Only the U.S. Trustee objected.Bankruptcy Court DecisionThe Court found the Plan had been “substantially consummated” pursuant to section 1101(2) of the Bankruptcy Code and could no longer be modified. Section 1193(b) of the Bankruptcy Code only permits modification of a confirmed consensual plan before “substantial consummation”, which Section 1101(2) defines as “(A) transfer of all or substantially all of the property proposed by the plan to be transferred; (B) assumption by the debtor […] under the plan of the business or of the management of all or substantially all of the property dealt with by the plan; and (C) commencement of distribution under the plan.”

In chapter 11 cases, substantial consummation, defined in §1101(2), occurs shortly after the effective date of the plan when the initial distributions have been commenced to unsecured creditors.53See 11 U.S.C. §1101(2) (2019). Even the debtor has an incentive for the plan to be contested in order to stretch out administrative expenses over the life of the plan.

her granting the relief requested in the appeal will (a) fatally scramble the plan and/or (b) significantly harm third parties who have justifiably relied on plan confirmation"); Search Market Direct, Inc. v. Jubber (In re Paige), 584 F.3d 1327, 1339 (10th Cir. 2009) (applying a six-factor test, including the likely impact upon a successful reorganization of the debtor if the appellant's challenge is successful); In re United Producers, Inc., 526 F.3d 942, 947–48 (6th Cir. 2008) (three-factor test); TNB Fin., Inc. v. James F. Parker Interests (In re Grimland, Inc.), 243 F.3d 228, 231 (5th Cir. 2001) (considering "(1) whether the complaining party has failed to obtain a stay, (2) whether the plan (here, the liquidation) has been substantially consummated, and (3) whether the relief requested would affect the rights of parties not before the court or the success of the plan").A common element of almost all of these tests is whether the chapter 11 plan has been substantially consummated. Section 1101(2) of the Bankruptcy Code provides that "substantial consummation" of a chapter 11 plan occurs when substantially all property transfers proposed by the plan have been completed, the debtor or its successor has assumed control of the business and property dealt with by the plan, and plan distributions have commenced.Does Equitable Mootness Apply in Chapter 7 Cases?The doctrine of equitable mootness has generally been applied to bar appeals in complex chapter 11 reorganization cases, in keeping with its underlying purpose in preventing disruption to confirmed and substantially consummated chapter 11 plans involving agreements entered into with the debtor by third parties in reliance on the finality of the debtor's emergence from bankruptcy and continued operation. See generally Collier on Bankruptcy ¶ 1129.09[3][a] (16th ed. 2023) (citing and discussing cases).Some courts, however, have ruled that the doctrine of equitable mootness applies in chapter 7 cases, even though the rationales warranting its applicatio

rch Market Direct, Inc. v. Jubber (In re Paige), 584 F.3d 1327, 1339 (10th Cir. 2009) (applying a six-factor test, including the likely impact upon a successful reorganization of the debtor if the appellant's challenge is successful); In re United Producers, Inc., 526 F.3d 942, 947–48 (6th Cir. 2008) (three-factor test); TNB Fin., Inc. v. James F. Parker Interests (In re Grimland, Inc.), 243 F.3d 228, 231 (5th Cir. 2001) (same); see also In re Fin. Oversight & Mgmt. Bd. for Puerto Rico, 2021 WL 438891, **6-7 (1st Cir. Feb. 8, 2021) (holding that the doctrine of equitable mootness was not abrogated by the U.S. Supreme Court's ruling in Mission Product Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019), and that the doctrine applied to dismiss an appeal of an order approving a plan in a proceeding under the Puerto Rico Oversight, Management, and Economic Stability Act).A common element of almost all of these tests is whether the chapter 11 plan has been substantially consummated. Section 1101(2) of the Bankruptcy Code provides that "substantial consummation" of a chapter 11 plan occurs when substantially all property transfers proposed by the plan have been completed, the debtor or its successor has assumed control of the debtor's business and property, and plan distributions have commenced.Equitable Mootness as a Bar to Appellate Review of Exculpation Provisions?In Pacific Lumber, the Fifth Circuit held that the doctrine of equitable mootness did not preclude appellate review of an unstayed order confirming a substantially consummated chapter 11 plan that contained third-party releases and exculpation clauses. In so ruling, the Fifth Circuit stated as follows:In short, the goal of finality sought in equitable mootness analysis does not outweigh a court's duty to protect the integrity of the process. We see little equitable about protecting the released non-debtors from negligence suits arising out of the reorganization. In a variety of contexts, this court has held that Section 524(e) only release

Section 11(a)(3) of the Bankruptcy Act provided the court could: “Appoint, upon the application of parties in interest, receivers or the marshals to take charge of the property of bankrupts and to protect the interests of creditors after the filing of the petition and until it is dismissed or the trustee is qualified...”The procedures adopted by the Bankruptcy Code changed this, as alluded to in the legislative history city by the Seventh Circuit in Memorial Estates. Under the Code, a trustee is automatically appointed when a Chapter7 case is filed and, unlike under the prior Act, in Chapter11 debtors remain in possession of their assets unless the court appoints a trustee (11 U.S.C. §1101). Given these new procedures, there was no longer a need to appoint a receiver for the case and the prohibition was put into § 105(b) to prevent, as the Seventh Circuit states, circumventing the new procedure.As indicated, the prohibition in §105(b) is on appointing a receiver “in a case under this title.”

Bankruptcy Perjury Not Cause for DeportationOn April 16, 2012, the Third Circuit Court of Appeals reversed a Jamaican immigrant’s deportation order even though he pled guilty to making a false statement under penalty of perjury in a chapter 11 bankruptcy case. The panel concluded in Singh v. Attorney General of the United Sates, No, 11-988, 2012 WL 1255061 (3d Cir. Apr. 16, 2012), that because he never actually possessed funds being held by an informant for the Port Authority of New York and New Jersey in connection with his construction business bankruptcy, he could not be found to be an aggravated felon under 11 U.S.C. section 1101 (a)(43)(M)(i) and be deported. This statute makes it a deportable aggravated felony if an alien causes an actual loss to a victim in excess of $10,000.