BANKRUPTCY BULLETIN
Editors-in-Chief
Karl Johnson, Briggs and Morgan, P.A.
In Belew v. Rucker and The Citizen’s Bank (In re Belew), 19-6020, --BR--, 2019 WL 6204935 (8th Cir. BAP Nov. 21, 2019), the BAP held that the debtor’s appeal of a completed sale was moot and that the debtor lacked standing because he had no pecuniary interest in the sale proceeds. The Trustee agreed to sell the estate’s legal causes of action to a bank for $11,000.00. The debtor submitted a competing offer of $10,000.00 and objected to the trustee’s motion for approval of the sale to the bank. The debtor timely appealed the order approving the trustee’s sale, but did not seek stay of the sale pending appeal. In their appellate briefs, the trustee and the bank argued that the completion of the sale rendered the appeal moot. The BAP sua sponte raised the issue of whether the debtor had standing to appeal. Because § 363(m) states that the “reversal or modification on appeal of an authorization . . . of a sale” does not invalidate a sale to a good faith purchaser unless the sale was stayed pending appeal, the BAP held that the appeal was moot and that it therefore lacked jurisdiction. Furthermore, the BAP held that the debtor had no pecuniary interest in the sale because there would be no surplus funds left after the trustee distributed estate assets to the unsecured creditors who had filed more than $2.2 million of claims. Because the debtor had no pecuniary interest in the sale, he lacked standing to appeal and the BAP lacked jurisdiction on this basis as well.