Official Committee of Unsecured Creditors v. Anderson Senior Living Property, LLC

CLAY, Circuit Judge,

concurring in the judgment.

I agree with the majority opinion that the statutory mootness provision of 11 U.S.C. § 363(m) applies to this case, but I reach that result for a reason different from the majority.

The majority holds that the sale of the Official Committee of Unsecured Creditors’ (“Committee”) property occurred under § 363(b) and that § 363(h) merely sets *981out the requirements for the sale of a co-owner’s interest pursuant to § 363(b). I believe, however, that the unambiguous language of the statute indicates that the sale of the Committee’s property was pursuant to § 363(h). Section 363(h) states: “the trustee may sell both the estate’s interest, under subsection (b) or (c) of this section, and the interest of any co-owner in property in which the debtor had, at the time of the commencement of the case, an undivided interest.” This language clearly differentiates a sale of a co-owner’s property and a sale “under subsection (b) or (c).” Additionally, § 363(b) specifically refers only to “property of the estate,” making it contrary to the plain terms of the statute to find that non-debtor property could be sold pursuant to § 363(b). For these reasons, I do not agree that the non-debtors’ property interest was transferred under § 363(b).1

While I disagree with the majority’s statutory interpretation, I agree with the result. Ample case law in this and other circuits indicates that sales made pursuant to § 363(b) and other subsections are subject to the statutory mootness provision of § 363(m). Most pertinently, in Weingarten Nostat, Inc. v. Service Merchandise Co., 396 F.3d 737 (6th Cir.2005), the Court found that § 363(m) applied to a sale under both § 363(b) and § 365. The Court then cited a bevy of case law holding “that § 363(m) applies to the sale and assignment of a lease pursuant to §§ 363 and 365.” Id. (collecting cases). In Weingarten, the sale was complicated because the debtor did not directly sell the assignment of the lease. The Court found, however, that the overall agreement represented “one transaction” that led to the sale “pursuant to §§ 363(b) and 365.” Id. In this case, the debtors’ property, along with the co-owners’ interests, were sold in a single transaction. That transaction was authorized by both § 363(b) and § 363(h). Therefore, the sale was “authoriz[ed] under subsection (b) or (c) of this section.” 11 U.S.C. § 363(m).

Despite my disagreement with the majority on this issue, I fully agree that policy considerations counsel in favor of applying § 363(m) to this case and also agree with the majority’s contention that non-debtor property is protected by additional procedural safeguards, not by being excluded from the ambit of § 363(m).

For these reasons, I concur in the judgment.

. Even the debtor appears to agree that the bankruptcy court "also approved — under 363(h) — the sale of co-owner interests.” (Ap-pellee's Br. at 21).