Legal Case Summary

Good morning. May I please the Court, Court in the Shell, from Ashford Shell, on behalf of the Pellan Quad Graphics Inc. I respectfully request reservations, three minutes for your question. The Equivalent Mootness Doctrine is a judge-made document that is supposed to be a very limited and narrow exception to the Court's virtually unflagging obligation to exercise your jurisdiction. Well, Mrs. Edmund, I'm with you. I gave a den-judge leader, but the problem is that seven of our ten colleagues disagreed with our position. So what do we do given the fact that we've got in-rate continental sitting out there? Well, there's a number of things the Court can do. First of all, in continental, when this Court adopted the doctrine in a very narrow on bank decision, the Court never considered whether or not it was consistent with or authorized under the statutory jurisdictional provisions governing the Bank of Secure, specifically sections 28 USC 157 and 28 USC 158. Those provisions require that any bankruptcy court final order that's entered be subject to a peltier's jurisdiction. It's true. It wasn't challenged on that basis, but continental airlines itself talked about it involving the discretionary balancing of equitable and credential factors, rather than the limits of federal courts authority under Article 3, which indicates that the majority had given at least some thought to it, even though it wasn't raised and argued in those terms. So how short of unbunk reconsideration can we take issue with the viability of the doctrine in the circuit? Well, there's another number of options. First of all, to the extent that the Court did determine that it wanted to use the verve over roll and over roll continental, it could so respond to order of re-hearing on bank in this case to consider that. But sort of overruling, expressly overruling continental, the Court can limit, modify, clarify, and do all sorts of things sort of over rolling it. No, you say all sorts of things. I'm visualizing 11th College. We mean that, share your view of the prevalence of an unbunk decision. Well, for example, one of the legal issues that the Third Circuit has not cited is, does Section 28, USC 157 and 158, and also Article 3 of the Constitution require that a bankruptcy court's decision on a confirmation order be subject to appeal? So when you make that argument, I understand obviously you're raising a constitutional argument as to Article 3 jurisdiction. In making the argument as you do here and in your briefs on the statute, are you arguing that there's a statutory mandate for jurisdiction? Or is that sort of a permutation of your constitutional argument that it's a violation of separation of powers for the Court to use this judicially created doctrine given the language of the statute? There's two distinct issues here, and I think they were illustrated well in Sternby Marshall. There's the statutory authority of the bankruptcy court to make decisions in act, and then there's the constitutional restrictions of order to be great. Under the statute, Congress has decided the bankruptcy court can't enter final orders and judgments on in confirmation proceedings, subject to review by the District Court. So the authority vested in the bankruptcy court by Congress is limited by that review provision. If you take away the review, you take away the bankruptcy court's authority because it is conditioned upon that. So the Congress has determined that the authority that they've given to the bankruptcy court and keep in mind that this is a very fragile jurisdictional brand that they've done is subject to that. That's statutory constraints. Then you have the constitutional constraints. In Stern, the court actually found that although the statute allowed the bankruptcy court to make decisions in Stern type cases, the Article III constitutional provisions did not allow. So there are two separate issues. The constitutional issue is that the court is ever reviewed by an Article III court. You're talking about substantial rights here. My client had this single largest claim in this case of $10 million

. That claim was wiped out in confirmation. We raised substantial objections to confirmation. We have the right to have that reviewed the bankruptcy court's determinations by the District Court. Otherwise, as does the Toledo warrant, it essentially becomes a per se rule. If you don't have a stay pending appeal, the way the test works is you can't seek to overturn the whole confirmation order. You can partial out pieces of it, but you really will never get Article III review of the entire order. Because that's not the way the test works. Can you address, you mentioned Stern, obviously, but you also made reference to the virtually unflagging obligation of the Court's exercise jurisdiction. Besides Stern, what, if any, intervening developments or cases do you have in mind, either from the Supreme Court or perhaps our own circuit's experience, having to have in this doctrine to exceptional circumstances that would warrant reconsideration on mock? Well, it's not only to the Supreme Court issue decisions thermally, marshly, recently issued another decision at the executive benefits. And I think what's important about that decision, and this Court has said in Mara versus Bellisky, 719F-3168, 2013, that this Court must look at Dicta by the Supreme Court. That the Supreme Court does not have the capacity to review every decision that comes before it. So they pick and choose cases, and this Court recognized it's important to look at the cases that the Supreme Court hears, and read between the lines and look at Dicta and see where the Court is going in order to facilitate the resolution of things like this. And I think what's important about the executive benefits insurance agency decision is two things. First of all, it talks about the argument of a gap in the code. In that case, the Court's found that when you have this Stern issue, because it doesn't fit within the Court proceedings anymore, you can't adjudicate it or that. And it's not specifically a non-Core. They said there's a gap in the code. The Supreme Court rejected that and said there's no gap here. There's a saving clause in the statute, and to the extent that it doesn't fit in the Court proceedings anymore, because we've deemed it can't, you adjudicated under the non-Core proceedings. And I think that's telling, because the Equital Moons document is based upon a so-called gap that the courts have perceived in the bankruptcy code. There's Section 363 and 364, both of which are Congressional in that statutory moon-ness provisions. If you don't get a state pending appeal under 363 or under 364, your appeal rights are extinguished. That was created by Congress. Congress chose to do that. Court's looking at confirmation and not seeing a similar provision, proceed that as a gap. There is no gap. The legislation chose which provisions to require a stay in which not to. The statute's clear. Where Congress chooses not to speak on something, the implication is, and they have spoken on it in other contexts, the implication is that they did it purposefully. So there is no gap. I don't think the Supreme Court was indicating that in the executive benefits

. If you're going to go on a gap in the statute, it better be pretty clear, because here I don't see a gap. And I don't think the Supreme Court would see a gap as it didn't in the executive benefits. They also said in the executive benefits. They furred that decision because essentially at the end of the day, the party got what they wanted, which was reviewed by an Article III Court. So the courts had effectively looked. You might have not gotten it procedurally the way you wanted, but you did get Article III review. And that's what the Court emphasized. Emphasized that the statute, 157 and 158, required review by an Article III Court. And I think the Supreme Court was essentially tipping their hands and saying, look, this is what the statute says. And we're following the statute. The statute requires Article III review. When it comes and to what extent might vary whether it's a stern case or a non-stern case, and in a stern case, there's full denover review of both the fashion findings and the legal conclusions, versus a non-stern case of court proceeding. It's denover review of the legal issues and clearly erroneous on the facial issues. Stern, obviously, is an equitable mootness case. Is there any case you can point us to that holds that Article III review is required the confirmation plan? I can't point to a case, but the statute clearly says that it is. Let me say clearly. You can read the statute that way, or much of the statute says it's so clearly that it would necessarily negate the possibility of equitable mootness working. Well, the statute says specifically says that a bankruptcy court can enter final orders, and I don't have the language right here in front of me, subject to the Section 28, U.S.C. 158. How do you answer, and Section 1, I'm sorry, Section 28, U.S.C. 158, provides for a Pellet review. So the statute is playing on its face. I don't think there's any case that says the statute doesn't plainly say that. How do you then answer, Mr. Srotas' point that the statute also in 1334 C.1 provides that a district court can abstain from particular proceedings, quote, in the interest of justice? What does that cover? Absolutely. The court has specific extension provisions, and they talk about exactly what kind of proceedings the court can abstain

. And there is a catch-all phrase in the interest of justice, but to argue that denying the right to appeal a confirmation order per se, if there's no stay, is in the interest of justice. I don't know what interest that is. I mean, finality certainly has been the articulated interest that the court is trying to pronounce, and finality certainly I have represented debtors in the past trying to deal with that issue. It is an issue, and I'm not saying that finality is not an issue. I'm just saying who is the proper body to deal with it? Is it the courts? Is it Congress? Is it the parties themselves to try and arrange for some negotiate, some interim provisional remedies pending an appeal? Who is the proper body to address that issue and how to address it? Is the matter of quacking which broad enough to encompass those situations where a court is allowed to abstain? Is that broad enough to encompass this doctrine? That's not why not. A fact in Bush abstention. The most abstention doctrines are based upon the idea of sovereign sovereign dissauverings and the fact that there's another form. And it's an exercise of jurisdiction in usually in the original sense, in the sense that the court abstains and decides they're not going to hear the case at all. And then it's better heard in the state court or it's better heard somewhere else, even in bankruptcy. Most of the abstention provisions that are codified deal with the fact that there's either state court issues that predominate and the court case should be either remanded if it's been removed to bankruptcy court or that there's a better form to adjudicate those issues. We're not talking about that type of abstention here. We're talking about the federal courts have exercised jurisdiction over the case. They've rolled on the merits, they've entered a decision. This is the appeal for that. This language in Quackenbridge, that's what I was referring to, where it talks about the long-for abstention in situations and they do talk about the federal state and comedy. Doesn't they also say, for example, abstention is warranted for comedy or a rise judicial administration? If we have a situation with a plan, the sponsor may walk away and it's a kind of a catch for you to admit. But if there's a determination that there's a substantial risk that plans possible, walk away and that the bankruptcy's confirmation will be endone, why wouldn't equitable, the echo rogher in here fit within the language of abstaining for the purposes of a rise judicial administration? Because it's not a rise judicial administration to deny the fundamental right of a party to appeal. This is a case where the bankruptcy court made numerous, numerous, factual and legal errors. And initially didn't even confirm the plan made the parties come back and make the modifications to fit it in, try and fit it into the code. There were so many violations of the code here. Certainly she was not going to grant us a state pending appeal and say that she was wrong on the merits. I never required that. And then we go to the district court and the district court and we're on considering our state application. Pickton chose the issues that he actually addressed and he really didn't address most of the legal errors that we argued and denied the stay. And then we next move on as is most cases to the equitable moodness and by then it's too late. By then the court says, well, if you want to overturn the plan, you can't. How is that ever a judicial efficiency at the risk of a pellets right to appeal those decisions? Essentially let's the bankruptcy court be able to confirm a plan over the strung with objections of parties and then just have it get rubber stamped through the system. And most plans now contain the condition precedent to the effectiveness of the plan. One of those standard boilerplate conditions is that the order be final. I see my time is up. Believe me, it's not up

. Let's go ahead to be. One of the conditions precedents is standard and most plans I've seen lately is that the confirmation order be a final order. Meaning no more appeals, time is lapsen, no appeals pending. That condition precedent is waived by the people who are in control. The debt or the plan sponsor, the committee, whoever is controlling the negotiation of the plan. They have the option to waive that. If they waive it, they waive it at their peril. That should not be harm, my client should not be harmed because the plan sponsor in this case chose to waive that condition and proceed at its peril. How is it equitable to then turn around and deny my client the appeal right because the plan sponsor chose to proceed? I'd like to talk about the application of the doctrine and the errors from your standpoint that the district court made. It seems that your argument is there's such a stark contrast between cases where the doctrine is normally applicable and in this case. Does our inquiry end as simply as if we find that this wasn't a complex reorganization then it doesn't apply or is the argument more focused on look. None of the five factors really militate in their paper and this was just wrong on every level. Well, the first part of the question should you stop at that this was not a complex case. The court has indicated that the narrow exception should only apply in complex cases. We argue that this was actually a requirement that the court imposes that it has said this is only applies in complex cases with intricate plans that need to be unraveled. Which of the five factors does that get into? It's stated in the opinions as a non-state as one of the factors. In the test, that's what the district court ruled. The district court said it's not one of the factors so I'm not going to consider it. I think it does factor into the consideration of whether or not you can reverse undo the plan. But the reality is when you look at the factors, the factor that parties always get hung up on including my client is are you seeking to unravel the plan? Are you seeking to undo the entire confirmation? And in fact, my client is. And is in fact, they're right. We also have a separate request for relief which is to strike certain releases because the court has been inclined in the past to parse through confirmation and take out pieces that won't affect the entire plan. But that's really the problem when you go through the factors and you look at reliance by third parties. In this case, there's no reliance by third parties on the actual plan. There were ordinary course transactions entered into after a consummation, after they claim consummation such as hiring people and things like that. But that's just ordinary business transactions. That's not like issuing stock under a plan and selling it on the stock exchange and third parties coming and buying stock issued under a plan. They really could not point to third parties that had relied on this plan. Is it your position that there is some different plan of reorganization that might be forged or is it that the solution here this should be converted to chapter 7 bankruptcy? We had two issues. One was we thought that the liquidation value was greater than what our client was going to receive under the plan for two reasons. One, because we thought the assets were undervalued

. Two, there were significant releases, releasing third parties insiders that we thought had value. We put on expert testimony about the value of the bankruptcy court rejected our evaluation. We thought that those had value and we thought that if the case was liquidated and those actions were pursued, the creditors would get more. And keep in mind, my client is about 90% of the pot of creditors. If we're talking about chapter 7, then would it be necessary to retract the distributions that have been made? Yes and no. No to the extent that some of the distributions remain on admin claims, administrative claims that it has to pay to anyway. The amount of distributions that have actually been made to unsecure creditors, again, my client is 90% of approximately 90% of the pool. So the amount is not significant, dollar wise. And most of the people who have received distributions of them, my client still do business with the debtor. So they could easily just set it off against the amounts, too. But it's not a significant amount. There were not a lot of creditors in this case and not a lot of creditors owed a lot of money. So this is really about the releases to the seeming third parties who you're claiming are insiders who basically, from your client standpoint, got away with murder. They essentially got releases and in fact, when field aired, when she appell the releases, she did not consider all the factors required to approve them. Specifically, she did not consider whether there was consideration for those releases. And in fact, there were not. There was some claimed release that one of the parties was releasing certain claims against the estate. But those claims were, in our opinion, not inflated. We didn't object to them because there was no really no purpose since they were being released. But there really was no consideration. In fact, Judge Woodenfield never ever found that there was consideration for the releases, which is one of the legal errors that we alleged below. That's requirement. So in addition to liquidation, we also had an issue with the sale. We would have fully supported a sale that we thought was marketed that complied with LaSalle and the absolute priority role. But in this case, it was, it was a sale to somebody they found there was another offer that they claim they never saw and writing to counsel for the debt or that claim that they never saw it. But there was no, there was no 363 sale. There was no auction. There was no advertising. There was not sufficient marketing to maximize the value of the state. It was it was a plan proposed by the debtor during exclusivity. The exclusivity was never opened up and this was a fire, a hand pick by the debtor originally they had proposed a plan where the principles wife, I shouldn't say the principle, the president of the company CEO's wife, who was a member of the company that was the holder of the company

