# Opposition Brief — Bank of New York v. Continental Airlines, Inc., 117 S. Ct. 686 (1997) (No. 96-662)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1997

## Text

Supreme Court U. “i
wv Pha ae
No 96-662 ~~ | NOY 27 1996
CLERK
In The isa
Supreme Court of the United States
~--

October Term, 1996

THE BANK OF NEW YORK, as Collateral Trustee, NEW
JERSEY NATIONAL BANK, HARRIS TRUST AND
SAVINGS BANK, and BOATMEN’S FIRST NATIONAL
BANK OF OKLAHOMA, as First, Second and Third Series
Trustees, respectively,

Petitioners,

VS.

CONTINENTAL AIRLINES, INC.,
Respondent.

On Petition for a Writ of Certiorari to
the United States Court of Appeals for the Third Circuit

RESPONDENT’S BRIEF IN OPPOSITION

RICHARD P. SCHIFTER
Counsel of Record
ANDREW T. KARRON
MICHAEL L. BERNSTEIN
KARI M. DESGALIER
ARNOLD & PORTER
Attorneys for Respondent
555 Twelfth Street, N.W.
Washington, D.C. 20004-2253
(202) 942-5000

i
QUESTION PRESENTED

Whether under the facts and circumstances of this case the
courts below properly applied the doctrine of “equitable
mootness,” which has been uniformly adopted by all federal
circuit courts that have considered the question, in dismissing
Petitioners’ appeals of a bankruptcy court order confirming a
Chapter 11 plan of reorganization and incorporating prior
interlocutory orders denying Petitioners’ claims, where:
(a) Petitioners knew that the plan of reorganization would be
implemented promptly unless they obtained a stay of the
confirmation order; (b) Petitioners also knew that if the plan
were implemented, their appeals might be subject to dismissal
under the equitable mootness doctrine; (c) Petitioners nonetheless
failed diligently to seek a Stay and refused to post any bond to
support a stay; and (d) the relief sought by Petitioners would
retroactively alter the fundamental economic basis of the
confirmed plan and, therefore, be inequitable to investors and
numerous other third parties who had relied on the unstayed
confirmation order in substantially consummating the plan of
reorganization?

il

PARTIES TO THE PROCEEDING BELOW

Respondent incorporates by reference Petitioners’ list of
parties to the proceeding below.

RULE 29.6 LIST

Continental Airlines, Inc. has no parent company. Its only
non-wholly owned subsidiary is Air Micronesia, Inc.

iii

TABLE OF CONTENTS

Page
(Site SIMPY SMM RED 60. ss. s cubs. c eon. i
PARTIES TO THE PROCEEDING BELOW ........ ii
cc ii
WIR TITS ooo oes voc doiedccece..e. iii
Beemer Se RPIPPITIOS oo occ ones nce c cee. iv
ot hochcsas target coe dual EE a ae es l
STATEMENT OF JURISDICTION ................ l
SIAIEMEN? OF THE CASE .................... l
A. Background: Continental’s Chapter 11
Bankruptcy and Reorganization ............. 1
B. Nature Of Petitioners’ Claims At Issue ........ 3
C. The Bankruptcy Court’s Determinations That
Petitioners’ Claims Lacked Merit ............ 4
D. Petitioners’ Failure Diligently To Seek A Stay Of
The Confirmation Order ................... 7
E. Substantial Consummation Of The Plan ...... 10

iv
Contents
Page

G. The Third Circuit’s Affirmance Of The District
Court’s Dismissal Of TheAppeals ............ 11

1. The Jn Banc Majority Opinion .......... 11

yey SP eer eT ee rele 14

REASONS FOR DENYING THE WRIT ........... 15
I. The “Equitable Mootness” Doctrine Applied By

The Third Circuit Is Consistent With The Law In
Every Circuit That Has Addressed The Issue. .. 16

A. Nine Circuit Courts Of Appeals Have
Adopted The “Equitable Mootness” Doctrine
In Bankruptcy Appeals As An Essential
Means Of Furthering Important Bankruptcy
FUMED. sc kccbdendhctakes hee Labneedes 16

B. There Is No Conflict Among The Circuits
As To The Legal Standazd To Be Applied In
Determining Whether A Bankruptcy Appeal
RS TOE Be ons cx cdsandiaeecsoss 19

Il. Petitioners Have Waived Any Challenge To The
Legitimacy Of The Well-Established “Equitable
WECRNOEE EOORUIIIE. 5 ocak eid stdebicessiacos 22

Il. This Case Does Not Present Any Broad Issues Of
Federal Bankruptcy Law Or Policy That Require
Resolution By This Court .................. 23

CAIINGAASRIEE 6 £65 os Wb Gh aS VER Veece an uvensadeeses 24

Contents
Page
TABLE OF AUTHORITIES
Cases Cited:
Aetna Casualty & Surety Co. v. LTV Steel Co. (In re
Chateaugay Corp.), 1995 WL 386483 (S.D.N.Y. June
28, 1995), rev’d and remanded on other grounds, 94
Fue 17S Ce Ce, NSO Or ere 20, 21
Aetna Casualty & Surety Co. v. LTV Steel Co. (In re
Chateaugay Corp.), 94 F.3d 772 (2d Cir. 1996) ... 20
Central States Southeast and Southwest Areas Pension
Fund v. Central Transp., Inc., 841 F.2d 92 (4th Cir.
EER Sh s68 hoo Ode ea oa: 17, 20, 23
Colorado River Water Conservation District v. United
wees, 424 UB. G6 CSTE). eS 22
First Union Real Estate Equity & Mortgage Invs. v. Club
Assocs. (In re Club Assocs.), 956 F.2d 1065 (11th Cir.
PPPOE bas Kha oo eka tea Soe chic ene ti 17, 20
Frito-Lay, Inc. v. LTV Steel Co., Inc. (In re Chateaugay
Corp.), 10 F.3d 944 (2nd Cir. 1993) ....... 11, 17, 20, 21
Holly Farms Corp. v. NLRB, 116 S. Ct. 1396 (1996) . 22
In re Andreuccetti, 975 F.2d 413 (7th Cir. 1992) ..... 17

In re AOV Indus., Inc., 792 F.2d 1140 (D.C. Cir. 1986),
vacated on other grounds, 797 F.2d 1004 (D.C. Cir.
ce i OEE LOT E OPEN ey EDS SR Gh! FO atte nee 17, 20

vi

Contents

Page
In re Clark, 172 B.R. 701 (Bankr. S.D. Ga. 1994) .... 14

In re Continental Airlines, Inc., 146 B.R. 536 (Bankr. D.
EPs SE oo ar Ee ED 6 ES he Ae we aks bis 5

