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The Third Circuit, in a complicated five-year old case, avoided the merits of two groups of appeals from an order confirming the debtor’s reorganization “Plan.” In re Boy Scouts of America (BSA), 2025 WL 1377408 (3d Cir. May 13, 2025). The majority used statutory mootness, while a concurring judge would have used equitable mootness to dodge the issue of nonconsensual third-party releases in the Plan and Confirmation Order.
Two groups of claimant-appellants (A and B” sought to “reverse the Confirmation Order and vacate the Plan in its entirety.” Id., at *9. Because the Plan’s confirmation order “contains the authorization of the sale of [the debtor’s] insurance policies,” said the court’s majority, these appeals “would reverse … an authorization made pursuant to [Bankruptcy Code] §363(b),” a result barred by Code §363(m) (good-faith purchaser of property protected from reversal on appeal of sale order unless order stayed). In short, said the majority, A and B’s appeals were taken “from an authorization of the sale,” when “the purchase was made in good faith,” and when “the sale was not stayed.” Id., at *7, quoting In re Energy Future Holdings, 949 F. 3d 806, 821 (3d Cir. 2020). A and B’s appeals “would necessarily affect the sale’s validity,” requiring their appeals to be dismissed as statutorily moot.
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