. I was going to buy back her interest for a hundred thousand dollars. The court did not come from that plan because she found that it did not comply with the outside priority role because new value was insufficient. So instead they went out and found another purchaser who paid $200,000. But given that it's a third party and that it's, it's, it's, it's a fair state, an arms length transaction. What is the basis for your absolute priority will claim at this point? Because prior to even bringing in that new purchaser, the debtor had drafted and proposed a new plan and under the new plan essentially laid out the price. It says $200,000. It laid out all the terms including lucrative employment contracts for the firm as is heavily. And that was before they even had the plan sponsor. Then they identified a plan sponsor, brother plan sponsor, who basically complied with the terms that Mr. Heverley imposed upon them. The only change was instead of Mrs. Heverley being paid $300,000 a year as president of the company working from her marital home, they allocated the salary between Mr. Heverley and Mrs. Heverley. But essentially our argument with absolute with the absolute priority role was they're retaining property under this plan on accounting their equity interests. They dictated what the terms of the sale would be even long before they even brought in the plan sponsor. They were the ones who established the terms. They were the ones who controlled the process. And they were the ones who reap substantial benefits under this because of their equity interests. And even though they didn't retain equity, that's not what the absolute priority role said. It says you can't retain any property under the plan unless unsecured predators are paid and fall. So there's came back to the heart of the equitable problems here for this problem. And you, representing your client, have been meticulous in taking every step that in every eye crossing every teeth, protecting your clients, rights asking for a stay, killing the denial of the stay. What would happen in this case if your client had been represented by a lawyer where the confirmation plan had been approved and there's been no attempt whatsoever to hold off to have the article to be take a look at that. And then the same situation occurs and the discord takes a look at it and says, well, you know, it's been whatever it is two or three years. And if I unscrew this, if I put the toothpaste back into the tube, the plan sponsor is going to walk away. The person who's challenging this really did not protect their rights. I'm going to simply abstain and let the confirmation plan go into place. What would be wrong with it? It's kind of like a latch is different. So what would be wrong with that? I think what you're saying is there's nothing wrong with it. I think it's consistent with the reason behind the doctrine

. The purpose number is the same jurisdictional issue. Because, well, the jurisdictional issue aside from that, you were talking about, I apologize. I thought you meant on the equitable, mood-space. The purpose of the doctrine, and I'm quoting from Nordov, was to prevent a court from unscramble complex bankruptcy reorganizations when the appeal inquiry should have acted before the plan became extremely difficult to retract. Right. But if it's a jurisdictional issue, that last factor should be irrelevant. That's why I boarded my hypothetical away. I didn't, if we either have jurisdiction or not, we have an article of the equity that has jurisdiction, but doesn't have jurisdiction. If the jurisdiction turns on what is ten month to a latch is defense, how vestidious the objection party has been in trying to build in a state of the status quo, if you will, until an article of the court can look at it. That's what it turns on. That does not arise out of the language of any of the bankruptcy code, who of the article three, and trying to figure out in terms of the equitable moodness, how you rationalize that distinction. Does that make sense? That question? I understand what you're saying, Your Honor. And I think that... Is there anything in terms of the procedure, any deadlines that are imposed by statute that in terms of a right to appeal that might be relevant? Perhaps you can address that too when your answer? I think that there's two issues. If the court is going to continue to... If the equitable mood is documents going to continue to survive, I think it should be put back to its original purpose, which was to recognize the inequity of a party sitting on its rights, failing to seek a stay while the debtor goes out and consummates a plan, and then wanting to look for an option. I'm waiting there, but that's to me the limitation. Where does that limitation come from? That comes from the courts. It was a judge made doctrine, and that's how it was originally formulated. What happened was, as parties realized that they had to seek a stay or be subject to it, they started to seek a stay, as my client did. Once you seek a stay, I don't think the equitable mood is doctrine should even come into play. But if it's a judge made doctrine that you're conceding is valid in some circumstances and not others, I'm trying to tie that to some analysis, some analytical framework, where it would be consistent. I don't think it's statutorily or constitutionally permitted even in that context. Okay, that's what I'm trying to get. I don't think it has a valid basis under the statute, under the Constitution, under any basis. But if I'm looking at the worst case scenario that the court's equitable mood is as here to stay, I think it needs to be set back to what it really was, which was a narrow exception. How would we do that? I would eliminate two parties who failed to seek a stay

. But how do we get out of it? Because that's the equitable consideration that started all along. If the equity says, if you sit on your rights and don't seek a stay, well that should factor in whether or not you should be able to go forward on this appeal. Okay, but again, what did that doesn't come out of 15 to 17? What does that come from? How do we, I'm trying to get out the guts of the origin of this thing? In one situation, the hypothetical I put you, it makes perfect sense. In your situation, I mean, that seems to me exactly what Judge of Edo was talking about in the dissent in Maccontinental, it doesn't make an awful lot of sense. It is a catch-22, in the five or six point analysis that you looked to, it really all boils down to what's a stay imposed. Because it wants to stay as imposed, then all the other factors fall in the line. It's a five-per-chest that boils down to one factor. And that's one of the reasons I'm troubled by it. But in trying to look at this thing doctrinarily, in a situation where equity does not work in favor of the personal subject, that seems to me the same analysis and approach should apply. And I'm having trouble trying to find out how I would do that because the jurisdiction, again, see there, it isn't there. And the last year, maybe this is the answer. If latches is the decision, latches is the basis for saying we're not going to undo this plan. And the district court, the third circuit court says that it's exercising jurisdiction. It's not abstaining. It's simply exercising jurisdiction and dismissing the appeal based upon the doctrine of latches, which is different from saying we're not going to understand this confirmation and we're going to abstain. It's a result of the same, but in one sense, it is an exercise of jurisdiction. You're just willing upon latches. And it does make sense because if a party sits on their rights and doesn't think it's a day that they have the right to do, then that's an equitable consideration. But in a case like this, where we did everything we could, we even sought and jumped to relieve after we were denied a stay arguing that the court should enjoy certain acts that might actively move the appeal. So how is that different in principle than the equitable mootness doctrine as it was described in continental because the court said explicitly that it was viewing the doctrine as a prudential one and discretionary one and not something that related to the limits of Article 3 jurisdiction. I mean, I'm not sure I understand your question. My repository is a growth. Well, if I guess I'm trying to understand what the distinction would be if you don't object to the concept of taking jurisdiction, but on a prudential basis with a doctrine like latches, not reaching the merits. Isn't that what the court in continental airlines said that the equitable mootness doctrine was a similar kind of prudential doctrine rather than an extension doctrine rather than truly a jurisdictional extension to the extent they said that in continental in practice, it has not been applied that way. This is a perfect example. We exercise all our rights to seek a stay. We appeal those denials. But when we got to the district court in the equitable mootness, one of the primary questions, what are you seeking to undo the plan? And we are. And the way, you know, is it a prudential consideration to say if you're appealing and you haven't gotten a stay, you cannot appeal the confirmation work because that's a, that's a per se rule now is become a per se rule based upon the test. If you seek to overturn the confirmation and send them back into bankruptcy, you have no appeal rights. I don't see how that, that really adopts any prudential consideration

. I mean, that's denying appeal rights. It's exactly the same now it operates as 363 and 364 do. The doctrine in practice now operates that way. And the debtor and sponsors and investors have significant control at the mercy of the creditors to make that happen. They can put the condition precedent in the plan. Then once they see what happens, a confirmation they could decide what their odds are of prevailing on equitable mootness, irrespective of the odds of prevailing on appeal. And wait that and determine whether or not they're going to wave that condition precedent and go forward with the plan or if they're worried that maybe it won't be equitable moot, then they can decide to wait. So it's all within their control. And why should the doctrine be so uncertain? Why should parties have to sit and and and determine, okay, should we go forward or not? Is it going to be equity moot? Isn't the whole purpose of the doctrine of finality? How does that foster finality to have parties kind of betting on whether or not the appeal is going to be equity moot and whether they should go forward? It's great. It's not, I mean, the test unfortunately has become a per se role, but for things like the releases, it's very great when you're trying to cancel a client, whether or not that's going to be stricken as equity moot or whether you're going to be able to go forward or not. It's not a policy that furthers the purpose, I think it was designed for, which is the problem with finality and plans. How does a big corporation implement a plan pending on appeal? I mean, there's a problem. And the question is, how do you resolve it? And our position is equitable in the mootness. Not only is it not correct solution because it doesn't work, but it's, it's not sound on the constitution. And it's not sound on the statutory jurisdiction provisions for bankruptcy. There's other solutions. You can, the court has authority to probably propagate rules. You can do extra-dited procedures for appeals and confirmation orders. You can do partial appeals, they know of the legal issues raised in confirmation. You can do interlocatory appeals of legal issues being raised in confirmation, make the parties identify them up front, have the court roll on the legal issues in the summary judgment matter before confirmation and have that appeal pending while the confirmation hearing is going forward. You can determine that. I'll take you word for it. There's a lot of difference. You say it sometime, I think, but we'll hear from you again. All right. May I ask something to consider for for Revital and something I'd be interested in hearing from Mr. Sarota as well. If the court were even open to reconsidering the doctrine, but concluded on the facts here that there was an abusive discretion, does the doctrine of what's sometimes called constitutional avoidance, you know, or final rule, does that require that we address the matter as an abusive discretion or since we're not dealing with something like statutory construction or principles of comedy or federalism that we could still address the constitutional challenge that you've raised. And again, you can, if you want to address that on Revital, feel free to be so. Okay. Thank you

. Good afternoon, Your Honours. I was wrote a call shots on behalf of one to one communications. The district court did not abuse its discretion and most respectfully this court should affirm the district court's ruling that this record relied on 18 years of precedent starting with an inbound decision of this court as well. I was talking about 18 years of precedent. It would appear in analyzing the factual scenario here that the type of bankruptcy that we have here is not the type that is generally considered a complex reorganization and might not fall into the category of cases that have been analyzed over those 18 years since continental. So tell me if you would why a case that at least seemingly is very distinct and in size and complexity clearly from continental, but continental's prodigy as well. Yes, Judge. It is true, Your Honour, that the equitable mootness doctrine appears most frequently in the context of large complicated chapter 11s, large being defined by complexity, issuance of public securities as well as, you know, big dollars. But there's nothing in any of those decisions that say that doctrine shouldn't be applied in situations where third parties, investors, creditors, and others rely on the confirmation order and would be harmed. What is that not the case? It's not the case in several decisions of this circuit, Sam Crude and two others. No, no, I mean, I'm sorry, in an articulate way. Question, what is it not the case that third parties would be relying upon agreements that have been reached? You can have a situation, Judge, where a plan of reorganization is based predominantly on a commitment to pay in the future, that there's been no current exchange of value. There's been no third party investment, a debtor reorganizes itself. It proposes its own plan without the infusion of third party money. I stand before this Court today not having represented the debtor in the chapter 11 proceedings. I represented the plan sponsor, the individual that put money into this program that relied on the chapter 11, that had his new company re-organized that, or signed executory contracts with counter parties, that distributed proceeds to creditors. So there's nothing in the doctrine that says it's limited to. What's the detriment suffered when your adversary did what it would seem that the doctrine requires you to do, which is, applied for stay and has taken whatever opportunities she can to have the status quo so that there aren't third parties who will suffer a detriment. I think the one thing that could have stopped the plan bed in its tracks, of course, would have been the posting of a bond. It was never offered. It was never discussed. But I don't think it's critical. I think what's critical is what happens post-conformation, what is the harm to third parties, what is done with this plan, and how is it pursued after the Court approves it? Many decisions of this circuit deal with the situation, Continentals wanted them, where there are very meticulous adversaries that move for a stay pending appeal and this stays denied. And the Court has still concluded that it's equitably moved. And this circuit, with seven published decisions, is not some outlier on equitable mootness, which is why I also think that Judge Linarra should be confirmed. But every state, he used the way I'm looking at it. Seven published cases in 20 years, and I'm not a back-from-seat prior petitioner. I don't want to be. The statistics that we're all available to us, tell us there are thousands upon thousands of cases that go through. Yet you can only look to it, which is not fine. Continental plus seven in 20 years, that means it's rarely applied. And I know that it's applied, you know, around the country, other circuits. But I'm sure that if they did an intra-circuit analysis, it would also be rarely applied. So it sounds like what's happening here is that Judge Linarra is applying it in an instance that maybe is quite distinct from what the normal application of the equitable mootness doctrine would be. Judge, when I refer to seven cases, I refer to seven published decisions. My understanding that there are numerous other applications that have made a trade before this Court. And appeals don't matter to me. I'm pointing out that I think the doctrine is quite prevalent alive and brought before this circuit and others on a fairly frequent basis. But Judge Linarra's in his decision went through very meticulously those continental factors. He was keenly aware of how this circuit has applied the doctrine in large complex cases. And he went factor by factor in his decision and addressed each one of them. And in fact, address... All five factors brought down to whether or not a state has been imposed. If you have a state, if a state is not imposed, and then the relatively lengthy process carries out. The vicissitudes of the law, I guess, is just to refer to it. Although all those five factors involved on that one inquiry. I don't think so, Your Honor. I think that if you can establish, for example, lack of harm, if you can question substantial consummation of a plan, if you can offer an option to carve out some relief from the plan. And this circuit has done that in the past when dealing with professional indemnifications or challenges to attorneys fees, you can propose ways not to do violence to the plan in third parties and to seek some relief. Judge Linarra's addressed that issue head on when he said that no such proposal was made. How does that really place any limits on the doctrine? And following one on Judge Greenway's question, isn't it going to be virtually every reorganization where there is some third party reliance, whether it's employees or contracts that have been entered into or a plan sponsor, distributions that have been made to third parties? How do you cabin it if what we're looking at is some, is third party injury and substantial confirmation, which just means that distributions have begun, not that they've concluded. Does that incentive for the debtor to use this doctrine as a sword, not a shield, and rush to try to get substantial confirmation on the record? Judge, the best answer to that question is that the doctrine has been limited and narrowed by this circuit opinion after opinion. But in three of the seven published opinions that you referenced and fourth that's an NPO, this court has had to reverse because the district court applied it too broadly. Doesn't that tell us something from our own experience in trying to limit it when we've said in every presidential opinion that it's supposed to be narrow? But nearly half of those have needed to be reversed that the district courts are not using it, and perhaps given the way that the standards articulated aren't able to apply this in a way that really respects the jurisdiction that were obligated to exercise. And that's respectfully judged what this court does and did so in Semcrood because there are examples where debtors, in fact, use the doctrine as a sword and not a shield. And Semcrood is the primary example of that where the debtor attempted to deprive a party from having an adversary proceeding litigated and then embedded that in a plan and used the doctrine of equitable mootness to argue that that adversary proceeding should have never seen the light of day. And the third circuit said that was an abuse of discretion. And by the way, the $207,000 that were issued in that case on $160 million of distributable could not conceivably rise to the level of applying this narrow doctrine. And so what I think the circuit has seen is a migration from Continental, which is a planned construct, equitable mootness doctrine, to debtors using it, some would argue misusing it as a sword to shoehorn in other areas, whether it's objecting to a Thurnees fees, indemnification provisions, and so the circuit has narrowed it extensively. Kagan Well, why wasn't that the case here? I mean, is it true that at the March 19 hearing, which was on the motion for a stay that your client announced its intent to invoke equitable mootness? And that's before the plan even took effect when there was litigation about a stay