In re Continental Airlines, Inc., 154 B.R. 176 (Bankr. D.
Bi TOD ois occ s 6h 0.a0 anas cess cate hanese 7

In re Farm Bureau Services, Inc., 835 F.2d 877 (6th Cir.
BORE ss 6b euR aces Seah Peek wow oo Rhee eee 14
OORT ai a bnew hak ede 4 chk eawe ue ahaa 18
In re Meyer, 173 B.R. 419 (Bankr. D. Kan. 1994) .... 14

In re Onouli-Kona Land Co., 846 F.2d 1170 (9th Cir.
7 | RIB Sits Bee ac ne ae Pu hep at gh i Syne 18

In re Specialty Equip. Cos., 3 F.3d 1043 (7th Cir. 1993) ... 17

In re Stadium Management Corp., 895 F.2d 845 (1st Cir.
SGD nncak sah ocak oe 00 op 0b ss db aes C908 Ue tines 18

In re UNR Indus., Inc., 20 F.3d 766 (7th Cir.), cert.
denied, 115 S. Ct. 509 (1994) ............... 17, 18, 19

Manges v. Seattle-First Nat’l. Bank (In re Manges), 29
F.3d 1034 (Sth Cir. 1994), cert. denied, 115 S. Ct.
LUGE CIO cen oan tk cacine vend uaeks 0456 véeages 17, 18

vii

Contents

Page
Miami Center Ltd. Partnership v. Bank of New York, 820

F.2d 376 (11th Cir. 1987), cert. denied, 488 U.S. 823

EROMND cho sviablisiebescive ces ee 10
NLRB y. Bildisco & Bildisco, 465 U.S. 513 (1984) ... 18
Official Comm. of Unsecured Creditors of LTV Aerospace

& Defense Co. v. Official Comm. of Unsecured

Creditors of LTV Steel Co. (In re Chateaugay Corp.),

768 F206 322 (26 Clr. 1993) ..;..:........... ide Bde a
Pension Benefit Guaranty Corp. v. Braniff Airways, Inc.,

Pan wae Seo (oe Cie S008 as 9, 10
Pepper v. Litton, 308 U.S. 295 ( | MPEG Maes ee SED sp 23
Quackenbush vy. Allstate Insurance Co., 116 S. Ct. 1712

ROME Vedas ket c onions iu ee 22
Rochman vy. Northeast Utils. Serv, Group (In re Public

Serv. Co. of N.H.), 963 F.2d 469 (ist Cir.), cert.

denied, 506 U.S. 908 (1992) ................... 17, 18
Trone v. Roberts Farms, Inc. (In re Roberts Farms, Inc.),

Oe Bae tes OR Cle 10RD is, fe: 17
United States v. Salerno, 932 F.2d 117 (2d Cir. ROee? desc 18

United States v. Williams, 112 S. Ct. 1735 (1992) .... 22

viii

Contents

Page
Statutes Cited:
LE Ae BOR) i kes as nope so Rens cwksedeSadaks 5
Sh: Dib hes EDR his e's | i tance Ciles sd meewaD Oe deste 18
LEDS SOO KE a oda 4 bode k eENS Fis RNS 5
Sf RG SD ikki dies Psi eee et ie ceuse 18
EA Wide OED, oon eae) dues ad Keb be eeekin 18
BE Fi hes. BO ck cmcucachsikcvacs ye dastaeteees 3
PUBS. § SEGUE ic iss ee CEMA CAMA 11
AL UBL. EF TIZOOMAD 5 0s oh Sees Ses eine 6
TE SAA BD EIGa Do a cos ubvekes Keun scessenss 6
Rules Cited:
Supreats Comit Rel Dos ci cccisc cess ccctenseuves 15, 23
Federal Rule of Bankruptcy Procedure 7062 ......... 8
Federal Rule of Bankruptcy Procedure 8005 ......... 8

Federal Rule of Bankruptcy Procedure 9006(a) ....... 8

ix

Contents
Page
Other Authority Cited:

J. Key, The Advent of the Serial Chapter 11 Filing and
its Implications, 8 Bankr. Dev. J. 245 (1991) ...... 10

1

Respondent Continental Airlines, Inc. respectfully opposes
the Petition for Writ of Certiorari. The decision of the United
States Court of Appeals for the Third Circuit upholding the
dismissal of Petitioners’ bankruptcy appeals under the well-
accepted doctrine of equitable mootness — the legitimacy of
which Petitioners never challenged below — is consistent with
the law in every circuit court of appeals that has addressed the
issue and presents no issue of exceptional importance warranting
review by this Court.

OPINIONS BELOW

Respondent incorporates by reference Petitioners’ statement
of opinions and judgments below.

STATEMENT OF JURISDICTION

Respondent incorporates by reference Petitioners’ statement
of jurisdiction.

STATEMENT OF THE CASE

A. Background:Continental’s Chapter 11
Bankruptcy And Reorganization

This case involves a narrow dispute relating to one of the
largest successful Chapter 11 bankruptcy reorganizations in
history. For approximately two years after filing Chapter 11
bankruptcy petitions on December 3, 1990, Continental
Airlines, Inc. and 53 of its subsidiaries (hereafter collectively
referred to, along with the subsequently established reorganized
entity, as “Continental”) negotiated intensively with creditors
and prospective third-party investors to develop a viable plan
of reorganization. (Appendix (“App.”) to Petition for Certiorari
(“Pet.”) 3a, Sa).

2

Those negotiations ultimately bore fruit: on January 13,
1993, Continental filed its Revised Second Amended Joint Plan
of Reorganization (the “Plan”), which provided for the
consensual restructuring of more than $6 billion in asserted
secured debt and lease obligations and for the resolution of
approximately $3 billion in unsecured claims. (JA 614-814).
The Plan was based on an Investment Agreement by outside
investors (Air Partners, L.P. and Air Canada) to invest $450
million in the reorganized company (the “Investment”) if certain
financial and other conditions were satisfied, including
limitations on the reorganized company’s liability for
administrative claims arising out of the bankruptcy case. (App.
Sa, JA 391-414). The Investment Agreement was expressly
described in the Revised Third Amended Disclosure Statement
and appended to it. (App. 5a, JA 391, 636, 713, 718, 822).

