoppel from equitable estoppel). As the bankruptcy
    court itself noted, “[a] simple mention of HSBC and Key by Adelphia would have caused this
    [c]ourt to bring them here.” Bankr. Ct. Op. at 28. Such an order would only have issued if the
    7
    At one point, the bankruptcy court opinion appears to reject the application of any
    common law doctrines at all, and declines to discuss the parties’ arguments with respect to the
    “common law elements of ratification, release, estoppel, waiver, etc.” Bankr. Ct. Op. at 27.
    32
    Adelphia D-I-P had informed the court that it was contemplating avoidance actions, and absent
    an invitation from the bankruptcy court, there was no reason for those Banks to appear, as it is
    uncontested that by the time of Adelphia Corp.’s bankruptcy it had acquired 100 percent
    ownership in those Banks’ interests in the Loans. We agree that HSBC and Key deserved no
    benefit from ratification or res judicata, but in considering whether to apply judicial estoppel a
    court must focus on the conduct of the party to be estopped, not the party seeking estoppel.
    Indeed, although a court is unlikely to be asked to apply judicial estoppel when no party has been
    prejudiced, it is unfair advantage to the potentially prejudiced party’s adversary that is the
    touchstone of the doctrine. See DeRosa, 595 F.3d at 103 (the doctrine of judicial estoppel
    applies “especially” when it prejudices “the party who has acquiesced in the position formerly
    taken by [the party to be estopped],” but the question presented when applying the doctrine is
    whether a party has successfully maintained a position in one proceeding and assumed a contrary
    position in another proceeding after his interests have changed).
    Far from preventing HSBC and Key from invoking the doctrine of judicial estoppel to
    their benefit, their absence from the sale hearing demonstrates precisely why the doctrine is
    necessary. Although we admire the bankruptcy court’s instinct to avoid deciding matters it may
    not have considered to be before it, it is that court, and its ability to discharge its responsibilities
    efficiently, that the doctrine protects. If the Adelphia D-I-P had ensured that its Western District
    lawyers informed the bankruptcy court of what its Southern District lawyers were contemplating,
    the bankruptcy court could have addressed the fairness of the sale at a continued hearing.
    The ART argues that neither the Banks nor the bankruptcy court could have stopped the
    sale, even if the Adelphia D-I-P’s counsel had spoken up, because 
    11 U.S.C. § 363
    (f)(5)
    33
    provides that an entity with an interest in assets to be sold may be “compelled, in a legal or
    equitable proceeding, to accept a money satisfaction of such interest.” Yet this approach would
    have required further proceedings, and a determination that the “sale [wa]s equitable for all
    concerned.” In re Investors Funding Corp. of N.Y., 
    592 F.2d 134
    , 138 (2d Cir. 1979). The
    bottom line is that by failing adequately to ensure that all of its lawyers were mindful of its
    potential causes of action, the Adelphia D-I-P allowed the mechanisms for fair and efficient
    resolution of its fraudulent conveyance actions to slip away, foregoing the speedy resolution of
    those claims at the sale hearing for a lengthy and costly proceeding in the NFHLP bankruptcy
    court and on this appeal, to be followed in the event of the ART’s success on this appeal by a
    continuation of the actions in the Adelphia bankruptcy court in a different district. We cannot
    say how the claims would have been resolved if appropriately addressed in the NFHLP
    bankruptcy court, but we can say that the Adelphia D-I-P’s failure to make that court aware of
    them judicially estops the ART from pursuing them now.
    V.     Quasi-estoppel
    Because we conclude that the ART’s fraudulent conveyance actions are barred under
    other doctrines, we need not, and do not, review the district court’s analysis of the doctrine of
    quasi-estoppel.
    CONCLUSION
    We affirm the judgment of the district court.
    34