. And I know that it's applied, you know, around the country, other circuits. But I'm sure that if they did an intra-circuit analysis, it would also be rarely applied. So it sounds like what's happening here is that Judge Linarra is applying it in an instance that maybe is quite distinct from what the normal application of the equitable mootness doctrine would be. Judge, when I refer to seven cases, I refer to seven published decisions. My understanding that there are numerous other applications that have made a trade before this Court. And appeals don't matter to me. I'm pointing out that I think the doctrine is quite prevalent alive and brought before this circuit and others on a fairly frequent basis. But Judge Linarra's in his decision went through very meticulously those continental factors. He was keenly aware of how this circuit has applied the doctrine in large complex cases. And he went factor by factor in his decision and addressed each one of them. And in fact, address... All five factors brought down to whether or not a state has been imposed. If you have a state, if a state is not imposed, and then the relatively lengthy process carries out. The vicissitudes of the law, I guess, is just to refer to it. Although all those five factors involved on that one inquiry. I don't think so, Your Honor. I think that if you can establish, for example, lack of harm, if you can question substantial consummation of a plan, if you can offer an option to carve out some relief from the plan. And this circuit has done that in the past when dealing with professional indemnifications or challenges to attorneys fees, you can propose ways not to do violence to the plan in third parties and to seek some relief. Judge Linarra's addressed that issue head on when he said that no such proposal was made. How does that really place any limits on the doctrine? And following one on Judge Greenway's question, isn't it going to be virtually every reorganization where there is some third party reliance, whether it's employees or contracts that have been entered into or a plan sponsor, distributions that have been made to third parties? How do you cabin it if what we're looking at is some, is third party injury and substantial confirmation, which just means that distributions have begun, not that they've concluded. Does that incentive for the debtor to use this doctrine as a sword, not a shield, and rush to try to get substantial confirmation on the record? Judge, the best answer to that question is that the doctrine has been limited and narrowed by this circuit opinion after opinion. But in three of the seven published opinions that you referenced and fourth that's an NPO, this court has had to reverse because the district court applied it too broadly. Doesn't that tell us something from our own experience in trying to limit it when we've said in every presidential opinion that it's supposed to be narrow? But nearly half of those have needed to be reversed that the district courts are not using it, and perhaps given the way that the standards articulated aren't able to apply this in a way that really respects the jurisdiction that were obligated to exercise. And that's respectfully judged what this court does and did so in Semcrood because there are examples where debtors, in fact, use the doctrine as a sword and not a shield. And Semcrood is the primary example of that where the debtor attempted to deprive a party from having an adversary proceeding litigated and then embedded that in a plan and used the doctrine of equitable mootness to argue that that adversary proceeding should have never seen the light of day. And the third circuit said that was an abuse of discretion. And by the way, the $207,000 that were issued in that case on $160 million of distributable could not conceivably rise to the level of applying this narrow doctrine. And so what I think the circuit has seen is a migration from Continental, which is a planned construct, equitable mootness doctrine, to debtors using it, some would argue misusing it as a sword to shoehorn in other areas, whether it's objecting to a Thurnees fees, indemnification provisions, and so the circuit has narrowed it extensively. Kagan Well, why wasn't that the case here? I mean, is it true that at the March 19 hearing, which was on the motion for a stay that your client announced its intent to invoke equitable mootness? And that's before the plan even took effect when there was litigation about a stay. Doesn't that suggest that the part that debtors understand this to be an invitation to use the doctrine as a sword at the early stages of confirmation proceedings? Sotomayor Toad, it was the statement of the reality. The plan is a plan of reorganization that required payments to be made in order to extract creditor consent and approval. There are obligations on their plan just like an ordinary contract. And so we were not misleading anyone with respect to what would take place. We were substantially consummating the plan, and if substantial consummation led to us fulfilling the requirements of equitable mootness, we were going to pursue that. But the instance that the judge just brought up to you seems to point out that this is not an extraordinary circumstance. It almost seemed like this was going to be part of a routine strategy. And that's our concern. This part of the plan almost. Right. Right. That stays coming up. Okay. It's an equitable mootness time. Let's bring it out. And that's problematic. And what I wanted to focus on at the moment is if you look at the development of the doctrine, I mean, it seems that as a judge made doctrine, it was one in which a jurist said, well, we have a complex reorganization, lots of parties, lots of moving parts, lots of money going back and forth. Things have are substantially on their way. Hence, this is substantial consummation. We don't want it to get mocked up. We don't want it to get messed up. And, you know, as an equitable doctrine, we should think about equitable mootness. Here are the factors. And I agree with my colleague that, you know, it seems focused on the stay. And if stay is in place, a lot of these other things fall into place. And in that case, how can it apply in this case? No offense to your client seems to be a fairly routine, not a lot of money at stake. I mean, I know it's important, everybody's client, I get that. But, you know, relatively speaking, as cases go, you know, this is not, you know, the biggest case out there. I don't see how we can start the doctrine at our balkontanental and work our way to this and in both instances. It's an appropriate application of the doctrine. And so, Judge, I would say that the doctrine is equally applicable for this reason

. Doesn't that suggest that the part that debtors understand this to be an invitation to use the doctrine as a sword at the early stages of confirmation proceedings? Sotomayor Toad, it was the statement of the reality. The plan is a plan of reorganization that required payments to be made in order to extract creditor consent and approval. There are obligations on their plan just like an ordinary contract. And so we were not misleading anyone with respect to what would take place. We were substantially consummating the plan, and if substantial consummation led to us fulfilling the requirements of equitable mootness, we were going to pursue that. But the instance that the judge just brought up to you seems to point out that this is not an extraordinary circumstance. It almost seemed like this was going to be part of a routine strategy. And that's our concern. This part of the plan almost. Right. Right. That stays coming up. Okay. It's an equitable mootness time. Let's bring it out. And that's problematic. And what I wanted to focus on at the moment is if you look at the development of the doctrine, I mean, it seems that as a judge made doctrine, it was one in which a jurist said, well, we have a complex reorganization, lots of parties, lots of moving parts, lots of money going back and forth. Things have are substantially on their way. Hence, this is substantial consummation. We don't want it to get mocked up. We don't want it to get messed up. And, you know, as an equitable doctrine, we should think about equitable mootness. Here are the factors. And I agree with my colleague that, you know, it seems focused on the stay. And if stay is in place, a lot of these other things fall into place. And in that case, how can it apply in this case? No offense to your client seems to be a fairly routine, not a lot of money at stake. I mean, I know it's important, everybody's client, I get that. But, you know, relatively speaking, as cases go, you know, this is not, you know, the biggest case out there. I don't see how we can start the doctrine at our balkontanental and work our way to this and in both instances. It's an appropriate application of the doctrine. And so, Judge, I would say that the doctrine is equally applicable for this reason. Your honor is suggesting that somehow, you know, a billion dollar investment from Carl Icon is important as opposed to. No, not Carl Icon. But my point is that the investment and the money put at risk and the harm to parties is relative. A smaller case, and we don't hide this, it is a smaller case. A smaller case and asking creditors who are smaller creditors that discourage their payments and asking administrative creditors to discourage their payments and having an investor who put in money, whether it was his first dollar, last dollar, big or small, and have that money now at jeopardy, is tied right into this doctrine. It just doesn't have the same amount of zeros. That doesn't make any less applicable in a plan of reorganization context. They make it less complex. It makes it less complex from the perspective of not having publicly issued securities and the level of complexity of complement. That is true, Judge. And it is less complex. We said in in order versus in an electronic, that the doctrine should only be applied to prevent, and the court from unscramble complex bankruptcy reorganizations where the appealing party should have acted before the plan became extremely difficult to retract. If this plan, where there is 350,000 in assets, it is a single member LLC with 20-something employees, and that is only about 1.3 million in terms of unsecured creditors. If this qualifies as complex, then haven't we made this exceptional doctrine the rule? Respectfully now. I mean, I think complexity obviously is in the eye of the beholder, and a chapter 11 plan always has a certain necessary ingredients, and the dollars do change, but I don't believe applying this doctrine to this case opens the door for the doctrine to be applied in every other chapter 11 plan situation. When would you apply it then? That is the next question after what the judge is disposed of. When would you apply it? When would you say no, no, no, you know, in the 11 context? Right. I could see it, Judge, in the situation, again, where there is a standalone reorganization, where the debtor is not bringing in outside investment, and the debtor is providing payments through notes or otherwise to creditors, and it's in exchange for not cash that would be the scores, but other type of consideration that can be given. It's not a third party coming in and funding the exercise and making payments and entering into contracts. You could have an environment where you could carve out effective relief, and the doctrine wouldn't be applicable. But to say that it only applies to a continental, how do you define a continental? Is it a hundred million, twelve million, eight million, fifteen million? What do you do with the definition that's just been read from one of our subsequent cases? And if I recall that's a PO, is that a recall? How do you drive what you've just said with what we've said in that case? I mean, we're requiring a complex reorganization. All disclaimers about my knowledge of bankruptcy law, but this does not sound like a complex reorganization. I think the ingredients of the reorganization plan here are akin to the ingredients of a reorganization plan in the cases like Nordow, like continental, with different dollars and without publicly traded securities. The concept is the same. Reliance and detriment to those rely in an environment where commitments are made and have to be recaptured. It's an attempt to avoid that harm. But particularly where is here, the creditor has raised repeatedly, taken every possible step to make clear that they think there are problems on the merits of the plan. That they intend to seek a stay, that they intend to appeal. Doesn't that impact the reasonableness of reliance under those circumstances? There are open issues. If there is a right to appeal, a confirmation order

. Your honor is suggesting that somehow, you know, a billion dollar investment from Carl Icon is important as opposed to. No, not Carl Icon. But my point is that the investment and the money put at risk and the harm to parties is relative. A smaller case, and we don't hide this, it is a smaller case. A smaller case and asking creditors who are smaller creditors that discourage their payments and asking administrative creditors to discourage their payments and having an investor who put in money, whether it was his first dollar, last dollar, big or small, and have that money now at jeopardy, is tied right into this doctrine. It just doesn't have the same amount of zeros. That doesn't make any less applicable in a plan of reorganization context. They make it less complex. It makes it less complex from the perspective of not having publicly issued securities and the level of complexity of complement. That is true, Judge. And it is less complex. We said in in order versus in an electronic, that the doctrine should only be applied to prevent, and the court from unscramble complex bankruptcy reorganizations where the appealing party should have acted before the plan became extremely difficult to retract. If this plan, where there is 350,000 in assets, it is a single member LLC with 20-something employees, and that is only about 1.3 million in terms of unsecured creditors. If this qualifies as complex, then haven't we made this exceptional doctrine the rule? Respectfully now. I mean, I think complexity obviously is in the eye of the beholder, and a chapter 11 plan always has a certain necessary ingredients, and the dollars do change, but I don't believe applying this doctrine to this case opens the door for the doctrine to be applied in every other chapter 11 plan situation. When would you apply it then? That is the next question after what the judge is disposed of. When would you apply it? When would you say no, no, no, you know, in the 11 context? Right. I could see it, Judge, in the situation, again, where there is a standalone reorganization, where the debtor is not bringing in outside investment, and the debtor is providing payments through notes or otherwise to creditors, and it's in exchange for not cash that would be the scores, but other type of consideration that can be given. It's not a third party coming in and funding the exercise and making payments and entering into contracts. You could have an environment where you could carve out effective relief, and the doctrine wouldn't be applicable. But to say that it only applies to a continental, how do you define a continental? Is it a hundred million, twelve million, eight million, fifteen million? What do you do with the definition that's just been read from one of our subsequent cases? And if I recall that's a PO, is that a recall? How do you drive what you've just said with what we've said in that case? I mean, we're requiring a complex reorganization. All disclaimers about my knowledge of bankruptcy law, but this does not sound like a complex reorganization. I think the ingredients of the reorganization plan here are akin to the ingredients of a reorganization plan in the cases like Nordow, like continental, with different dollars and without publicly traded securities. The concept is the same. Reliance and detriment to those rely in an environment where commitments are made and have to be recaptured. It's an attempt to avoid that harm. But particularly where is here, the creditor has raised repeatedly, taken every possible step to make clear that they think there are problems on the merits of the plan. That they intend to seek a stay, that they intend to appeal. Doesn't that impact the reasonableness of reliance under those circumstances? There are open issues. If there is a right to appeal, a confirmation order. Unless my recollection is wrong, Your Honor. My understanding is that there was a stay applied for in continental. I believe there was a stay applied for in Semcrood. I believe the one decision where Judge Alito concurred and didn't find that the district court abused their discretion. There wasn't a stay applied for, and he viewed that as an important factor in his concurrence. So there's nothing unique in this environment about an adversary seeking a stay and telegraphing their intention to appeal the merits of the plan. And it doesn't, it shouldn't change the applications of the, I'm sorry, the doctrine's applicability. But if it's an equitable doctrine, and the creditor has taken every opportunity to preserve its rights, how do you leave them without a remedy? You know, and a pillow remedy. Even an audience. And a pillow audience. It's exactly what was done in continental. No, I understand, but we're talking about a much broader application of what's to hear to for a minute. I rarely apply doctrine. That's my point. And Judge, the rarity of its application is in the plan of reorganization setting. The problems as I understand the circuit's decisions have been when the doctrine gets applied and tries to bring into it other extraneous non-plan related issues where effective relief can be given. If there's a plan of reorganization and there's substantial consummation and there's reliance, then the doctrine should apply based upon continental. And the other decisions of this circuit, which have narrowed it dramatically. This is not some runaway train. Every opportunity the circuit gets to address equitable mootness has done so to remind all parties that it's a rare doctrine to be only applied under exceptional circumstances. If this boils down to whether a stay was granted, and that's entirely in the discretion of the bankruptcy court. And it's not relevant whether a party has preserved their rights by seeking a stay, by getting notice of its objections and its intentions to the third party's relying. Then haven't the federal courts completely abdicated their obligation to exercise jurisdiction to the bankruptcy court that has sold this question about whether or not to grant a stay? How can that be constitutional? The initial stay application was presented to the bankruptcy court. There was a secondary stay application presented to an Article III court. The Article III judge reviewed the standards, including likelihood of success on the merits and denied the stay in the face of an argument that this could be equitably moot. And then a preliminary injunction application was brought and also denied under the standards of a preliminary injunction. Wasn't it denied on the grounds that there wasn't jurisdiction? On the interlocatory appeal? Well, I think there was a record of two. The circuit, actually, there was an application made to the circuit where I believe the circuit referenced the lack of jurisdiction, but said to the extent they had jurisdiction, they agreed with the district court's conclusion. Well, it was just missile for lack of jurisdiction. Anything beyond that would be dictum, right? It was a judge. It was a minute entry after the application was made to appeal Judge Loneres' denial of a stay