An overwhelming majority of Continental’s thousands of
creditors supported the Plan. (JA 1546). Over 85% of the voting
holders of unsecured claims and 96 of the 100 classes of secured
creditors voted to accept the Plan.

On April 16, 1993, the United States Bankruptcy Court
for the District of Delaware (the “Bankruptcy Court”) confirmed
the Plan after a nine-day evidentiary hearing. (JA 1532-1613).
The Confirmation Order was based, among other things, on
the Bankruptcy Court’s determination that the Plan was
“feasible,” as required by section 1129(a)(11) of the Bankruptcy
Code. (App. 135a, 137a-139a, JA 1548-53 FJ 31, 35-37, 40).
The feasibility determination rested on the Bankruptcy Court’s
careful consideration of numerous facts and factors set forth in
the Confirmation Order. In particular, the court found that
because the total administrative claims against the reorganized
company would not exceed the Investment Agreement cap on
such claims, the Investors would invest the $450 million that
was essential to the Plan. (App. 19a-20a, 137a-138a).

3

Petitioners’, who were among the few groups of creditors
that did not support the Plan, appealed the Confirmation Order
and other interlocutory Bankruptcy Court orders incorporated
therein to the District Court (collectively, the “Appeals”). (App.
6a). However, Petitioners failed to obtain a stay of the
Confirmation Order, primarily because they refused to offer to
post any supersedeas bond in support of a stay.” (App. 6a, 16a,
66a, infra, p. 9).

On April 27, 1993, in reliance upon the unstayed
Confirmation Order, the Plan was consummated with the $450
million Investment and related transactions accomplished in a
consolidated closing. (App. 6a-7a, 25a-26a; infra, p. 10).
Continental successfully reorganized and emerged from
bankruptcy as the sixth largest air carrier in the United States.
(JA 1454).

B. Nature Of Petitioners’ Claims At Issue

Petitioners’ Appeals relate to only a portion of a $180
million alleged secured claim Petitioners filed in Continental’s
bankruptcy. Under the Bankruptcy Code, alleged secured claims
such as Petitioners’ have two separate components. The claim
is deemed secured up to the actual value of the collateral. 11
U.S.C. § 506(a) (1995). To the extent the amount of the claim
exceeds the value of the collateral, or is “undersecured,” the
amount in excess of the value of the collateral (the “deficiency”)
is treated as an unsecured claim. Jd. (See also App. 61a).

1. As used herein, “Petitioners” refers to Petitioners’ predecessors-in-
interest as trustees for holders of certain debt certificates issued by Continental
and secured by aircraft and aircraft engines (the “Collateral”).

2. Petitioners’. disingenuous statement that they could not post a bond
of $450 million (Pet. at 7) ignores the District Court’s invitation to propose a
lesser amount and Petitioners’ refusal thereafter to offer to post any bond.
See infra, p. 9.

4

Pursuant to the Plan, the secured component of Petitioners’
claim with respect to the Collateral was treated identically to
those of other secured claimants: Continental returned the
Collateral to Petitioners. (App. 46a). In addition, prior to
confirmation, Petitioners and Continental reached a cash
settlement concerning that portion of the undersecured
component of Petitioners’ claim which was based on alleged
“use” decline in the value of the Collateral due to use and wear
and tear. (App. 5a-6a, JA 1511).

The underlying dispute here relates solely to Petitioners’
contention that the Bankruptcy Court erred in refusing to treat
the portion of Petitioners’ unsecured claim relating to an alleged
decline in the market value of the Collateral as an administrative
priority claim — that is, a claim to be paid by the reorganized
company in cash, superior to those of other unsecured creditors.
(App. 5a-6a, 61a). Over Petitioners’ objection, this portion of
their claim was treated as a general unsecured claim and not
given any special priority status. (App. 46a).

C. The Bankruptcy Court’s Determinations
That Petitioners’ Claims Lacked Merit

On June 28, 1991, Petitioners jointly moved for “adequate
protection” of their interest in the Collateral (“Initial Motion”).
(App. 4a; JA 47-48).° In that motion, Petitioners requested
payment from the debtors-in-possession to compensate
Petitioners for alleged declines in the value of the Collateral.
However, Petitioners did not seek to lift the automatic stay so
they could repossess the Collateral. (App. 190a, JA 47-59).
Continental opposed the motions on the ground, among others,

3. Petitioners’ reference to the filing of an earlier motion by one of
Petitioners’ predecessors-in-interest (see Pet. at 3) ignores the subsequent
withdrawal of that motion (see App. 4a).

5

that Petitioners’ recovery was barred by their failure to move to
lift the automatic stay — that is, to seek return of the Collateral
and to assume the risk of market value decline. (App. 4a, 190a).

After a four-day hearing, the Bankruptcy Court denied the
Initial Motion on August 27, 1992. In re Continental Airlines,
Inc., 146 B.R. 536 (Bankr. D. Del. 1992) (App. 187a-198a).
Weighing the evidence presented at the hearing, including the
testimony of three experts, the Bankruptcy Court held that
Petitioners were not entitled to recover because the value of the
Collateral in fact had not declined since the filing of the motion.
(App. 4a, 197a).

Not until August 14, 1992, did Petitioners move under
Bankruptcy Code § 362(d) to lift the automatic Stay so that
they might repossess the Collateral. (JA 213-35). It had been
21 months since the petition date, and months since Continental
opposed the Initial Motion on the grounds that Petitioners had
failed to seek to lift the automatic stay. A month later, on
September 14, 1992, Petitioners renewed their motion for
“adequate protection” pursuant to Section 363(e), seeking
payment for alleged declines in the Collateral’s value from July
1991 forward. (JA 243-53). The Bankruptcy Court conducted
hearings on the motions on several days in late 1992, concluding
the hearings on February 2, 1993.

Once again, evidence adduced at the hearings showed that
the Collateral had not declined in market value since August
14, 1992, but — to the contrary — actually had increased in
value. (JA 292-94; 445; 464-65; 482-83; 942-43; 1133-35:
1146, Row D-E, Columns 17-20; 1146, Columns 6, 12, 15
and 16; 1169). The evidence indicated that any decline in value
had occurred between September 1991 and early August 1992.
(Id.) . ‘

6

On January 13, 1993, Continental filed its Second Amended
Plan of Reorganization, based on the Investment Agreement.
See supra, p. 2. As noted previously, the $450 million
Investment that was the linchpin of the Plan was subject to
several conditions precedent. (JA 391-414). A central condition
was that Continental’s administrative expenses, which would
be liabilities of the reorganized entity, would not exceed a
specified amount. (See Investment Agreement § 6(xi)(e), JA
408; supra, p. 2).

