NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 29 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: KEYSTONE MINE No. 17-60013
MANAGEMENT, II,
BAP No. 15-1202
Debtor,
______________________________
MEMORANDUM*
KEYSTONE MINE COMPANY, LTD.; et
al.,
Appellants,
v.
RANDELL PARKER; et al.,
Appellees.
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Kurtz, Jury, and Martin, Bankruptcy Judges, Presiding
Submitted June 15, 2018**
San Francisco, California
Before: MURPHY,*** PAEZ, and IKUTA, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Michael R. Murphy, United States Circuit Judge for the
Appellants challenge a memorandum decision of the Ninth Circuit
Bankruptcy Appellate Panel (“BAP”) dismissing as statutorily moot their
appeals from two orders entered by the United States Bankruptcy Court for
the Eastern District of California and affirming a third order. This court
reviews BAP decisions de novo, applying the same standard of review the
BAP applied to the bankruptcy court’s ruling. Anastas v. Am. Sav. Bank (In
re Anastas), 94 F.3d 1280, 1283 (9th Cir. 1996). The bankruptcy court’s
findings of fact are reviewed for clear error. Id. Our jurisdiction arises
under 28 U.S.C. § 158(d)(1). 1
The two appeals dismissed as moot by the BAP involved an order of
the bankruptcy court approving the sale of certain mining claims and
mining-related assets owned by the bankruptcy estate (the “Sale Order”) and
an order approving bidding procedures (the “Bidding Order”). The mining
claims and other assets were sold to Bush Management Company (“Bush”),
the bankruptcy estate’s largest secured creditor and the only bidder.
U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
1
Appellees suggest the instant appeal is constitutionally moot because
the bankruptcy case is now closed. We disagree with Appellees’ suggestion
of mootness and conclude it is not appropriate to dismiss the appeal under
the constitutional mootness doctrine.
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Appellants seek to unwind the sale of the estate’s assets to Bush,
challenging both the sale and the bidding procedures—particularly the
decision to permit Bush to credit bid. As the BAP correctly determined, the
bankruptcy court’s finding that Bush was a good-faith purchaser moots
Appellants’ appeal from the entry of the Sale Order and the Bidding Order
because the sale of the bankruptcy estate’s assets was not stayed pending
appeal. 11 U.S.C. § 363(m).
Appellants mount multiple indirect challenges to the bankruptcy
court’s good-faith finding. They assert there was collusion between the
Trustee and Bush because the Trustee failed to adequately ch allenge the
validity of Bush’s loan and lien rights under Washington law and failed to
determine whether the value of Bush’s secured claims should be reduced
because of an alleged usurious interest rate. The record does not support
Appellants’ assertions. To the contrary, the bankruptcy court’s finding is
amply supported by the record. The Trustee made unchallenged
representations to the court that he “thoroughly analyzed” all potential
challenges to the validity of Bush’s secured claim, including those identified
by Appellants, but determined they were not viable. The Trustee explained
any changes in his position by informing the bankruptcy court he had
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reexamined his prior stance after he received and examined Bush’s amended
proof of claim and its accompanying documentation.
Appellants also allege Bush is not a good-faith purchaser because its
major stakeholder, John Hagestad, has a limited partnership interest in one
of the Keystone entities. They do not clearly articulate how Hagestad’s
interest undermines the bankruptcy court’s good-faith finding as to Bush,
although they complain that Hagestad set the bankruptcy proceeding in
motion by bringing a claim against the debtor in state court. Presumably,
Appellees’ theory is this was done as part of an elaborate scheme to obtain
the interests of the debtor’s largest secured creditor 2 and then wrest the
mining claims from the Keystone entities. There is no record support for
Appellants’ breach of fiduciary duty theory.
No argument presented by Appellants is persuasive. The bankruptcy
court’s finding that Bush is a good-faith purchaser under § 363(m) is
supported by the record and is not clearly erroneous. Accordingly,
Appellants have no remedy on appeal and their challenges to the Sale Order
and the Bidding Order are moot. See Onouli–Kona Land Co. v. Estate of
Richards (In re Onouli–Kona Land Co.), 846 F.2d 1170, 1173 (9th Cir.
2
Bush acquired the secured claims after the bankruptcy petition was
filed.
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1988) (holding § 363(m) statutorily limits appellate remedies if the buyer
acted in good faith).
In a final attempt to avoid application of 11 U.S.C. § 363(m),
Appellants cite this court’s opinion in Sun Valley Ranches, Inc. v. The
Equitable Life Assurance Society (In re Sun Valley Ranches, Inc. ), 823 F.2d
1373 (9th Cir. 1987), for the proposition that Appellees have failed to meet
their “heavy burden” of establishing no effective remedy is available.
Unlike the matter before this court, Sun Valley Ranches involved a
foreclosure sale of real property acquired subject to statutory rights of
redemption. Id. at 1374. Appellants have not shown the debtor has a right
of redemption and they do not challenge the BAP’s conclusion that no Ninth
Circuit, California, or Washington case indicates “a debtor has a right of
redemption following a trustee-initiated bankruptcy sale.” Neither do they
provide any argument as to why the exception set out in Sun Valley Ranches
should be extended beyond foreclosure sales. See In re Onouli–Kona Land
Co., 846 F.2d at 1174–75 (“The exception we articulated in In re Sun Valley
for real property sold to a party-creditor is only appropriate when a
foreclosure sale is subject to statutory rights of redemption.” ). For these
reasons, Appellants’ argument is unconvincing.
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As they did before the BAP, Appellants also challenge the bankruptcy
court’s order approving the compromise between Bush and the bankruptcy
estate (the “Compromise Order”). The BAP concluded Appellants’
argument was inadequately presented and, therefore, waived. The entirety
of Appellants’ opening argument focuses only on the BAP’s waiver ruling
and fails to address the substance of Appellants’ challenge to the
Compromise Order. Accordingly, we do not address the issue. Christian
Legal Soc’y v. Wu, 626 F.3d 483, 487 (9th Cir. 2010) (noting this court does
not consider matters unless they are “specifically and distinctly argued in
appellant’s opening brief,” including those that are “argued in passing” or
are “bare assertions with no supporting argument” (quotations and
alterations omitted)).
Affirmed
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