. Unless my recollection is wrong, Your Honor. My understanding is that there was a stay applied for in continental. I believe there was a stay applied for in Semcrood. I believe the one decision where Judge Alito concurred and didn't find that the district court abused their discretion. There wasn't a stay applied for, and he viewed that as an important factor in his concurrence. So there's nothing unique in this environment about an adversary seeking a stay and telegraphing their intention to appeal the merits of the plan. And it doesn't, it shouldn't change the applications of the, I'm sorry, the doctrine's applicability. But if it's an equitable doctrine, and the creditor has taken every opportunity to preserve its rights, how do you leave them without a remedy? You know, and a pillow remedy. Even an audience. And a pillow audience. It's exactly what was done in continental. No, I understand, but we're talking about a much broader application of what's to hear to for a minute. I rarely apply doctrine. That's my point. And Judge, the rarity of its application is in the plan of reorganization setting. The problems as I understand the circuit's decisions have been when the doctrine gets applied and tries to bring into it other extraneous non-plan related issues where effective relief can be given. If there's a plan of reorganization and there's substantial consummation and there's reliance, then the doctrine should apply based upon continental. And the other decisions of this circuit, which have narrowed it dramatically. This is not some runaway train. Every opportunity the circuit gets to address equitable mootness has done so to remind all parties that it's a rare doctrine to be only applied under exceptional circumstances. If this boils down to whether a stay was granted, and that's entirely in the discretion of the bankruptcy court. And it's not relevant whether a party has preserved their rights by seeking a stay, by getting notice of its objections and its intentions to the third party's relying. Then haven't the federal courts completely abdicated their obligation to exercise jurisdiction to the bankruptcy court that has sold this question about whether or not to grant a stay? How can that be constitutional? The initial stay application was presented to the bankruptcy court. There was a secondary stay application presented to an Article III court. The Article III judge reviewed the standards, including likelihood of success on the merits and denied the stay in the face of an argument that this could be equitably moot. And then a preliminary injunction application was brought and also denied under the standards of a preliminary injunction. Wasn't it denied on the grounds that there wasn't jurisdiction? On the interlocatory appeal? Well, I think there was a record of two. The circuit, actually, there was an application made to the circuit where I believe the circuit referenced the lack of jurisdiction, but said to the extent they had jurisdiction, they agreed with the district court's conclusion. Well, it was just missile for lack of jurisdiction. Anything beyond that would be dictum, right? It was a judge. It was a minute entry after the application was made to appeal Judge Loneres' denial of a stay. My recollection, it was a minute entry signed by Judge Ambrow, which said that the third circuit did not have jurisdiction to review the stay denial of Judge Loneres. So the stay application was presented twice and once in a form of a preliminary injunction, and it was denied. And the judge, Loneres, he articulated or rather accepted, as he's obligated to do, his jurisdiction. And then on the submissions, including an unrefuted declaration, dismissed based upon equitable mootness. But contrary to the argument that somehow Stern v. Marshall is some sea change on bankruptcy court jurisdiction, there are many examples where a bankruptcy court does not have its decision reviewed. I believe in the Sam Crude case, there was reference that the only known playground, and I'm sure I'm not citing it perfectly, but it was something to the effect that equitable mootness as far as this court knows, has only one playground, and that's in bankruptcy. Well, there are exempt, there's a lot of big kids in that playground. Some of them include Lehman Brothers and Ron, General Motors and Chrysler. All sales that took place and never saw Article III review. As Judge Ambrose said in Sam Crude, this doctrine is tied to 363M, 364A, and the gap left by 1127B, to provide the critical need of finality on commercial transactions. Can you address some of the other intervening cases that we have to deal with? Because the Supreme Court, just in the last few years in spring communications, for example, declined at the younger abstention in Zewat Dowski versus Clinton. I'm declined to apply the political question doctrine, and in Lexmark, disapproved the concept of potential standing and required that it be tied to some constitutional or statutory interest. The Supreme Court also makes clear in stern and in northern pipeline that the jurisdiction of the bankruptcy courts is non-article three courts is limited. At the same time, Thomas and Schor in northern pipeline has emphasized that a adjudication by those non-article three courts is only constitutional because it's subject to review on appeal. So when we look at the evolution of the Supreme Court's cases in the mandate to exercise jurisdiction, including of appeals over non-article three courts, like in Raditz, for that magistrates act, for example, and our own experience with the doctrine and trying to maintain a narrow doctrine over these 18 years, which has not been successful about half of the time. With cases that have come to us, why, why, shouldn't we reconsider the doctrine itself? Judge, with respect to Stern v. Marshall first, Stern v. Marshall is tied back into the 1982 decision of northern pipeline, which addressed the bankruptcy courts limited jurisdiction, and specifically in Stern v. Marshall, addressed the bankruptcy courts inability to address a state cause of action asserted an account or claim. There is nothing in Stern v. Marshall that changes the bankruptcy courts jurisdiction except as to that particular core proceeding, which it found could not be determined without issuing proposed findings of facts and conclusions of law. Every time this circuit cites Colorado River and Quackenbush in these equitable mootness doctrines, those decisions were known available, abstention decisions were known available, and addressed. I mean, as late as approximately one year ago, in Semcro, this court cited to Quackenbush again, which started, Quackenbush came shortly after Continental, which of course cites to Colorado River, and held that the doctrine was viable. The doctrine should not be revisited in the face of this court's precedent, and in the face of unanimous approval in every other circuit. It fulfills a vital importance in the context of administering bankruptcy cases, just as 363M does. There was nothing in Stern v. Marshall or any Supreme Court case that guts 363M, 364A, which denies Article III review of the largest commercial transactions in the world. In the world. But you agree the statute provides for confirmation plans being subject to review by Article III courts? I do, and I think that this Court said it well when it referred to 1127B and the need on a very limited basis, very limited basis, to fill that gap. But the argument that somehow every Article I decision must be reviewed by an Article III court raises concerns as to whether there are many other unconstitutional provisions within the bankruptcy code

. My recollection, it was a minute entry signed by Judge Ambrow, which said that the third circuit did not have jurisdiction to review the stay denial of Judge Loneres. So the stay application was presented twice and once in a form of a preliminary injunction, and it was denied. And the judge, Loneres, he articulated or rather accepted, as he's obligated to do, his jurisdiction. And then on the submissions, including an unrefuted declaration, dismissed based upon equitable mootness. But contrary to the argument that somehow Stern v. Marshall is some sea change on bankruptcy court jurisdiction, there are many examples where a bankruptcy court does not have its decision reviewed. I believe in the Sam Crude case, there was reference that the only known playground, and I'm sure I'm not citing it perfectly, but it was something to the effect that equitable mootness as far as this court knows, has only one playground, and that's in bankruptcy. Well, there are exempt, there's a lot of big kids in that playground. Some of them include Lehman Brothers and Ron, General Motors and Chrysler. All sales that took place and never saw Article III review. As Judge Ambrose said in Sam Crude, this doctrine is tied to 363M, 364A, and the gap left by 1127B, to provide the critical need of finality on commercial transactions. Can you address some of the other intervening cases that we have to deal with? Because the Supreme Court, just in the last few years in spring communications, for example, declined at the younger abstention in Zewat Dowski versus Clinton. I'm declined to apply the political question doctrine, and in Lexmark, disapproved the concept of potential standing and required that it be tied to some constitutional or statutory interest. The Supreme Court also makes clear in stern and in northern pipeline that the jurisdiction of the bankruptcy courts is non-article three courts is limited. At the same time, Thomas and Schor in northern pipeline has emphasized that a adjudication by those non-article three courts is only constitutional because it's subject to review on appeal. So when we look at the evolution of the Supreme Court's cases in the mandate to exercise jurisdiction, including of appeals over non-article three courts, like in Raditz, for that magistrates act, for example, and our own experience with the doctrine and trying to maintain a narrow doctrine over these 18 years, which has not been successful about half of the time. With cases that have come to us, why, why, shouldn't we reconsider the doctrine itself? Judge, with respect to Stern v. Marshall first, Stern v. Marshall is tied back into the 1982 decision of northern pipeline, which addressed the bankruptcy courts limited jurisdiction, and specifically in Stern v. Marshall, addressed the bankruptcy courts inability to address a state cause of action asserted an account or claim. There is nothing in Stern v. Marshall that changes the bankruptcy courts jurisdiction except as to that particular core proceeding, which it found could not be determined without issuing proposed findings of facts and conclusions of law. Every time this circuit cites Colorado River and Quackenbush in these equitable mootness doctrines, those decisions were known available, abstention decisions were known available, and addressed. I mean, as late as approximately one year ago, in Semcro, this court cited to Quackenbush again, which started, Quackenbush came shortly after Continental, which of course cites to Colorado River, and held that the doctrine was viable. The doctrine should not be revisited in the face of this court's precedent, and in the face of unanimous approval in every other circuit. It fulfills a vital importance in the context of administering bankruptcy cases, just as 363M does. There was nothing in Stern v. Marshall or any Supreme Court case that guts 363M, 364A, which denies Article III review of the largest commercial transactions in the world. In the world. But you agree the statute provides for confirmation plans being subject to review by Article III courts? I do, and I think that this Court said it well when it referred to 1127B and the need on a very limited basis, very limited basis, to fill that gap. But the argument that somehow every Article I decision must be reviewed by an Article III court raises concerns as to whether there are many other unconstitutional provisions within the bankruptcy code. There's a requirement when you file an appeal under 8,000, too, that you do so within 14 days. If you missed that 14-day deadline, the Stern v. Marshall give you the opportunity to come to an Article III court and say it's unconstitutional to deprive me of my opportunity to review the merits of an Article I court. It says that. So that's a different case because there he just said that Congress, in drafting that language defined jurisdiction, and they clearly have that of 30. That's different from how we would be 363. The fact that a 14-day period is required for taking the appeal. If that's a jurisdictional limit, then that's when the Congress is determined and they can do that. I'm not here nor would I be successful in doing it to an any way, shape, or form convinced this Court that the equitable movement doctrine should be expanded. The point is that when you review the district court's decision, a detailed decision based upon a declaration that was not refuted, that I respectfully suggest you can't conclude that Judge Lennaris abused his discretion in following this Court's precedent and the facts that were before. Thank you, Mr. President. Sorry, one question. Is there any case where a court has addressed the constitutionality of the doctrine on the merits? I believe that the only reference that I've seen of late was I believe in the Semcroot case that was referenced to the UNR decision out of the seventh Circuit and the conclusion that it was supported by Federal Common Law and, again, not to be repetitive, filling in the blanks on 363, M and 364E. But I respectfully suggest Judge Kraus that then Judge Alito put into play, I know Chief Judge McKee was in the dissent, the constitutionality of the doctrine, when it was visited by the Circuit in 1996, and that dissent has been cited, I believe in almost every equitable witness case over the last 18 years. Thank you very much for your time. Thank you. Is there a resource in here, anything? Is there a resource in here? Yes, I have. I believe he's there for some time. He didn't let's say that. No, I'll answer it. Thank you. Judge, you should be seen in that heard. Just a couple quick points. I won't take that personally. No, no, no. No, I should know best of the day. Judge Brinawey, you talked about the fact that there's only seven reported decisions in the Circuit and it seems like it's really a plot. I don't, unfortunately, on the statistics, but I would submit to you that this doctrine is applied quite often in the district courts and you probably don't see it in the plain vanilla cases such as this because creditors can't afford to appeal. It doesn't make sense to appeal. There's a lot of various factors that go into whether a party takes an appeal to the public or the public