Although Petitioners’ pending motions were fully briefed
and argued as of March 16, 1993 — the first day of Plan
confirmation hearings — the Bankruptcy Court had not yet
decided the motions. (App. 18a). However, resolution of the
motions was critical to determining whether the proposed Plan
would be feasible. Allowance of Petitioners’ asserted $117
million administrative priority claim would result in
administrative claims greatly in excess of the Investment
Agreement cap. Under the Bankruptcy Code, administrative
expense claims would be immediately due and payable by the
reorganized entity. 11 U.S.C. § 1129(a)(9)(A). Post-
reorganization payment of such claims would substantially
deplete the cash available to the reorganized airline, which would
be operating in a volatile industry where cash reserves are critical.
If, therefore, Petitioners’ motions were granted, the Investors
would decline to invest the $450 million, and the Plan would
be infeasible and therefore unconfirmable under 11 U.S.C.
§ 1129(a)(11). (App. 19a-20a, JA 1205, 1432, 1550, 1744-
46).

Recognizing that resolution of Petitioners’ pending motions
was necessary before the prospective obligations of the
reorganized entity, and the feasibility and confirmability of the
Plan, could be assessed, Continental and the Investors asked

7

the court to rule on Petitioners’ motions in conjunction with
Plan confirmation. (JA 1455, 1458, 1473). At the conclusion
of the confirmation hearing on April 16, 1993, the Bankruptcy
Court denied both motions. It held that Petitioners were not
entitled to market decline “adequate protection” payments for
periods prior to their motion to take back their Collateral, and
that the evidence established that the value of the Collateral had
not declined after that date. Jn re Continental Airlines, Inc.,
154 B.R. 176, 180-82 (Bankr. D. Del. 1993) (App. 183a) .

In its Confirmation Order determining that the Plan was
feasible, the Bankruptcy Court necessarily relied upon its
decision denying Petitioners’ motions. (App. 137a, 138a, JA
1551-52). The Bankruptcy Court recognized that its
determination that Petitioners had no administrative claim
resolved any uncertainty concerning satisfaction of the
Investment Agreement condition limiting administrative claims
and therefore removed an obstacle to the Investment which was
essential to the Plan’s feasibility.* (App. 19a, 135a, 138a, JA
1548-51 ¥{ 31, 35). The Bankruptcy Court incorporated these
findings into the Confirmation Order because they were integral
to the required feasibility determination. The unsecured portion
of Petitioners’ claim thus was denied special status and received
the same treatment as all other unsecured claims.

D. Petitioners’ Failure Diligently To Seek
A Stay Of The Confirmation Order

Petitioners undertook limited, procedurally flawed, and
ultimately futile efforts to obtain a stay pending appeal of the
Confirmation Order. Most significantly, they refused to offer to

4. Resolution of Petitioners’ administrative claim also made it
unnecessary to require the Debtors to deposit funds in a segregated account
as Petitioners had requested. (App. 138a).

8

post a bond in any amount. (App. 107a). They made this choice
despite the District Court’s requests that Petitioners suggest a
reasonable bond and despite their knowledge that failure to
obtain a stay risked dismissal of their Appeals. (App. 16a, 24a,
59a).

The automatic stay of the Confirmation Order pursuant to
Fed. R. Bankr. P. 7062 expired on April 27, 1993, ten days
after entry of the Confirmation Order. Fed. R. Bankr. P. 9006(a).
Yet, Petitioners waited six days after entry to request a stay of
the Confirmation Order. (JA 1614-20). Moreover, when
Petitioners finally did request a stay, late on April 22, 1993,
they improperly moved in the District Court, in contravention
of Fed. R. Bankr. P. 8005, which requires that such a stay motion
first be presented to the Bankruptcy Court. For that reason, on
April 23, 1993, the District Court dismissed the stay motion
without prejudice. (JA 1668-1711, 1757-63). The District Court
concluded that dismissal was

particularly warranted under the facts of the
instant case, where the “emergency” nature
of [Petitioners’] motion was created in large
measure by [Petitioners]. [Petitioners] could
have brought an application for a stay
pending appeal in the Bankruptcy Court as
early as Monday, April 19, 1993.

(JA 1762).

Petitioners inexplicably waited three more days, until late
in the afternoon of April 26, 1993, before seeking a stay from
the Bankruptcy Court. Bankruptcy Court Docket Entry #7115.
Because the Bankruptcy Court was unavailable, the District
Court heard the stay application on April 27, 1993. (JA 1712-
54).

9

The District Court again denied the stay motion (JA 1755-
56), primarily because Petitioners were unwilling to offer to
post a bond in any amount. (JA 1725, 1729, 1756; see also
App. 16a, 66a). Contrary to Petitioners’ suggestion (see Pet. at
7), the District Court never required a bond in the amount of
$450 million. (App. 16a). Instead, it sought Petitioners’ views
as to what amount would be reasonable. (/d.). As the District
Court subsequently recognized, Petitioners’ failure to obtain a
stay was attributable to their own “choice not to post a bond”
of any sort. (App. 107a).

In refusing to post any bond in the District Court and,
thereafter, failing to pursue any further efforts to seek a stay in
the Court of Appeals, Petitioners were well aware that they risked
dismissal of their Appeals. They knew that, absent a stay, the
confirmed Plan would be implemented promptly and their
appeals from the Confirmation Order would be at risk of
dismissal pursuant to the well-established equitable mootness
doctrine. At both stay hearings, Continental expressly stated its
intention to consummate the Plan promptly on April 27, 1993,
if no stay were in effect. (JA 1692-93, 1742). Moreover, both
at the confirmation hearing and at the stay hearing, Petitioners’
own counsel explicitly recognized that, absent a stay, Continental
would seek to dismiss the Appeals as equitably moot. (JA 1403,
1752; see also App. 24a, 59a). Nonetheless, they declined to
take the action required to ensure that the Appeals would be
resolved prior to consummation of the Plan.

5. This case thus stands in stark contrast to the handling of appeals in
another airline bankruptcy. In Pension Benefit Guaranty Corp. v. Braniff
Airways, Inc., 700 F.2d 935, 938-39 (5th Cir. 1983), appellants arranged an
expedited appeal process in which appeals of a February 1, 1983, bankruptcy
court order to the district court and the Fifth Circuit were completed by
March 2, 1983, prior to the scheduled deadline for consummation of the
transaction at issue.

