Village at Knapp's Crossing, LLC v. Pioneer Ventures, LLC (In Re the Village at Knapp's Crossing, LLC) ( 2016 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16a0012n.06
Case No. 15-1754
FILED
UNITED STATES COURT OF APPEALS Jan 08, 2016
FOR THE SIXTH CIRCUIT DEBORAH S. HUNT, Clerk
In re: THE VILLAGE AT KNAPP’S )
CROSSING, LLC, )
)
Debtor. )
)
_____________________________________ )
)
) ON APPEAL FROM THE
THE VILLAGE AT KNAPP’S CROSSING, ) BANKRUPTCY APPELLATE
LLC, ) PANEL FOR THE SIXTH CIRCUIT
)
Appellant, )
)
v. )
)
PIONEER VENTURES, LLC, )
)
Appellee. )
BEFORE: MOORE and COOK, Circuit Judges; PEARSON, District Judge.
PER CURIAM. This appeal turns on whether the sale of the Debtor’s primary asset
mooted its appeal of the bankruptcy court’s order converting the Debtor’s bankruptcy case from
Chapter 11 to Chapter 7 of the Bankruptcy Code. The Bankruptcy Appellate Panel (BAP) held

The Honorable Benita Y. Pearson, United States District Judge for the Northern District
of Ohio, sitting by designation.
Case No. 15-1754
In re: The Village at Knapp’s Crossing, LLC
that the sale mooted the conversion-order appeal. The Debtor now appeals the BAP’s mootness
determination, as well as the bankruptcy court’s conversion order. We AFFIRM.
The Debtor appealed to the BAP from a bankruptcy-court order converting its case from
Chapter 11 to Chapter 7 of the Bankruptcy Code, but failed to seek or obtain a stay of the
conversion order during the appeal’s pendency. Following the case’s conversion to Chapter 7,
the bankruptcy court authorized the sale of the Debtor’s primary asset—three properties located
at a busy intersection in Grand Rapids, Michigan that the Debtor intended to develop as a
shopping complex (VKC Property). Yet the Debtor neither obtained a stay nor appealed the
order authorizing the VKC Property sale. Pioneer Ventures, LLC purchased that property. The
Debtor’s Chapter 11 plan depended on its developing the VKC Property, and the conversion-
order appeal offered no mechanism to return the asset to the Debtor’s bankruptcy estate.
Determining that a favorable decision would therefore afford the Debtor no relief, the BAP
dismissed the conversion-order appeal as constitutionally moot.
We review mootness determinations de novo, Coal. for Gov’t Procurement v. Fed.
Prison Indus., Inc., 365 F.3d 435, 458 (6th Cir. 2004), affirming if events occur “during the
pendency of the appeal that make it ‘impossible for the court to grant any effectual relief
whatever.’” Id. (quoting Church of Scientology of Cal. v. United States, 506 U.S. 9, 12 (1992)).
We agree with the BAP that the VKC Property sale mooted the Debtor’s appeal of the
conversion order. As Debtor’s counsel concedes, the Debtor’s Chapter 11 plan cannot succeed
without the VKC Property. Debtor not only failed to obtain a stay of either the conversion order
or sale-authorization order, but also failed to appeal the sale-authorization order. This appeal of
the conversion order therefore offers no mechanism to unwind the VKC Property sale. Without
a path to provide effective relief, the Debtor’s appeal is moot. See In re Roller, 999 F.2d 346-2-
Case No. 15-1754
In re: The Village at Knapp’s Crossing, LLC
(8th Cir. 1993) (affirming the dismissal as moot of bankruptcy petitioners’ appeal from an order
reinstating their Chapter 12 bankruptcy petition because the petitioners’ assets had been
liquidated following the case’s conversion from Chapter 12 to Chapter 7, and the petitioners
failed to obtain a stay of either the conversion order or liquidation sales); In re Cook, 730 F.2d
1324, 1326 (9th Cir. 1984) (dismissing as moot an appeal of a forfeiture decree—entered under
Chapter 11—that sought the return of property discharged under Chapter 7 because “the
propriety of the discharge under Chapter 7 has not been appealed and is not before us”).
The Bankruptcy Code bolsters our conclusion that we lack a procedural path to provide
effective relief. See 11 U.S.C. § 363(m). Because the bankruptcy court ordered the VKC
Property sale pursuant to 11 U.S.C. § 363(b), and the Debtor neither obtained a stay of the sale-
authorization order nor argued that Pioneer lacked good faith in purchasing the VKC Property,
§ 363(m) prevents this court from affecting the sale’s validity. See 11 U.S.C. § 363(m)
(preventing a “reversal or modification on appeal of an authorization” to sell property under
§ 363(b) from “affect[ing] the validity of a sale . . . under such authorization” to a good-faith
purchaser unless the sale was stayed pending appeal). Section 363(m) also prevents the Debtor’s
indirect attack on the sale-authorization order by way of this conversion-order appeal. See In re
Parker, 499 F.3d 616, 620 (6th Cir. 2007) (determining that 11 U.S.C. § 363(m) prevented
indirect attempts to attack the validity of a bankruptcy court’s order of sale issued under § 363
when the appellant failed to obtain a stay of that order).
Agreeing that the VKC Property sale mooted this appeal, we AFFIRM.
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