. There's a requirement when you file an appeal under 8,000, too, that you do so within 14 days. If you missed that 14-day deadline, the Stern v. Marshall give you the opportunity to come to an Article III court and say it's unconstitutional to deprive me of my opportunity to review the merits of an Article I court. It says that. So that's a different case because there he just said that Congress, in drafting that language defined jurisdiction, and they clearly have that of 30. That's different from how we would be 363. The fact that a 14-day period is required for taking the appeal. If that's a jurisdictional limit, then that's when the Congress is determined and they can do that. I'm not here nor would I be successful in doing it to an any way, shape, or form convinced this Court that the equitable movement doctrine should be expanded. The point is that when you review the district court's decision, a detailed decision based upon a declaration that was not refuted, that I respectfully suggest you can't conclude that Judge Lennaris abused his discretion in following this Court's precedent and the facts that were before. Thank you, Mr. President. Sorry, one question. Is there any case where a court has addressed the constitutionality of the doctrine on the merits? I believe that the only reference that I've seen of late was I believe in the Semcroot case that was referenced to the UNR decision out of the seventh Circuit and the conclusion that it was supported by Federal Common Law and, again, not to be repetitive, filling in the blanks on 363, M and 364E. But I respectfully suggest Judge Kraus that then Judge Alito put into play, I know Chief Judge McKee was in the dissent, the constitutionality of the doctrine, when it was visited by the Circuit in 1996, and that dissent has been cited, I believe in almost every equitable witness case over the last 18 years. Thank you very much for your time. Thank you. Is there a resource in here, anything? Is there a resource in here? Yes, I have. I believe he's there for some time. He didn't let's say that. No, I'll answer it. Thank you. Judge, you should be seen in that heard. Just a couple quick points. I won't take that personally. No, no, no. No, I should know best of the day. Judge Brinawey, you talked about the fact that there's only seven reported decisions in the Circuit and it seems like it's really a plot. I don't, unfortunately, on the statistics, but I would submit to you that this doctrine is applied quite often in the district courts and you probably don't see it in the plain vanilla cases such as this because creditors can't afford to appeal. It doesn't make sense to appeal. There's a lot of various factors that go into whether a party takes an appeal to the public or the public. And in small cases, usually the committee spearheads the objections, if any, to a plan. Individual creditors do not get actively involved most of the time. I'm just talking general from my experience because of the costs and things like that. The committee is supposed to represent their interest. I happen to have a client who had a very substantial claim who is a public company. So they do have the resources to pursue an appeal to the Third Circuit. But I just want to make it clear that I don't think that just because this court has not seen dismissals of plain vanilla cases on the basis of equitable mootness, that that is not going on all over this district and every other district. In fact, Judge Lennaris has dismissed other cases in the past based upon equitable mootness and that have not come up to this level on appeal. So I don't think this is rare. I think this is becoming the rule. As far as comments about reliance and third parties. Do you believe it's been misapplied then? Excuse me? I suppose that you believe it's been misapplied. I think it's not applied the way it was meant to be applied. It's a narrow exception and very extreme circumstances where you have a Lehman brothers or reorganizations that are so complicated and so complex and involved in lines by truly third parties. We're not talking about a plan sponsor that comes in and invests. That's not a third party. This plan sponsor waived the condition precedent to finality. They assume the rest. We're talking about third parties when you put stock on the stock exchange and a person goes out and buy that stock. They don't know the whole dealings of the bankruptcy and it's on appeal and such. But people coming into a company for instance, the ordinary course. They enter into a contract with a customer. Their customers have been watching the bankruptcy throughout. They know what's going on. They're not outside third parties who have no idea what's going on. I mean some of them in this case unfortunately most of the their customers they didn't give notice on the bankruptcy. They assumed they had executory contracts right through the bankruptcy case and didn't give any notice to the parties. Who parties to exact your generic contracts and didn't schedule them. That was another issue significant that we raised on appeal. What about the Lehman brothers contracts? Why wouldn't why he shouldn't equitable witness via viable doctrine in that context? How else would you manage such a situation? In the context of Lehman brothers. It needs to be a solution to that problem in that context

. And in small cases, usually the committee spearheads the objections, if any, to a plan. Individual creditors do not get actively involved most of the time. I'm just talking general from my experience because of the costs and things like that. The committee is supposed to represent their interest. I happen to have a client who had a very substantial claim who is a public company. So they do have the resources to pursue an appeal to the Third Circuit. But I just want to make it clear that I don't think that just because this court has not seen dismissals of plain vanilla cases on the basis of equitable mootness, that that is not going on all over this district and every other district. In fact, Judge Lennaris has dismissed other cases in the past based upon equitable mootness and that have not come up to this level on appeal. So I don't think this is rare. I think this is becoming the rule. As far as comments about reliance and third parties. Do you believe it's been misapplied then? Excuse me? I suppose that you believe it's been misapplied. I think it's not applied the way it was meant to be applied. It's a narrow exception and very extreme circumstances where you have a Lehman brothers or reorganizations that are so complicated and so complex and involved in lines by truly third parties. We're not talking about a plan sponsor that comes in and invests. That's not a third party. This plan sponsor waived the condition precedent to finality. They assume the rest. We're talking about third parties when you put stock on the stock exchange and a person goes out and buy that stock. They don't know the whole dealings of the bankruptcy and it's on appeal and such. But people coming into a company for instance, the ordinary course. They enter into a contract with a customer. Their customers have been watching the bankruptcy throughout. They know what's going on. They're not outside third parties who have no idea what's going on. I mean some of them in this case unfortunately most of the their customers they didn't give notice on the bankruptcy. They assumed they had executory contracts right through the bankruptcy case and didn't give any notice to the parties. Who parties to exact your generic contracts and didn't schedule them. That was another issue significant that we raised on appeal. What about the Lehman brothers contracts? Why wouldn't why he shouldn't equitable witness via viable doctrine in that context? How else would you manage such a situation? In the context of Lehman brothers. It needs to be a solution to that problem in that context. My position before was that there's other ways to address it. If you are going to address its weapon will witness then I think the test has to be refined. There has to be some more black and white lines that the courts can apply. And the most significant problem with the test as it stands right now. It says if you are going to court and you have not come to court, not on the state. Even if you have sought to stay if you have been denied a stay and you are seeking to overturn the confirmation order, the case is equably new. That's one of the biggest problems. You can't challenge a confirmation order. And that's my client's right. My client's right to appeal the confirmation order that the plan was not confirmed. It didn't comply with the code. There's requirements of the bank. We got to there. That was right. There's ways to refine the test to make it only apply. And I know the court has been doing that as the court mentioned throughout these cases. It's been tailoring the test. But the district courts are not getting the message. Is there any problem with reverting to the way a court's power and equity has traditionally been used? That is, it's not the decline to consider the merits of a case, but in fashioning a remedy. I mean, basically what Ben Judge Alito suggested in his dissent was the appropriate way to consider the issue of the complexity and the difficulty with unraveling a third party of your alliance. Why isn't that just something professioning or remedy after consideration of the merits? That's a good point. And I agree with Justice Aliyah. If you hear the appeal on the merits and you determine the appeal on the merits and then you look and you fashion the remedy, that's much more appropriate than just missing an outright. And in fact, when you review the merits, you all certain, you'll have a sense of how egregious the confirmation order was. Did it not comply in a small respect with the bankruptcy code? Were there huge legal errors or small legal insignificant ones, not relevant? I think that Justice Aliyah, Alito's approach that he articulated in continental was the right approach. And in one more vote, you were the one who won. And I know you were on his side, unfortunately, that... I'm a Brown's fan, I'm not used to losing. But it did make sense

. My position before was that there's other ways to address it. If you are going to address its weapon will witness then I think the test has to be refined. There has to be some more black and white lines that the courts can apply. And the most significant problem with the test as it stands right now. It says if you are going to court and you have not come to court, not on the state. Even if you have sought to stay if you have been denied a stay and you are seeking to overturn the confirmation order, the case is equably new. That's one of the biggest problems. You can't challenge a confirmation order. And that's my client's right. My client's right to appeal the confirmation order that the plan was not confirmed. It didn't comply with the code. There's requirements of the bank. We got to there. That was right. There's ways to refine the test to make it only apply. And I know the court has been doing that as the court mentioned throughout these cases. It's been tailoring the test. But the district courts are not getting the message. Is there any problem with reverting to the way a court's power and equity has traditionally been used? That is, it's not the decline to consider the merits of a case, but in fashioning a remedy. I mean, basically what Ben Judge Alito suggested in his dissent was the appropriate way to consider the issue of the complexity and the difficulty with unraveling a third party of your alliance. Why isn't that just something professioning or remedy after consideration of the merits? That's a good point. And I agree with Justice Aliyah. If you hear the appeal on the merits and you determine the appeal on the merits and then you look and you fashion the remedy, that's much more appropriate than just missing an outright. And in fact, when you review the merits, you all certain, you'll have a sense of how egregious the confirmation order was. Did it not comply in a small respect with the bankruptcy code? Were there huge legal errors or small legal insignificant ones, not relevant? I think that Justice Aliyah, Alito's approach that he articulated in continental was the right approach. And in one more vote, you were the one who won. And I know you were on his side, unfortunately, that... I'm a Brown's fan, I'm not used to losing. But it did make sense. And I think the only counter argument to that is that is it was the used to digital resources to decide the entire merits of the appeal only then only give a very limited remedy. And so I think the risk in that is to make sure that if courts do consider all the merits of the appeal, that... And they're going to limit the remedy that they try to give as broad of remedy as possible. Are you aware of any cases I asked your adversary where a court has addressed the constitutional challenge to equitable moodness on the merits? Because it appears that in terms of raising and then preserving the argument that you and your client are the rare exception. Well, all the circuits have the equitable moodness, Dr. And every recently, all the briefs that have gone up on appeal, the circuits that we've seen, there's a lot of briefs and a lot of people have challenged the constitutionally. I don't know of any circuit that has decided it yet, but it has been raised and raised. I think we listed some in our briefs below. There has been... this issue has been raised repeatedly now, particularly in life's turn. There has been many parties who have already been understood as this is a non-constitutional, there's no statutory authority. So it's just a matter of time before one of the circuits does decide. It's the question of which circuit has come to decide it first. But I'm not aware of any... this isn't where the court has decided it in any circuit yet. Thank you very much. I'm going to turn another brief break and then we'll ask you. Thank you. you