10

E. Substantial Consummation Of The Plan

Relying on the unstayed Confirmation Order, the Investors
invested $450 million in Continental.* The Investment was made
as part of a single integrated closing, which included the
following material transactions (among others): the merger of
54 Continental-related debtors into a new entity; the investment
of $110 million in cash by Air Partners and Air Canada into the
reorganized Continental; an additional $30 million investment
by Air Canada into the reorganized Continental; the purchase
by ASATT Corp., a designee of Air Canada, of $150 million
of secured notes issued by reorganized Continental; reorganized
Continental’s assumption of more than 600 unexpired leases
and executory contracts worth over $5.0 billion; the
abandonment of Continental’s interest in equipment collateral;
and the issuance of new debt and distributions of cash and stock
to various categories of creditors pursuant to the Plan. (App.
26a, JA 691, 708, 719, 1812-1815). As a result of these

6. Contrary to Petitioners’ insinuation, there was nothing sinister about
Continental’s prompt consummation of the Plan, which is the norm in large
bankruptcy cases. See, ¢.g., Miami Center Ltd. Partnership v. Bank of New
York, 820 F.2d 376, 378 (11th Cir. 1987), cert. denied, 488 U.S. 823 (1988);
Braniff Airways, 700 F.2d at 939 (expediting appeals in airline bankruptcy
case “[bjecause business exigencies required that the [ ] transaction be
consummated soon if it was to happen at all”); J. Key, The Advent of the
Serial Chapter 1] Filing and its Implications, 8 Bankr. Dev. J. 245, 253
(1991) (“the majority of plans are substantially consummated . . . immediately
after confirmation”). In this case, prompt implementation of the Plan was
essential to avoid a risk that one or more of the transactions would become
impossible due to changed circumstances. Cf. Braniff Airways, supra. The
Investment Agreement expressly provided that the Investment was
conditioned on consummation of the Plan by April 30, 1993. (JA 411).

11

transactions, the Plan was substantially consummated.’
F. Dismissal Of Petitioners’ Appeals

On May 6, 1993, Continental moved to dismiss Petitioners’
Appeals as equitably moot. (JA 1771-75). In opposing the
motion; Petitioners did not challenge the validity of the
equitable mootness doctrine, but merely disputed that it required
dismissal of their Appeals. (App. lla, 28a, JA 1965-1977).
The District Court granted the motion. (JA 1870-75). Petitioners
sought reconsideration, relying on Frito-Lay, Inc. v. LTV Steel
Co., Inc. (In re Chateaugay Corp.), 10 F.3d 944 (2nd Cir. 1993)
(“Chateaugay II”), a recent appellate decision applying the
equitable mootness doctrine, to argue again that the doctrine
did not require dismissal of the Appeals. (JA 1876-99). The
District Court denied the motion. (App. 101a-103a).

G. The Third Circuit’s Affirmance Of
The District Court’s Dismissal Of The Appeals

On appeal, a divided panel of the Third Circuit Court of
Appeals affirmed. (App. 75a-100a). After rehearing in banc, a
majority of the Court of Appeals similarly concluded that the
District Court properly applied the doctrine of equitable
mootness in dismissing the Appeals. (App. la-38a, 74a).

1. The In Banc Majority Opinion

The majority opinion, written by Chief Judge Sloviter,

7. The Bankruptcy Code defines “substantial consummation” as
“(A) transfer of all or substantially all of the property proposed by the plan
to be transferred; (B) assumption by the debtor or by the successor to the
debtor under the plan of the business or of the management of all or
substantially all of the property dealt with by the plan; and (C) commencement
of distribution under the plan.” 11 U.S.C. § 1101(2).

12

recognized that the dispositive issue was not Article III mootness
but, rather, the District Court’s application of the “widely
recognized” and “well-accepted” doctrine of equitable mootness
in bankruptcy appeals to the particular facts of this case. (App.
8a-9a). Under this doctrine, “ ‘[a]n appeal should . . . be
dismissed as moot when, even though effective relief could
conceivably be fashioned, implementation of that relief would
be inequitable.’ ” (App. 10a, quoting Official Comm. of
Unsecured Creditors of LTV Aerospace & Defense Co. v. Official
Comm. of Unsecured Creditors of LTV Steel Co. (In re
Chateaugay Corp.), 988 F.2d 322, 325 (2d Cir. 1993)
( “Chateaugay I” ). The majority cited opinions from seven other
circuit courts of appeal (for the First, Fourth, Fifth, Seventh,
Ninth, Eleventh, and D.C. Circuits) which had recognized and
applied the doctrine. (App. 9a). It also noted — and on this
point the dissent agreed — that Petitioners “have not challenged
the viability of the doctrine of equitable mootness . . . in
bankruptcy cases, nor have they cited to a case in any circuit
that rejects the concept.” (App. 11a, 28a).

The majority identified five factors that courts have
addressed in determining whether a bankruptcy appeal should
be dismissed as equitably moot. These included:

(1) whether the reorganization plan has been
substantially consummated, (2) whether a
stay has been obtained, (3) whether the
relief requested would affect the rights of
parties not before the court, (4) whether the
relief requested would affect the success of
the plan, and (5) the public policy of
affording finality to bankruptcy judgments.

(App. 13a). The majority again noted — and the dissent did
not dispute — that Petitioners “[had] not taken issue with our
identification of these factors.” (App. 13a, 30a).

13

Applying these factors, the majority concluded that, on the
facts of this case, the balance of equitable factors weighed
heavily in favor of dismissal. The substantial consummation of
the plan of reorganization; Petitioners’ failure diligently to seek
and obtain a stay — particularly in light of their knowledge of
the risk of equitable mootness; and the strong public interest in
the finality of bankruptcy judgments all favored dismissal. (App.
14a-16a, 24a). The majority also concluded that relief could
not be equitably granted to Petitioners without unfairly harming
rights of third parties. Reversing the Bankruptcy Court Orders
to allow Petitioners’ proposed administrative claim would
radically alter the fundamental economic basis of the Plan. That
would be unfair to the Investors, who had made the $450 million
investment that was the linchpin of the Plan in reliance on the
unstayed Confirmation Order and “extensive legal precedent”
recognizing the equitable mooiness doctrine, and to other absent
third-parties who similarly had relied on the confirmed Plan in
entering into numerous complex transactions involving the
reorganized Continental. (App. 20a-22a, 24a).

