Zone of Insolvency

Zone of Insolvency

Tag Archives: Equitable Mootness

Eleventh Circuit rules doctrine of equitable mootness applies in chapter 9

Posted in US

On August 16, 2018, the United States Court of Appeals for the Eleventh Circuit issued an opinion in the chapter 9 case of Jefferson County, Alabama, reversing the decision of the District Court and ruling that the doctrine of equitable mootness applies in municipal bankruptcies.

In Jefferson County’s chapter 9 case, the bankruptcy court confirmed the County’s chapter 9 plan over the objection of a group of sewer ratepayers, which provided for the issuance of approximately $1.8 billion of new sewer warrants with maturities that ranged up to 40 years. The chapter 9 plan included a provision that the bankruptcy … Continue Reading

Stop in the Name of Equity: Second Circuit Affirms Dismissal of Appeals in Chapter 11 Liquidation Proceedings as Equitably Moot

Posted in US

MissionComplete_464402679In a case of first impression, the Second Circuit recently held that the doctrine of equitable mootness is applicable in appeals arising from Chapter 11 liquidations and affirmed the decision of the Southern District of New York to dismiss the appeals of three decisions in the Chapter 11 liquidation proceedings of the former book retailer Borders.

A Primer on Equitable Mootness

The equitable mootness doctrine allows a district court to dismiss a bankruptcy appeal when the district court determines that although relief could be provided, implementation of the relief would be inequitable. In the Second Circuit, the appeal of a … Continue Reading

Third Circuit Places Equitable Mootness Burden On Plan Proponents

Posted in US

Eggs_166420687After a plan of reorganization is confirmed by the bankruptcy court, the plan proponents often seek to consummate the confirmed plan as soon as possible by implementing a series of restructuring transactions.  The implementation process, or “going effective,” is often referred to as “scrambling the eggs.”  Once the eggs are scrambled, any pending appeal of the plan runs the risk of being dismissed as “equitably moot,” without any consideration of the merits raised in the appeal.

In In re SemCrude L.P., the Third Circuit Court of Appeals refined the equitable mootness doctrine to make it more difficult for reorganized … Continue Reading