Good morning. May I please the Court, Court in the Shell, from Ashford Shell, on behalf of the Pellan Quad Graphics Inc. I respectfully request reservations, three minutes for your question. The Equivalent Mootness Doctrine is a judge-made document that is supposed to be a very limited and narrow exception to the Court's virtually unflagging obligation to exercise your jurisdiction. Well, Mrs. Edmund, I'm with you. I gave a den-judge leader, but the problem is that seven of our ten colleagues disagreed with our position. So what do we do given the fact that we've got in-rate continental sitting out there? Well, there's a number of things the Court can do. First of all, in continental, when this Court adopted the doctrine in a very narrow on bank decision, the Court never considered whether or not it was consistent with or authorized under the statutory jurisdictional provisions governing the Bank of Secure, specifically sections 28 USC 157 and 28 USC 158. Those provisions require that any bankruptcy court final order that's entered be subject to a peltier's jurisdiction. It's true. It wasn't challenged on that basis, but continental airlines itself talked about it involving the discretionary balancing of equitable and credential factors, rather than the limits of federal courts authority under Article 3, which indicates that the majority had given at least some thought to it, even though it wasn't raised and argued in those terms. So how short of unbunk reconsideration can we take issue with the viability of the doctrine in the circuit? Well, there's another number of options. First of all, to the extent that the Court did determine that it wanted to use the verve over roll and over roll continental, it could so respond to order of re-hearing on bank in this case to consider that. But sort of overruling, expressly overruling continental, the Court can limit, modify, clarify, and do all sorts of things sort of over rolling it. No, you say all sorts of things. I'm visualizing 11th College. We mean that, share your view of the prevalence of an unbunk decision. Well, for example, one of the legal issues that the Third Circuit has not cited is, does Section 28, USC 157 and 158, and also Article 3 of the Constitution require that a bankruptcy court's decision on a confirmation order be subject to appeal? So when you make that argument, I understand obviously you're raising a constitutional argument as to Article 3 jurisdiction. In making the argument as you do here and in your briefs on the statute, are you arguing that there's a statutory mandate for jurisdiction? Or is that sort of a permutation of your constitutional argument that it's a violation of separation of powers for the Court to use this judicially created doctrine given the language of the statute? There's two distinct issues here, and I think they were illustrated well in Sternby Marshall. There's the statutory authority of the bankruptcy court to make decisions in act, and then there's the constitutional restrictions of order to be great. Under the statute, Congress has decided the bankruptcy court can't enter final orders and judgments on in confirmation proceedings, subject to review by the District Court. So the authority vested in the bankruptcy court by Congress is limited by that review provision. If you take away the review, you take away the bankruptcy court's authority because it is conditioned upon that. So the Congress has determined that the authority that they've given to the bankruptcy court and keep in mind that this is a very fragile jurisdictional brand that they've done is subject to that. That's statutory constraints. Then you have the constitutional constraints. In Stern, the court actually found that although the statute allowed the bankruptcy court to make decisions in Stern type cases, the Article III constitutional provisions did not allow. So there are two separate issues. The constitutional issue is that the court is ever reviewed by an Article III court. You're talking about substantial rights here. My client had this single largest claim in this case of $10 million. That claim was wiped out in confirmation. We raised substantial objections to confirmation. We have the right to have that reviewed the bankruptcy court's determinations by the District Court. Otherwise, as does the Toledo warrant, it essentially becomes a per se rule. If you don't have a stay pending appeal, the way the test works is you can't seek to overturn the whole confirmation order. You can partial out pieces of it, but you really will never get Article III review of the entire order. Because that's not the way the test works. Can you address, you mentioned Stern, obviously, but you also made reference to the virtually unflagging obligation of the Court's exercise jurisdiction. Besides Stern, what, if any, intervening developments or cases do you have in mind, either from the Supreme Court or perhaps our own circuit's experience, having to have in this doctrine to exceptional circumstances that would warrant reconsideration on mock? Well, it's not only to the Supreme Court issue decisions thermally, marshly, recently issued another decision at the executive benefits. And I think what's important about that decision, and this Court has said in Mara versus Bellisky, 719F-3168, 2013, that this Court must look at Dicta by the Supreme Court. That the Supreme Court does not have the capacity to review every decision that comes before it. So they pick and choose cases, and this Court recognized it's important to look at the cases that the Supreme Court hears, and read between the lines and look at Dicta and see where the Court is going in order to facilitate the resolution of things like this. And I think what's important about the executive benefits insurance agency decision is two things. First of all, it talks about the argument of a gap in the code. In that case, the Court's found that when you have this Stern issue, because it doesn't fit within the Court proceedings anymore, you can't adjudicate it or that. And it's not specifically a non-Core. They said there's a gap in the code. The Supreme Court rejected that and said there's no gap here. There's a saving clause in the statute, and to the extent that it doesn't fit in the Court proceedings anymore, because we've deemed it can't, you adjudicated under the non-Core proceedings. And I think that's telling, because the Equital Moons document is based upon a so-called gap that the courts have perceived in the bankruptcy code. There's Section 363 and 364, both of which are Congressional in that statutory moon-ness provisions. If you don't get a state pending appeal under 363 or under 364, your appeal rights are extinguished. That was created by Congress. Congress chose to do that. Court's looking at confirmation and not seeing a similar provision, proceed that as a gap. There is no gap. The legislation chose which provisions to require a stay in which not to. The statute's clear. Where Congress chooses not to speak on something, the implication is, and they have spoken on it in other contexts, the implication is that they did it purposefully. So there is no gap. I don't think the Supreme Court was indicating that in the executive benefits. If you're going to go on a gap in the statute, it better be pretty clear, because here I don't see a gap. And I don't think the Supreme Court would see a gap as it didn't in the executive benefits. They also said in the executive benefits. They furred that decision because essentially at the end of the day, the party got what they wanted, which was reviewed by an Article III Court. So the courts had effectively looked. You might have not gotten it procedurally the way you wanted, but you did get Article III review. And that's what the Court emphasized. Emphasized that the statute, 157 and 158, required review by an Article III Court. And I think the Supreme Court was essentially tipping their hands and saying, look, this is what the statute says. And we're following the statute. The statute requires Article III review. When it comes and to what extent might vary whether it's a stern case or a non-stern case, and in a stern case, there's full denover review of both the fashion findings and the legal conclusions, versus a non-stern case of court proceeding. It's denover review of the legal issues and clearly erroneous on the facial issues. Stern, obviously, is an equitable mootness case. Is there any case you can point us to that holds that Article III review is required the confirmation plan? I can't point to a case, but the statute clearly says that it is. Let me say clearly. You can read the statute that way, or much of the statute says it's so clearly that it would necessarily negate the possibility of equitable mootness working. Well, the statute says specifically says that a bankruptcy court can enter final orders, and I don't have the language right here in front of me, subject to the Section 28, U.S.C. 158. How do you answer, and Section 1, I'm sorry, Section 28, U.S.C. 158, provides for a Pellet review. So the statute is playing on its face. I don't think there's any case that says the statute doesn't plainly say that. How do you then answer, Mr. Srotas' point that the statute also in 1334 C.1 provides that a district court can abstain from particular proceedings, quote, in the interest of justice? What does that cover? Absolutely. The court has specific extension provisions, and they talk about exactly what kind of proceedings the court can abstain. And there is a catch-all phrase in the interest of justice, but to argue that denying the right to appeal a confirmation order per se, if there's no stay, is in the interest of justice. I don't know what interest that is. I mean, finality certainly has been the articulated interest that the court is trying to pronounce, and finality certainly I have represented debtors in the past trying to deal with that issue. It is an issue, and I'm not saying that finality is not an issue. I'm just saying who is the proper body to deal with it? Is it the courts? Is it Congress? Is it the parties themselves to try and arrange for some negotiate, some interim provisional remedies pending an appeal? Who is the proper body to address that issue and how to address it? Is the matter of quacking which broad enough to encompass those situations where a court is allowed to abstain? Is that broad enough to encompass this doctrine? That's not why not. A fact in Bush abstention. The most abstention doctrines are based upon the idea of sovereign sovereign dissauverings and the fact that there's another form. And it's an exercise of jurisdiction in usually in the original sense, in the sense that the court abstains and decides they're not going to hear the case at all. And then it's better heard in the state court or it's better heard somewhere else, even in bankruptcy. Most of the abstention provisions that are codified deal with the fact that there's either state court issues that predominate and the court case should be either remanded if it's been removed to bankruptcy court or that there's a better form to adjudicate those issues. We're not talking about that type of abstention here. We're talking about the federal courts have exercised jurisdiction over the case. They've rolled on the merits, they've entered a decision. This is the appeal for that. This language in Quackenbridge, that's what I was referring to, where it talks about the long-for abstention in situations and they do talk about the federal state and comedy. Doesn't they also say, for example, abstention is warranted for comedy or a rise judicial administration? If we have a situation with a plan, the sponsor may walk away and it's a kind of a catch for you to admit. But if there's a determination that there's a substantial risk that plans possible, walk away and that the bankruptcy's confirmation will be endone, why wouldn't equitable, the echo rogher in here fit within the language of abstaining for the purposes of a rise judicial administration? Because it's not a rise judicial administration to deny the fundamental right of a party to appeal. This is a case where the bankruptcy court made numerous, numerous, factual and legal errors. And initially didn't even confirm the plan made the parties come back and make the modifications to fit it in, try and fit it into the code. There were so many violations of the code here. Certainly she was not going to grant us a state pending appeal and say that she was wrong on the merits. I never required that. And then we go to the district court and the district court and we're on considering our state application. Pickton chose the issues that he actually addressed and he really didn't address most of the legal errors that we argued and denied the stay. And then we next move on as is most cases to the equitable moodness and by then it's too late. By then the court says, well, if you want to overturn the plan, you can't. How is that ever a judicial efficiency at the risk of a pellets right to appeal those decisions? Essentially let's the bankruptcy court be able to confirm a plan over the strung with objections of parties and then just have it get rubber stamped through the system. And most plans now contain the condition precedent to the effectiveness of the plan. One of those standard boilerplate conditions is that the order be final. I see my time is up. Believe me, it's not up. Let's go ahead to be. One of the conditions precedents is standard and most plans I've seen lately is that the confirmation order be a final order. Meaning no more appeals, time is lapsen, no appeals pending. That condition precedent is waived by the people who are in control. The debt or the plan sponsor, the committee, whoever is controlling the negotiation of the plan. They have the option to waive that. If they waive it, they waive it at their peril. That should not be harm, my client should not be harmed because the plan sponsor in this case chose to waive that condition and proceed at its peril. How is it equitable to then turn around and deny my client the appeal right because the plan sponsor chose to proceed? I'd like to talk about the application of the doctrine and the errors from your standpoint that the district court made. It seems that your argument is there's such a stark contrast between cases where the doctrine is normally applicable and in this case. Does our inquiry end as simply as if we find that this wasn't a complex reorganization then it doesn't apply or is the argument more focused on look. None of the five factors really militate in their paper and this was just wrong on every level. Well, the first part of the question should you stop at that this was not a complex case. The court has indicated that the narrow exception should only apply in complex cases. We argue that this was actually a requirement that the court imposes that it has said this is only applies in complex cases with intricate plans that need to be unraveled. Which of the five factors does that get into? It's stated in the opinions as a non-state as one of the factors. In the test, that's what the district court ruled. The district court said it's not one of the factors so I'm not going to consider it. I think it does factor into the consideration of whether or not you can reverse undo the plan. But the reality is when you look at the factors, the factor that parties always get hung up on including my client is are you seeking to unravel the plan? Are you seeking to undo the entire confirmation? And in fact, my client is. And is in fact, they're right. We also have a separate request for relief which is to strike certain releases because the court has been inclined in the past to parse through confirmation and take out pieces that won't affect the entire plan. But that's really the problem when you go through the factors and you look at reliance by third parties. In this case, there's no reliance by third parties on the actual plan. There were ordinary course transactions entered into after a consummation, after they claim consummation such as hiring people and things like that. But that's just ordinary business transactions. That's not like issuing stock under a plan and selling it on the stock exchange and third parties coming and buying stock issued under a plan. They really could not point to third parties that had relied on this plan. Is it your position that there is some different plan of reorganization that might be forged or is it that the solution here this should be converted to chapter 7 bankruptcy? We had two issues. One was we thought that the liquidation value was greater than what our client was going to receive under the plan for two reasons. One, because we thought the assets were undervalued. Two, there were significant releases, releasing third parties insiders that we thought had value. We put on expert testimony about the value of the bankruptcy court rejected our evaluation. We thought that those had value and we thought that if the case was liquidated and those actions were pursued, the creditors would get more. And keep in mind, my client is about 90% of the pot of creditors. If we're talking about chapter 7, then would it be necessary to retract the distributions that have been made? Yes and no. No to the extent that some of the distributions remain on admin claims, administrative claims that it has to pay to anyway. The amount of distributions that have actually been made to unsecure creditors, again, my client is 90% of approximately 90% of the pool. So the amount is not significant, dollar wise. And most of the people who have received distributions of them, my client still do business with the debtor. So they could easily just set it off against the amounts, too. But it's not a significant amount. There were not a lot of creditors in this case and not a lot of creditors owed a lot of money. So this is really about the releases to the seeming third parties who you're claiming are insiders who basically, from your client standpoint, got away with murder. They essentially got releases and in fact, when field aired, when she appell the releases, she did not consider all the factors required to approve them. Specifically, she did not consider whether there was consideration for those releases. And in fact, there were not. There was some claimed release that one of the parties was releasing certain claims against the estate. But those claims were, in our opinion, not inflated. We didn't object to them because there was no really no purpose since they were being released. But there really was no consideration. In fact, Judge Woodenfield never ever found that there was consideration for the releases, which is one of the legal errors that we alleged below. That's requirement. So in addition to liquidation, we also had an issue with the sale. We would have fully supported a sale that we thought was marketed that complied with LaSalle and the absolute priority role. But in this case, it was, it was a sale to somebody they found there was another offer that they claim they never saw and writing to counsel for the debt or that claim that they never saw it. But there was no, there was no 363 sale. There was no auction. There was no advertising. There was not sufficient marketing to maximize the value of the state. It was it was a plan proposed by the debtor during exclusivity. The exclusivity was never opened up and this was a fire, a hand pick by the debtor originally they had proposed a plan where the principles wife, I shouldn't say the principle, the president of the company CEO's wife, who was a member of the company that was the holder of the company. I was going to buy back her interest for a hundred thousand dollars. The court did not come from that plan because she found that it did not comply with the outside priority role because new value was insufficient. So instead they went out and found another purchaser who paid $200,000. But given that it's a third party and that it's, it's, it's, it's a fair state, an arms length transaction. What is the basis for your absolute priority will claim at this point? Because prior to even bringing in that new purchaser, the debtor had drafted and proposed a new plan and under the new plan essentially laid out the price. It says $200,000. It laid out all the terms including lucrative employment contracts for the firm as is heavily. And that was before they even had the plan sponsor. Then they identified a plan sponsor, brother plan sponsor, who basically complied with the terms that Mr. Heverley imposed upon them. The only change was instead of Mrs. Heverley being paid $300,000 a year as president of the company working from her marital home, they allocated the salary between Mr. Heverley and Mrs. Heverley. But essentially our argument with absolute with the absolute priority role was they're retaining property under this plan on accounting their equity interests. They dictated what the terms of the sale would be even long before they even brought in the plan sponsor. They were the ones who established the terms. They were the ones who controlled the