In this regard, the majority rejected as misplaced Petitioners’
reliance on the Plan provision authorizing Continental to pay
disputed administrative claims allowed after confirmation. The
mere existence of a mechanism that could be used for payment
of claims which, unlike Petitioners’ claims, had not been decided
prior to confirmation, did not eliminate the fundamental problem
that “in light of all the circumstances, it would be inequitable
to grant relief.” (App. 24a). Because Petitioners well knew the
risk of equitable mootness, “the Plan provisions allowing for
post-confirmation payment of allowed claims in no way
obviated [Petitioners’] obligation to seek a stay.” (/d.).

The majority also rejected, as supported by “no evidence,”
Petitioners’ suggestion that the Bankruptcy Court was
improperly influenced in its determination denying Petitioners’

14

suggestion that the Bankruptcy Court was improperly influenced
in its determination denying Petitioners’ claim. (App. 19a).
Petitioners’ argument in this regard essentially amounted to a
challenge to the Investment Agreement provision conditioning
the investment on compliance with a “cap” on administrative
expenses. But, the majority noted, Petitioners never had raised
such a challenge in the Bankruptcy Court, nor had they
identified any legal basis for such a challenge. (App. 19a). The
majority similarly concluded that the incorporation in the
Confirmation Order of the Bankruptcy Court’s denials of
Petitioners’ claims “was reasonable and reflected the inescapable
fact that [Petitioners’] claim and the confirmation of Plan were
inextricably intertwined.”* (App. 20a)

For all these reasons, the majority concluded that “[u)nder
the circumstances presented here, we can see no prudential
considerations” that would justify an attempt to fashion even a
limited remedy for Petitioners. (App. 7a, 26a).

2. The In Banc Dissent

Judge Alito, the author of the panel dissent, also wrote the
dissent in banc. (App. 27a). He recognized that

[Petitioners] have not contested the existence
of the doctrine of “equitable mootness,” and
in light of [Petitioners’] position, I think that

8. The majority’s conclusion is consistent with precedent recognizing
the appropriateness of incorporating into a confirmation order prior findings
or orders that are relevant to the determinations required for confirmation.
See, e.g., In re Farm Bureau Services, Inc., 835 F.2d 877 (6th Cir. 1987); In
re Meyer, 173 B.R. 419, 421 (Bankr. D. Kan. 1994) (stipulation and order
for adequate protection incorporated into confirmation order); /n re Clark,
172 B.R. 701, 704 (Bankr. S.D. Ga. 1994) (“confirmation order necessarily
incorporates any orders that may be entered by the court in connection with
the allowance of claims.”).

15

it is appropriate to assume the existence of
this doctrine for purposes of this appeal.

(App. 28a).

The dissent did not demonstrate any inconsistency between
the majority’s “equitable mootness” analysis and those of other
circuits. (App. 29a-30a). Instead, the dissent contended that the
majority erred in failing to “ma[k]Je an independent examination
of the basis and scope of the doctrine of ‘equitable mootness’
before engraving it in our circuit’s law.” (App. 30a). That is,
the dissent contended that the majority had erred by not
departing from the law in its sister circuits. (See App. 32a-33a).

The dissent then reviewed the development of the law of
equitable mootness and developed its own proposed approach.
Under that approach — for which the dissent cited no authority
— the Appeals should be considered on the merits, and equitable
concerns relating to Petitioners’ failure to obtain a stay, the
finality of plans of reorganization, and protection of third parties,
rights should be addressed only “at the remedial stage, if that
stage is ever reached.” (App. 37a).

REASONS FOR DENYING THE WRIT

None of the “compelling reasons” that this Court has
required for certiorari is present in this case. S. Ct. Rule 10.
To the contrary, this is simply another instance in which a litigant
who lost when well-established law was applied to complex
facts seeks to overturn that decision by belatedly conjuring up
legal theories and policy arguments in the hopes of obtaining

certiorari

In applying the “equitable mootness” doctrine long
recognized in eight other federal circuits, the Third Circuit

16

maintained the uniformity of federal law in this area. The strained
argument at the end of the Petition that ninor syntactic
differences in the courts’ references to one of the several equitable
factors that courts balance constitute a narrow circuit split is
meritless. See infra, pp. 19-21.

Petitioners’ unquestioning acceptance of the equitable
mootness doctrine in the courts below bars — and belies —
their broad challenges in this Court to its legitimacy. See infra,
§ II. Nothing in the flexible, pragmatic equitable mootness
doctrine — or the Third Circuit’s decision applying it in this
case — prevents effective appellate review of bankruptcy court
decisions or undermines established law requiring compliance
with confirmed plans of reorganization. Cf. Pet. at 13. The
dismissal of Petitioners’ appeals in this case was attributable to
their choice not to post a bond and obtain a stay of the
Confirmation Order that would have protected the interests of
all parties. That Petitioners may now regret the entirely
foreseeable consequences of that tactical decision in no way
undermines the soundness of the decision below.

L

THE “EQUITABLE MOOTNESS” DOCTRINE
APPLIED BY THE THIRD CIRCUIT IS CONSISTENT
WITH THE LAW IN EVERY CIRCUIT THAT HAS
ADDRESSED THE ISSUE.

A. Nine Circuit Courts Of Appeals Have Adopted The
“Equitable Mootness” Doctrine In Bankruptcy Appeals
As An Essential Means Of Furthering Important
Bankruptcy Policies.

Petitioners cannot — and do not — dispute that, as the in
banc majority recognized and the dissent did not dispute, every

17

circuit that has considered the issue has held that federal courts
may appropriately rely on equitable and prudential
considerations to dismiss bankruptcy appeals that are not
constitutionally moot but which are pending after substantial
consummation of a confirmed plan of reorganization.’ As these
courts have recognized, the “equitable mootness” doctrine
derives from “concerns unique to bankruptcy proceedings.”
Manges, 29 F.3d at 1038. See also UNR, 20 F.3d at 769-71.
Under the doctrine, “a reviewing court may decline to consider
the merits of a confirmation order when there has been
substantial consummation of the plan such that effective judicial
relief is no longer available” without imposing inequitable
adverse consequences upon “third parties who are not before
the reviewing court but who have acted in reliance upon the
plan as implemented.” Manges, 29 F.3d at 1039. Courts have
declined requests for relief which would be “effective” for the
appellant but inequitable to other parties. See, e.g., UNR, 20
F.3d at 769-71; Chateaugay I, 988 F.2d at 325; Central States,
841 F.2d at 96. The equitable component of the mootness
doctrine in bankruptcy proceedings thus reflects “a recognition
by the appellate courts that there is a point beyond which they

