United States Court of Appeals For the Seventh Circuit
Bankruptcy – appeal — stay
A party seeking to appeal a bankruptcy order that real property be sold must obtain a stay of the order before seeking appeal.
“Given the statutory guarantee of finality that § 363(m) provides, ‘we have repeatedly held that when a party challenges the bankruptcy court’s order approving the sale of estate property to a good faith purchaser, it must obtain a stay of that order pending appeal, lest the sale proceed and the appeal become moot.’ In re CGI Indus., 27 F.3d 296, 299 (7th Cir. 1994) (collecting cases). A case must be declared moot where ‘there is no possible relief which the court could order that would benefit the party seeking it.’ In re Envirodyne Indus., 29 F.3d 301, 303 (7th Cir. 1994) (citation omitted).”
“So even if Mr. Schwab were correct that the bankruptcy court should not have stripped away his interest in Joffco Square (which we do not decide), § 363(m) prevents us from resurrecting that interest in the real estate itself. As below, Mr. Schwab does not contest Inland’s status as a good-faith purchaser, which is the sole ground § 363(m) provides for modifying the terms of a sale completed in the absence of a stay. See In re Sax, 796 F.2d at 997-98 (finding appeal moot where no stay was entered pending appeal that alleged that bankruptcy court improperly authorized the sale of property that was not even part of the bankruptcy estate); In re Gucci, 105 F.3d 837, 839 (2d Cir. 1997) (‘Our appellate jurisdiction over an unstayed sale order issued by a bankruptcy court is statutorily limited to the narrow issue of whether the property was sold to a good faith purchaser.’ (citations omitted)).”
Appeal from the United States District Court for the Northern District of Illinois, Bucklo, J., Magnus-Stinson, J.