process. And they were the ones who reap substantial benefits under this because of their equity interests. And even though they didn't retain equity, that's not what the absolute priority role said. It says you can't retain any property under the plan unless unsecured predators are paid and fall. So there's came back to the heart of the equitable problems here for this problem. And you, representing your client, have been meticulous in taking every step that in every eye crossing every teeth, protecting your clients, rights asking for a stay, killing the denial of the stay. What would happen in this case if your client had been represented by a lawyer where the confirmation plan had been approved and there's been no attempt whatsoever to hold off to have the article to be take a look at that. And then the same situation occurs and the discord takes a look at it and says, well, you know, it's been whatever it is two or three years. And if I unscrew this, if I put the toothpaste back into the tube, the plan sponsor is going to walk away. The person who's challenging this really did not protect their rights. I'm going to simply abstain and let the confirmation plan go into place. What would be wrong with it? It's kind of like a latch is different. So what would be wrong with that? I think what you're saying is there's nothing wrong with it. I think it's consistent with the reason behind the doctrine. The purpose number is the same jurisdictional issue. Because, well, the jurisdictional issue aside from that, you were talking about, I apologize. I thought you meant on the equitable, mood-space. The purpose of the doctrine, and I'm quoting from Nordov, was to prevent a court from unscramble complex bankruptcy reorganizations when the appeal inquiry should have acted before the plan became extremely difficult to retract. Right. But if it's a jurisdictional issue, that last factor should be irrelevant. That's why I boarded my hypothetical away. I didn't, if we either have jurisdiction or not, we have an article of the equity that has jurisdiction, but doesn't have jurisdiction. If the jurisdiction turns on what is ten month to a latch is defense, how vestidious the objection party has been in trying to build in a state of the status quo, if you will, until an article of the court can look at it. That's what it turns on. That does not arise out of the language of any of the bankruptcy code, who of the article three, and trying to figure out in terms of the equitable moodness, how you rationalize that distinction. Does that make sense? That question? I understand what you're saying, Your Honor. And I think that... Is there anything in terms of the procedure, any deadlines that are imposed by statute that in terms of a right to appeal that might be relevant? Perhaps you can address that too when your answer? I think that there's two issues. If the court is going to continue to... If the equitable mood is documents going to continue to survive, I think it should be put back to its original purpose, which was to recognize the inequity of a party sitting on its rights, failing to seek a stay while the debtor goes out and consummates a plan, and then wanting to look for an option. I'm waiting there, but that's to me the limitation. Where does that limitation come from? That comes from the courts. It was a judge made doctrine, and that's how it was originally formulated. What happened was, as parties realized that they had to seek a stay or be subject to it, they started to seek a stay, as my client did. Once you seek a stay, I don't think the equitable mood is doctrine should even come into play. But if it's a judge made doctrine that you're conceding is valid in some circumstances and not others, I'm trying to tie that to some analysis, some analytical framework, where it would be consistent. I don't think it's statutorily or constitutionally permitted even in that context. Okay, that's what I'm trying to get. I don't think it has a valid basis under the statute, under the Constitution, under any basis. But if I'm looking at the worst case scenario that the court's equitable mood is as here to stay, I think it needs to be set back to what it really was, which was a narrow exception. How would we do that? I would eliminate two parties who failed to seek a stay. But how do we get out of it? Because that's the equitable consideration that started all along. If the equity says, if you sit on your rights and don't seek a stay, well that should factor in whether or not you should be able to go forward on this appeal. Okay, but again, what did that doesn't come out of 15 to 17? What does that come from? How do we, I'm trying to get out the guts of the origin of this thing? In one situation, the hypothetical I put you, it makes perfect sense. In your situation, I mean, that seems to me exactly what Judge of Edo was talking about in the dissent in Maccontinental, it doesn't make an awful lot of sense. It is a catch-22, in the five or six point analysis that you looked to, it really all boils down to what's a stay imposed. Because it wants to stay as imposed, then all the other factors fall in the line. It's a five-per-chest that boils down to one factor. And that's one of the reasons I'm troubled by it. But in trying to look at this thing doctrinarily, in a situation where equity does not work in favor of the personal subject, that seems to me the same analysis and approach should apply. And I'm having trouble trying to find out how I would do that because the jurisdiction, again, see there, it isn't there. And the last year, maybe this is the answer. If latches is the decision, latches is the basis for saying we're not going to undo this plan. And the district court, the third circuit court says that it's exercising jurisdiction. It's not abstaining. It's simply exercising jurisdiction and dismissing the appeal based upon the doctrine of latches, which is different from saying we're not going to understand this confirmation and we're going to abstain. It's a result of the same, but in one sense, it is an exercise of jurisdiction. You're just willing upon latches. And it does make sense because if a party sits on their rights and doesn't think it's a day that they have the right to do, then that's an equitable consideration. But in a case like this, where we did everything we could, we even sought and jumped to relieve after we were denied a stay arguing that the court should enjoy certain acts that might actively move the appeal. So how is that different in principle than the equitable mootness doctrine as it was described in continental because the court said explicitly that it was viewing the doctrine as a prudential one and discretionary one and not something that related to the limits of Article 3 jurisdiction. I mean, I'm not sure I understand your question. My repository is a growth. Well, if I guess I'm trying to understand what the distinction would be if you don't object to the concept of taking jurisdiction, but on a prudential basis with a doctrine like latches, not reaching the merits. Isn't that what the court in continental airlines said that the equitable mootness doctrine was a similar kind of prudential doctrine rather than an extension doctrine rather than truly a jurisdictional extension to the extent they said that in continental in practice, it has not been applied that way. This is a perfect example. We exercise all our rights to seek a stay. We appeal those denials. But when we got to the district court in the equitable mootness, one of the primary questions, what are you seeking to undo the plan? And we are. And the way, you know, is it a prudential consideration to say if you're appealing and you haven't gotten a stay, you cannot appeal the confirmation work because that's a, that's a per se rule now is become a per se rule based upon the test. If you seek to overturn the confirmation and send them back into bankruptcy, you have no appeal rights. I don't see how that, that really adopts any prudential consideration. I mean, that's denying appeal rights. It's exactly the same now it operates as 363 and 364 do. The doctrine in practice now operates that way. And the debtor and sponsors and investors have significant control at the mercy of the creditors to make that happen. They can put the condition precedent in the plan. Then once they see what happens, a confirmation they could decide what their odds are of prevailing on equitable mootness, irrespective of the odds of prevailing on appeal. And wait that and determine whether or not they're going to wave that condition precedent and go forward with the plan or if they're worried that maybe it won't be equitable moot, then they can decide to wait. So it's all within their control. And why should the doctrine be so uncertain? Why should parties have to sit and and and determine, okay, should we go forward or not? Is it going to be equity moot? Isn't the whole purpose of the doctrine of finality? How does that foster finality to have parties kind of betting on whether or not the appeal is going to be equity moot and whether they should go forward? It's great. It's not, I mean, the test unfortunately has become a per se role, but for things like the releases, it's very great when you're trying to cancel a client, whether or not that's going to be stricken as equity moot or whether you're going to be able to go forward or not. It's not a policy that furthers the purpose, I think it was designed for, which is the problem with finality and plans. How does a big corporation implement a plan pending on appeal? I mean, there's a problem. And the question is, how do you resolve it? And our position is equitable in the mootness. Not only is it not correct solution because it doesn't work, but it's, it's not sound on the constitution. And it's not sound on the statutory jurisdiction provisions for bankruptcy. There's other solutions. You can, the court has authority to probably propagate rules. You can do extra-dited procedures for appeals and confirmation orders. You can do partial appeals, they know of the legal issues raised in confirmation. You can do interlocatory appeals of legal issues being raised in confirmation, make the parties identify them up front, have the court roll on the legal issues in the summary judgment matter before confirmation and have that appeal pending while the confirmation hearing is going forward. You can determine that. I'll take you word for it. There's a lot of difference. You say it sometime, I think, but we'll hear from you again. All right. May I ask something to consider for for Revital and something I'd be interested in hearing from Mr. Sarota as well. If the court were even open to reconsidering the doctrine, but concluded on the facts here that there was an abusive discretion, does the doctrine of what's sometimes called constitutional avoidance, you know, or final rule, does that require that we address the matter as an abusive discretion or since we're not dealing with something like statutory construction or principles of comedy or federalism that we could still address the constitutional challenge that you've raised. And again, you can, if you want to address that on Revital, feel free to be so. Okay. Thank you. Good afternoon, Your Honours. I was wrote a call shots on behalf of one to one communications. The district court did not abuse its discretion and most respectfully this court should affirm the district court's ruling that this record relied on 18 years of precedent starting with an inbound decision of this court as well. I was talking about 18 years of precedent. It would appear in analyzing the factual scenario here that the type of bankruptcy that we have here is not the type that is generally considered a complex reorganization and might not fall into the category of cases that have been analyzed over those 18 years since continental. So tell me if you would why a case that at least seemingly is very distinct and in size and complexity clearly from continental, but continental's prodigy as well. Yes, Judge. It is true, Your Honour, that the equitable mootness doctrine appears most frequently in the context of large complicated chapter 11s, large being defined by complexity, issuance of public securities as well as, you know, big dollars. But there's nothing in any of those decisions that say that doctrine shouldn't be applied in situations where third parties, investors, creditors, and others rely on the confirmation order and would be harmed. What is that not the case? It's not the case in several decisions of this circuit, Sam Crude and two others. No, no, I mean, I'm sorry, in an articulate way. Question, what is it not the case that third parties would be relying upon agreements that have been reached? You can have a situation, Judge, where a plan of reorganization is based predominantly on a commitment to pay in the future, that there's been no current exchange of value. There's been no third party investment, a debtor reorganizes itself. It proposes its own plan without the infusion of third party money. I stand before this Court today not having represented the debtor in the chapter 11 proceedings. I represented the plan sponsor, the individual that put money into this program that relied on the chapter 11, that had his new company re-organized that, or signed executory contracts with counter parties, that distributed proceeds to creditors. So there's nothing in the doctrine that says it's limited to. What's the detriment suffered when your adversary did what it would seem that the doctrine requires you to do, which is, applied for stay and has taken whatever opportunities she can to have the status quo so that there aren't third parties who will suffer a detriment. I think the one thing that could have stopped the plan bed in its tracks, of course, would have been the posting of a bond. It was never offered. It was never discussed. But I don't think it's critical. I think what's critical is what happens post-conformation, what is the harm to third parties, what is done with this plan, and how is it pursued after the Court approves it? Many decisions of this circuit deal with the situation, Continentals wanted them, where there are very meticulous adversaries that move for a stay pending appeal and this stays denied. And the Court has still concluded that it's equitably moved. And this circuit, with seven published decisions, is not some outlier on equitable mootness, which is why I also think that Judge Linarra should be confirmed. But every state, he used the way I'm looking at it. Seven published cases in 20 years, and I'm not a back-from-seat prior petitioner. I don't want to be. The statistics that we're all available to us, tell us there are thousands upon thousands of cases that go through. Yet you can only look to it, which is not fine. Continental plus seven in 20 years, that means it's rarely applied. And I know that it's applied, you know, around the country, other circuits. But I'm sure that if they did an intra-circuit analysis, it would also be rarely applied. So it sounds like what's happening here is that Judge Linarra is applying it in an instance that maybe is quite distinct from what the normal application of the equitable mootness doctrine would be. Judge, when I refer to seven cases, I refer to seven published decisions. My understanding that there are numerous other applications that have made a trade before this Court. And appeals don't matter to me. I'm pointing out that I think the doctrine is quite prevalent alive and brought before this circuit and others on a fairly frequent basis. But Judge Linarra's in his decision went through very meticulously those continental factors. He was keenly aware of how this circuit has applied the doctrine in large complex cases. And he went factor by factor in his decision and addressed each one of them. And in fact, address... All five factors brought down to whether or not a state has been imposed. If you have a state, if a state is not imposed, and then the relatively lengthy process carries out. The vicissitudes of the law, I guess, is just to refer to it. Although all those five factors involved on that one inquiry. I don't think so, Your Honor. I think that if you can establish, for example, lack of harm, if you can question substantial consummation of a plan, if you can offer an option to carve out some relief from the plan. And this circuit has done that in the past when dealing with professional indemnifications or challenges to attorneys fees, you can propose ways not to do violence to the plan in third parties and to seek some relief. Judge Linarra's addressed that issue head on when he said that no such proposal was made. How does that really place any limits on the doctrine? And following one on Judge Greenway's question, isn't it going to be virtually every reorganization where there is some third party reliance, whether it's employees or contracts that have been entered into or a plan sponsor, distributions that have been made to third parties? How do you cabin it if what we're looking at is some, is third party injury and substantial confirmation, which just means that distributions have begun, not that they've concluded. Does that incentive for the debtor to use this doctrine as a sword, not a shield, and rush to try to get substantial confirmation on the record? Judge, the best answer to that question is that the doctrine has been limited and narrowed by this circuit opinion after opinion. But in three of the seven published opinions that you referenced and fourth that's an NPO, this court has had to reverse because the district court applied it too broadly. Doesn't that tell us something from our own experience in trying to limit it when we've said in every presidential opinion that it's supposed to be narrow? But nearly half of those have needed to be reversed that the district courts are not using it, and perhaps given the way that the standards articulated aren't able to apply this in a way that really respects the jurisdiction that were obligated to exercise. And that's respectfully judged what this court does and did so in Semcrood because there are examples where debtors, in fact, use the doctrine as a sword and not a shield. And Semcrood is the primary example of that where the debtor attempted to deprive a party from having an adversary proceeding litigated and then embedded that in a plan and used the doctrine of equitable mootness to argue that that adversary proceeding should have never seen the light of day. And the third circuit said that was an abuse of discretion. And by the way, the $207,000 that were issued in that case on $160 million of distributable could not conceivably rise to the level of applying this narrow doctrine. And so what I think the circuit has seen is a migration from Continental, which is a planned construct, equitable mootness doctrine, to debtors using it, some would argue misusing it as a sword to shoehorn in other areas, whether it's objecting to a Thurnees fees, indemnification provisions, and so the circuit has narrowed it extensively. Kagan Well, why wasn't that the case here? I mean, is it true that at the March 19 hearing, which was on the motion for a stay that your client announced its intent to invoke equitable mootness? And that's before the plan even took effect when there was litigation about a stay. Doesn't that suggest that the part that debtors understand this to be an invitation to use the doctrine as a sword at the early stages of confirmation proceedings? Sotomayor Toad, it was the statement of the reality. The plan is a plan of reorganization that required payments to be made in order to extract creditor consent and approval. There are obligations on their plan just like an ordinary contract. And so we were not misleading anyone with respect to what would take place. We were substantially consummating the plan, and if substantial consummation led to us fulfilling the requirements of equitable mootness, we were going to pursue that. But the instance that the judge just brought up to you seems to point out that this is not an extraordinary circumstance. It almost seemed like this was going to be part of a routine strategy. And that's our concern. This part of the plan almost. Right. Right. That stays coming up. Okay. It's an equitable mootness time. Let's bring it out. And that's problematic. And what I wanted to focus on at the moment is if you look at the development of the doctrine, I mean, it seems that as a judge made doctrine, it was one in which a jurist said, well, we have a complex reorganization, lots of parties, lots of moving parts, lots of money going back and forth. Things have are substantially on their way. Hence, this is substantial consummation. We don't want it to get mocked up. We don't want it to get messed up. And, you know, as an equitable doctrine, we should think about equitable mootness. Here are the factors. And I agree with my colleague that, you know, it seems focused on the stay. And if stay is in place, a lot of these other things fall into place. And in that case, how can it apply in this case? No