9. See App. 9a; Manges v. Seattle-First Nat'l Bank (In re Manges), 29
F.3d 1034, 1038-39 (Sth Cir. 1994), cert. denied, 115 S. Ct. 1105 (1995); In
re UNR Indus., Inc., 20 F.3d 766, 769-71 (7th Cir.) (accepting substantive
doctrine but rejecting phrase “equitable mootness”), cert. denied, 115 S. Ct.
509 (1994); Chateaugay Il, 10 F.3d 944, 952-53 (2d Cir. 1993); In re
Specialty Equip. Cos., 3 F.3d 1043, 1048 (7th Cir. 1993); Chateaugay I,
988 F.2d 322, 325 (2d Cir. 1993); Rochman v. Northeast Utils. Serv. Group
(In re Public Serv. Co. of N.H.), 963 F.2d 469, 471-72 (ist Cir.), cert. denied,
506 U.S. 908 (1992); First Union Real Estate Equity & Mortgage Invs. v.
Club Assocs. (in re Club Assocs.), 956 F.2d 1065, 1069-70 (11th Cir. 1992);
In re Andreuccetti, 975 F.2d 413, 418 (7th Cir. 1992); Central States
Southeast and Southwest Areas Pension Fund v. Central Transp., Inc., 841
F.2d 92, 95-96 (4th Cir. 1988); In re AOV Indus., Inc., 792 F.2d 1140, 1147
(D.C. Cir. 1986), vacated on other grounds, 797 F.2d 1004 (D.C. Cir. 1986);
Trone v. Roberts Farms, Inc. (In re Roberts Farms, Inc.), 652 F.2d 793,
796-97 (9th Cir. 1981).

18

cannot order fundamental changes in reorganization actions.”
Manges, 29 F.3d at 1039. See also UNR, 20 F.3d at 769-71.

The courts’ reliance on the mootness doctrine to avoid
disturbing successfully completed reorganizations is rooted in
“the important policy favoring finality in bankruptcy
proceedings.” Jn re Public Serv. Co., 963 F.2d at 474. See also
In re Onouli-Kona Land Co., 846 F.2d 1170, 1172 (9th Cir.
1988); In re Information Dialogues, Inc., 662 F.2d 475, 477
(8th Cir. 1981). The finality achieved by rigorous application
of the equitable mootness doctrine protects not only the interests
of the debtor and third parties in particular bankruptcy
proceedings, but, even more importantly, the strong public
interest in successful bankruptcy reorganizations. See NLRB v.
Bildisco & Bildisco, 465 U.S. 513, 527 (1984). The importance
of finality to successful reorganizations is demonstrated by
sections 363(m) and 364(m) of the Bankruptcy Code. Those
sections provide comfort to third party lenders and asset
purchasers which is essential to maximize the value of estate
assets. See United States v. Salerno, 932 F.2d 117, 123 (2d
Cir. 1991); In re Stadium Management Corp., 895 F.2d 845,
847 (Ist Cir. 1990).

As the Seventh Circuit recognized in UNR, the principle
embodied in Bankruptcy Code § 363 similarly requires that
transactions which are integral to confirmed and substantially
consummated plans of reorganization should not be upset on
appeal. See UNR, 20 F.3d at 769. Judge Easterbrook explained
that this rule is essential to attracting the new capital needed for
successful reorganizations.

{I]t is the reliance interests engendered by
the plan, coupled with the difficulty of
reversing the critical transactions, that
counsels against attempts to unwind things

19

on appeal. Every incremental risk of revision
on appeal puts a cloud over the plan of
reorganization, and derivatively over the
assets of the reorganized firm. People pay
less for assets that may be snatched back or
otherwise affected by subsequent events.
Self-protection through the adjustment of
prices may affect the viability of the
reorganization .... By protecting the interests
of persons who acquire assets in reliance on
a plan of reorganization, a court increases
the price the estate can realize ex ante, and
thus produces benefits for creditors in the

aggregate.

UNR, 20 F.3d at 770.

B. There Is No Conflict Among The Circuits As To The
Legal Standard To Be Applied In Determining Whether
A Bankruptcy Appeal Is Equitably Moot.

Petitioners rely on semantic differences in snippets of
language cropped from some appellate decisions to argue at the
end of their Petition that there is a narrow conflict in the circuits
as to the standard for evaluating mootness. See Pet. at 20. They
assert that some circuits permit equitable mootness dismissals
of bankruptcy appeals only where “effective relief” is not
available, which Petitioners argue is a narrower standard than
that articulated in other cases upholding dismissal where it is
not “‘equitable’ to grant relief.” Jd.

Petitioners’ distinction — and the purported conflict — is
illusory. The decisions cited by Petitioners make clear that in
those cases — as in this one — the court’s determination whether
it would be possible to grant “effective relief” included an

20

assessment of whether such relief would be equitable to third
parties who, like the Investors, relied on an unstayed
confirmation order. For example, in Jn re Club Assocs., supra,
the Eleventh Circuit affirmed an equitable mootness dismissal,
expressly recognizing that the mootness analysis required
inquiry into the question “[w]hat effect would granting relief
have on the interests of third parties not before the court?” —
in that case, third-party investors who had committed new funds
to the reorganized entity in substantial reliance on an unstayed
confirmation order. 956 F.2d at 1069 n.11, 1070. Similarly, in
In re AOV Indus., Inc., the D.C. Circuit emphasized “the limits
of our determination” that certain appealed claims were not
equitably moot — which included the fact that, unlike in this
case, “[all] of the parties that could be affected by these claims
were before this court.” 792 F.2d at 1149. And in Central States,
the Fourth Circuit dismissed an appeal as equitably moot where
even the narrower relief proposed would have “impose{d]
substantial adverse consequences upon . . . absent persons”
whose support of the confirmed plan was “at least partially based
upon” economic terms that would have been changed by the
proposed relief. 841 F.2d at 95, 96.

Nor do the Chateaugay cases upon which Petitioners rely
so heavily support their proposed distinction. In the most recent
such decision, Aetna Casualty & Surety Co. v. LTV Steel Co.
(In re Chateaugay Corp.) (“Chateaugay Ili”), 94 F.3d 772
(2d Cir. 1996), the Second Circuit affirmed that portion of a
district court decision “applying the factors we enumerated in
[Chateaugay IT}” to determine that appeals of bankruptcy court
orders approving a settlement were not equitably moot. /d. at
776. The affirmed district court decision expressly stated the
rule previously established in the Second Circuit’s prior
Chateaugay decisions as providing that

An appeal should also be dismissed as moot

21

when, even though effective relief could
conceivably be fashioned, implementation of
that relief would be inequitable.

Aetna Casualty & Surety Co. v. LTV Steel Co. (In re Chateaugay
Corp.), 1995 WL 386483 at *3 (S.D.N.Y. June 28, 1995),
rev'd and remanded on other grounds, 94 F.3d 772 (2d Cir.
1996). See also Chateaugay I, 988 F.2d at 325 (same);
Chateaugay II, 10 F.3d at 952-53 (to avoid mootness, appellant
must show satisfaction of all elements of a multi-factor test,
including that “appellant pursued with diligence all available
remedies to obtain a stay . . . if the failure to do so creates a
situation rendering it inequitable to reverse the orders appealed
from.”).

Indeed, the Petition itself refutes the suggestion that this
Court needs to resolve a purported narrow circuit conflict. The
language of the Petition discloses Petitioners’ recognition that
the term “effective relief” incorporates an analysis of whether
relief would be equitable — that is, effective for all concerned.
See Pet. at i, Question Presented No. 2 (suggesting that test for
equitable mootness should be whether “effective relief can be
fashioned in favor of the creditor that would not imperil the
debtor’s reorganization or upset any reasonable reliance
interest”). (Emphasis added). See also id. at 21 (characterizing
holding in Chateaugay II as having rejected LTV’s [mootness]
argument because effective relief could be fashioned without
imperiling the reorganization or upsetting any reasonable
reliance interest): (Emphasis added).

22

Il.

PETITIONERS HAVE WAIVED ANY CHALLENGE
TO THE LEGITIMACY OF THE WELL-ESTABLISHED
“EQUITABLE MOOTNESS” DOCTRINE.

Petitioners raise an argument never previously presented
in this case: that a federal court’s dismissal of a bankruptcy
appeal as equitably moot is improper because the court lacks
authority to decline to exercise statutorily authorized jurisdiction.
(Pet. at 13-15; compare App. 28a). In the courts below,
Petitioners never challenged the legitimacy of the equitable
mootness doctrine per se; to the contrary, they expressly relied
on equitable mootness cases to argue that their Appeals were
not moot. See supra, p. 11. Because the issue Petitioners now
seek to raise was not briefed in or passed on by the Third Circuit
in affirming the dismissal of Petitioners’ Appeals, this Court
should apply its traditional rule and decline to grant certiorari
to address this issue. See Holly Farms Corp. v. NLRB, 116 S.
Ct. 1396, 1402 n. 7 (1996); United States v. Williams, 112 S.
Ct. 1735, 1738 (1992).

Even if Petitioners’ waiver did not bar their challenge to
the validity per se of the “equitable mootness” doctrine, the
argument does not merit review. The rigid rule Petitioners now
belatedly propose would require the Court to overrule uniform
precedent established during the past 15 years in nine federal
circuits. Moreover, the cases cited by Petitioners in support of
their belatedly asserted theory arose, as Petitioners themselves
acknowledge, “in another context” of abstention and related
doctrines of federalism. (Pet. at 15, citing Colorado River Water
Conservation District v. United States, 424 U.S. 800 (1976);
Quackenbush v. Allstate Insurance Co., 116 S. Ct. 1712 (1996)).
Those ductrines are not implicated in bankruptcy appeals, which
are exclusively federal proceedings in which the rules and

23

principles of equity play a central role. Pepper v. Litton, 308
U.S. 295, 304 (1939).

Il.

THIS CASE DOES NOT PRESENT ANY BROAD
ISSUES OF FEDERAL BANKRUPTCY LAW OR POLICY
THAT REQUIRE RESOLUTION BY THIS COURT.

Petitioners’ remaining arguments for review involve
precisely the sorts of disputes about a lower court’s application
of established law to complex facts that this Court routinely
refuses to review. See Supreme Court Rule 10. Equitable
mootness determinations such as the one at issue here are
necessarily based “upon close consideration of the relief sought
in light of the facts of the particular case.” Central States, 841
F.2d at 96. (See also App. 20a, 25a-26a).

For that reason, there is no merit to Petitioners’
melodramatic suggestions that the decision below will introduce
uncertainty into the Chapter 11 reorganization process by giving
investors’ interests “unreviewable weight” in determining
creditors, rights, undermining existing law requiring compliance
with confirmed plans of reorganization, or permitting
bankruptcy courts to insulate their decisions from judicial
review. See Pet. at 16-17. Bankruptcy courts and parties to future
reorganization proceedings will understand that the Bankruptcy
Court decision denying Petitioners’ claims turned on the specific
requests for relief set forth in Petitioners’ motions and the
Bankruptcy Court’s factual findings concerning those claims
based on evidentiary hearings and expert testimony." They will

10. As Continental explained in its briefs in the courts below, the
Bankruptcy Court’s decision was correct not only as a matter of fact but also
as a matter of law and policy. To hold that Petitioners could recover for
alleged market value decline that occurred prior to their request to take back
the Collateral would effectively make other unsecured creditors insurers of
market risk to creditors who refused themselves to assume any of that risk.

24

further understand that the equitable mootness determination
dismissing Petitioners’ Appeals of the Bankruptcy Court orders
turned upon the specific terms of a complex plan of
reorganization and the Investment Agreement upon which the
Plan was based, Petitioners’ refusal to post any bond in support
of a stay pending appeal, and third parties’ substantial
irrevocable changes of position in reliance upon the unstayed
Confirmation Order. To the extent the rulings below have any
broader meaning, it is only to reaffirm the already well-
established proposition that appellants from bankruptcy
confirmation orders who fail diligently to seek a stay of such
orders risk dismissal of their appeals as equitably moot if the
plan of reorganization is substantially consummated, depending
upon all the facts and circumstances.

CONCLUSION
The petition for writ of certiorari should be denied.
Respectfully submitted,

RICHARD P. SCHIFTER
Counsel of Record

ANDREW T. KARRON
MICHAEL L. BERNSTEIN
KARI M. DESGALIER
ARNOLD & PORTER
Attorneys for Respondent

555 Twelfth Street, N.W.
Washington, D.C. 20004-2253
(202) 942-5000

November 27, 1996

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386018_1694%3A3. Public record. Not legal advice.