offense to your client seems to be a fairly routine, not a lot of money at stake. I mean, I know it's important, everybody's client, I get that. But, you know, relatively speaking, as cases go, you know, this is not, you know, the biggest case out there. I don't see how we can start the doctrine at our balkontanental and work our way to this and in both instances. It's an appropriate application of the doctrine. And so, Judge, I would say that the doctrine is equally applicable for this reason. Your honor is suggesting that somehow, you know, a billion dollar investment from Carl Icon is important as opposed to. No, not Carl Icon. But my point is that the investment and the money put at risk and the harm to parties is relative. A smaller case, and we don't hide this, it is a smaller case. A smaller case and asking creditors who are smaller creditors that discourage their payments and asking administrative creditors to discourage their payments and having an investor who put in money, whether it was his first dollar, last dollar, big or small, and have that money now at jeopardy, is tied right into this doctrine. It just doesn't have the same amount of zeros. That doesn't make any less applicable in a plan of reorganization context. They make it less complex. It makes it less complex from the perspective of not having publicly issued securities and the level of complexity of complement. That is true, Judge. And it is less complex. We said in in order versus in an electronic, that the doctrine should only be applied to prevent, and the court from unscramble complex bankruptcy reorganizations where the appealing party should have acted before the plan became extremely difficult to retract. If this plan, where there is 350,000 in assets, it is a single member LLC with 20-something employees, and that is only about 1.3 million in terms of unsecured creditors. If this qualifies as complex, then haven't we made this exceptional doctrine the rule? Respectfully now. I mean, I think complexity obviously is in the eye of the beholder, and a chapter 11 plan always has a certain necessary ingredients, and the dollars do change, but I don't believe applying this doctrine to this case opens the door for the doctrine to be applied in every other chapter 11 plan situation. When would you apply it then? That is the next question after what the judge is disposed of. When would you apply it? When would you say no, no, no, you know, in the 11 context? Right. I could see it, Judge, in the situation, again, where there is a standalone reorganization, where the debtor is not bringing in outside investment, and the debtor is providing payments through notes or otherwise to creditors, and it's in exchange for not cash that would be the scores, but other type of consideration that can be given. It's not a third party coming in and funding the exercise and making payments and entering into contracts. You could have an environment where you could carve out effective relief, and the doctrine wouldn't be applicable. But to say that it only applies to a continental, how do you define a continental? Is it a hundred million, twelve million, eight million, fifteen million? What do you do with the definition that's just been read from one of our subsequent cases? And if I recall that's a PO, is that a recall? How do you drive what you've just said with what we've said in that case? I mean, we're requiring a complex reorganization. All disclaimers about my knowledge of bankruptcy law, but this does not sound like a complex reorganization. I think the ingredients of the reorganization plan here are akin to the ingredients of a reorganization plan in the cases like Nordow, like continental, with different dollars and without publicly traded securities. The concept is the same. Reliance and detriment to those rely in an environment where commitments are made and have to be recaptured. It's an attempt to avoid that harm. But particularly where is here, the creditor has raised repeatedly, taken every possible step to make clear that they think there are problems on the merits of the plan. That they intend to seek a stay, that they intend to appeal. Doesn't that impact the reasonableness of reliance under those circumstances? There are open issues. If there is a right to appeal, a confirmation order. Unless my recollection is wrong, Your Honor. My understanding is that there was a stay applied for in continental. I believe there was a stay applied for in Semcrood. I believe the one decision where Judge Alito concurred and didn't find that the district court abused their discretion. There wasn't a stay applied for, and he viewed that as an important factor in his concurrence. So there's nothing unique in this environment about an adversary seeking a stay and telegraphing their intention to appeal the merits of the plan. And it doesn't, it shouldn't change the applications of the, I'm sorry, the doctrine's applicability. But if it's an equitable doctrine, and the creditor has taken every opportunity to preserve its rights, how do you leave them without a remedy? You know, and a pillow remedy. Even an audience. And a pillow audience. It's exactly what was done in continental. No, I understand, but we're talking about a much broader application of what's to hear to for a minute. I rarely apply doctrine. That's my point. And Judge, the rarity of its application is in the plan of reorganization setting. The problems as I understand the circuit's decisions have been when the doctrine gets applied and tries to bring into it other extraneous non-plan related issues where effective relief can be given. If there's a plan of reorganization and there's substantial consummation and there's reliance, then the doctrine should apply based upon continental. And the other decisions of this circuit, which have narrowed it dramatically. This is not some runaway train. Every opportunity the circuit gets to address equitable mootness has done so to remind all parties that it's a rare doctrine to be only applied under exceptional circumstances. If this boils down to whether a stay was granted, and that's entirely in the discretion of the bankruptcy court. And it's not relevant whether a party has preserved their rights by seeking a stay, by getting notice of its objections and its intentions to the third party's relying. Then haven't the federal courts completely abdicated their obligation to exercise jurisdiction to the bankruptcy court that has sold this question about whether or not to grant a stay? How can that be constitutional? The initial stay application was presented to the bankruptcy court. There was a secondary stay application presented to an Article III court. The Article III judge reviewed the standards, including likelihood of success on the merits and denied the stay in the face of an argument that this could be equitably moot. And then a preliminary injunction application was brought and also denied under the standards of a preliminary injunction. Wasn't it denied on the grounds that there wasn't jurisdiction? On the interlocatory appeal? Well, I think there was a record of two. The circuit, actually, there was an application made to the circuit where I believe the circuit referenced the lack of jurisdiction, but said to the extent they had jurisdiction, they agreed with the district court's conclusion. Well, it was just missile for lack of jurisdiction. Anything beyond that would be dictum, right? It was a judge. It was a minute entry after the application was made to appeal Judge Loneres' denial of a stay. My recollection, it was a minute entry signed by Judge Ambrow, which said that the third circuit did not have jurisdiction to review the stay denial of Judge Loneres. So the stay application was presented twice and once in a form of a preliminary injunction, and it was denied. And the judge, Loneres, he articulated or rather accepted, as he's obligated to do, his jurisdiction. And then on the submissions, including an unrefuted declaration, dismissed based upon equitable mootness. But contrary to the argument that somehow Stern v. Marshall is some sea change on bankruptcy court jurisdiction, there are many examples where a bankruptcy court does not have its decision reviewed. I believe in the Sam Crude case, there was reference that the only known playground, and I'm sure I'm not citing it perfectly, but it was something to the effect that equitable mootness as far as this court knows, has only one playground, and that's in bankruptcy. Well, there are exempt, there's a lot of big kids in that playground. Some of them include Lehman Brothers and Ron, General Motors and Chrysler. All sales that took place and never saw Article III review. As Judge Ambrose said in Sam Crude, this doctrine is tied to 363M, 364A, and the gap left by 1127B, to provide the critical need of finality on commercial transactions. Can you address some of the other intervening cases that we have to deal with? Because the Supreme Court, just in the last few years in spring communications, for example, declined at the younger abstention in Zewat Dowski versus Clinton. I'm declined to apply the political question doctrine, and in Lexmark, disapproved the concept of potential standing and required that it be tied to some constitutional or statutory interest. The Supreme Court also makes clear in stern and in northern pipeline that the jurisdiction of the bankruptcy courts is non-article three courts is limited. At the same time, Thomas and Schor in northern pipeline has emphasized that a adjudication by those non-article three courts is only constitutional because it's subject to review on appeal. So when we look at the evolution of the Supreme Court's cases in the mandate to exercise jurisdiction, including of appeals over non-article three courts, like in Raditz, for that magistrates act, for example, and our own experience with the doctrine and trying to maintain a narrow doctrine over these 18 years, which has not been successful about half of the time. With cases that have come to us, why, why, shouldn't we reconsider the doctrine itself? Judge, with respect to Stern v. Marshall first, Stern v. Marshall is tied back into the 1982 decision of northern pipeline, which addressed the bankruptcy courts limited jurisdiction, and specifically in Stern v. Marshall, addressed the bankruptcy courts inability to address a state cause of action asserted an account or claim. There is nothing in Stern v. Marshall that changes the bankruptcy courts jurisdiction except as to that particular core proceeding, which it found could not be determined without issuing proposed findings of facts and conclusions of law. Every time this circuit cites Colorado River and Quackenbush in these equitable mootness doctrines, those decisions were known available, abstention decisions were known available, and addressed. I mean, as late as approximately one year ago, in Semcro, this court cited to Quackenbush again, which started, Quackenbush came shortly after Continental, which of course cites to Colorado River, and held that the doctrine was viable. The doctrine should not be revisited in the face of this court's precedent, and in the face of unanimous approval in every other circuit. It fulfills a vital importance in the context of administering bankruptcy cases, just as 363M does. There was nothing in Stern v. Marshall or any Supreme Court case that guts 363M, 364A, which denies Article III review of the largest commercial transactions in the world. In the world. But you agree the statute provides for confirmation plans being subject to review by Article III courts? I do, and I think that this Court said it well when it referred to 1127B and the need on a very limited basis, very limited basis, to fill that gap. But the argument that somehow every Article I decision must be reviewed by an Article III court raises concerns as to whether there are many other unconstitutional provisions within the bankruptcy code. There's a requirement when you file an appeal under 8,000, too, that you do so within 14 days. If you missed that 14-day deadline, the Stern v. Marshall give you the opportunity to come to an Article III court and say it's unconstitutional to deprive me of my opportunity to review the merits of an Article I court. It says that. So that's a different case because there he just said that Congress, in drafting that language defined jurisdiction, and they clearly have that of 30. That's different from how we would be 363. The fact that a 14-day period is required for taking the appeal. If that's a jurisdictional limit, then that's when the Congress is determined and they can do that. I'm not here nor would I be successful in doing it to an any way, shape, or form convinced this Court that the equitable movement doctrine should be expanded. The point is that when you review the district court's decision, a detailed decision based upon a declaration that was not refuted, that I respectfully suggest you can't conclude that Judge Lennaris abused his discretion in following this Court's precedent and the facts that were before. Thank you, Mr. President. Sorry, one question. Is there any case where a court has addressed the constitutionality of the doctrine on the merits? I believe that the only reference that I've seen of late was I believe in the Semcroot case that was referenced to the UNR decision out of the seventh Circuit and the conclusion that it was supported by Federal Common Law and, again, not to be repetitive, filling in the blanks on 363, M and 364E. But I respectfully suggest Judge Kraus that then Judge Alito put into play, I know Chief Judge McKee was in the dissent, the constitutionality of the doctrine, when it was visited by the Circuit in 1996, and that dissent has been cited, I believe in almost every equitable witness case over the last 18 years. Thank you very much for your time. Thank you. Is there a resource in here, anything? Is there a resource in here? Yes, I have. I believe he's there for some time. He didn't let's say that. No, I'll answer it. Thank you. Judge, you should be seen in that heard. Just a couple quick points. I won't take that personally. No, no, no. No, I should know best of the day. Judge Brinawey, you talked about the fact that there's only seven reported decisions in the Circuit and it seems like it's really a plot. I don't, unfortunately, on the statistics, but I would submit to you that this doctrine is applied quite often in the district courts and you probably don't see it in the plain vanilla cases such as this because creditors can't afford to appeal. It doesn't make sense to appeal. There's a lot of various factors that go into whether a party takes an appeal to the public or the public. And in small cases, usually the committee spearheads the objections, if any, to a plan. Individual creditors do not get actively involved most of the time. I'm just talking general from my experience because of the costs and things like that. The committee is supposed to represent their interest. I happen to have a client who had a very substantial claim who is a public company. So they do have the resources to pursue an appeal to the Third Circuit. But I just want to make it clear that I don't think that just because this court has not seen dismissals of plain vanilla cases on the basis of equitable mootness, that that is not going on all over this district and every other district. In fact, Judge Lennaris has dismissed other cases in the past based upon equitable mootness and that have not come up to this level on appeal. So I don't think this is rare. I think this is becoming the rule. As far as comments about reliance and third parties. Do you believe it's been misapplied then? Excuse me? I suppose that you believe it's been misapplied. I think it's not applied the way it was meant to be applied. It's a narrow exception and very extreme circumstances where you have a Lehman brothers or reorganizations that are so complicated and so complex and involved in lines by truly third parties. We're not talking about a plan sponsor that comes in and invests. That's not a third party. This plan sponsor waived the condition precedent to finality. They assume the rest. We're talking about third parties when you put stock on the stock exchange and a person goes out and buy that stock. They don't know the whole dealings of the bankruptcy and it's on appeal and such. But people coming into a company for instance, the ordinary course. They enter into a contract with a customer. Their customers have been watching the bankruptcy throughout. They know what's going on. They're not outside third parties who have no idea what's going on. I mean some of them in this case unfortunately most of the their customers they didn't give notice on the bankruptcy. They assumed they had executory contracts right through the bankruptcy case and didn't give any notice to the parties. Who parties to exact your generic contracts and didn't schedule them. That was another issue significant that we raised on appeal. What about the Lehman brothers contracts? Why wouldn't why he shouldn't equitable witness via viable doctrine in that context? How else would you manage such a situation? In the context of Lehman brothers. It needs to be a solution to that problem in that context. My position before was that there's other ways to address it. If you are going to address its weapon will witness then I think the test has to be refined. There has to be some more black and white lines that the courts can apply. And the most significant problem with the test as it stands right now. It says if you are going to court and you have not come to court, not on the state. Even if you have sought to stay if you have been denied a stay and you are seeking to overturn the confirmation order, the case is equably new. That's one of the biggest problems. You can't challenge a confirmation order. And that's my client's right. My client's right to appeal the confirmation order that the plan was not confirmed. It didn't comply with the code. There's requirements of the bank. We got to there. That was right. There's ways to refine the test to make it only apply. And I know the court has been doing that as the court mentioned throughout these cases. It's been tailoring the test. But the district courts are not getting the message. Is there any problem with reverting to the way a court's power and equity has traditionally been used? That is, it's not the decline to consider the merits of a case, but in fashioning a remedy. I mean, basically what Ben Judge Alito suggested in his dissent was the appropriate way to consider the issue of the complexity and the difficulty with unraveling a third party of your alliance. Why isn't that just something professioning or remedy after consideration of the merits? That's a good point. And I agree with Justice Aliyah. If you hear the appeal on the merits and you determine the appeal on the merits and then you look and you fashion the remedy, that's much more appropriate than just missing an outright. And in fact, when you review the merits, you all certain, you'll have a sense of how egregious the confirmation order was. Did it not comply in a small respect with the bankruptcy code? Were there huge legal errors or small legal insignificant ones, not relevant? I think that Justice Aliyah, Alito's approach that he articulated in continental was the right approach. And in one more vote, you were the one who won. And I know you were on his side, unfortunately, that... I'm a Brown's fan, I'm not used to losing. But it did make sense. And I think the only counter argument to that is that is it was the used to digital resources to decide the entire merits of the appeal only then only give a very limited remedy. And so I think the risk in that is to make sure that if courts do consider all the merits of the appeal, that... And they're going to limit the remedy that they try to give as broad of remedy as possible. Are you aware of any cases I asked your adversary where a court has addressed the constitutional challenge to equitable moodness on the merits? Because it appears that in terms of raising and then preserving the argument that you and your client are the rare exception. Well, all the circuits have the equitable moodness, Dr. And every recently, all the briefs that have gone up on appeal, the circuits that we've seen, there's a lot of briefs and a lot of people have challenged the constitutionally. I don't know of any circuit that has decided it yet, but it has been raised and raised. I think we listed some in our briefs below. There has been... this issue has been raised repeatedly now, particularly in life's turn. There has been many parties who have already been understood as this is a non-constitutional, there's no statutory authority. So it's just a matter of time before one of the circuits does decide. It's the question of which circuit has come to decide it first. But I'm not aware of any... this isn't where the court has decided it in any circuit yet. Thank you very much. I'm going to turn another brief break and then we'll ask you. Thank you. yo