Abstract
Bankruptcy reorganizations are often thought to present unique problems requiring specialized doctrines. Equitable mootness is one such doctrine. This judge-made prudential limitation on appeal rights permits reviewing courts to dismiss otherwise justiciable appeals of bankruptcy court confirmations of reorganization plans. It applies where granting relief would disrupt the implementation of the plan or would harm reliance interests of parties affected by the plan.
Chapter 11 reorganizations present complex multilateral negotiation problems. The bankruptcy represents a general default, pitting stakeholder against stakeholder in conflicts that require a global settlement. The plan of reorganization provides that global settlement through an interconnected web of compromises. Equitable mootness is justified by a need to protect those compromises against appellate challenge and, for most bankruptcy practitioners, the doctrine is viewed as necessary to protect the reorganization bargain.
This Article challenges that notion. Although equitable mootness has considerable utility, it also has a dark side. Rather than simply protect reliance of innocent parties on completed transactions, equitable mootness has become a feature of the reorganization process. It is a tool that can be wielded by powerful parties to force a reorganization bargain over the dissent of weaker parties. Seen in this light, the utility of the doctrine is likely outweighed by its ill effects.
Document Type
Article
Publication Date
2019
12-21-2022
Repository Citation
Frost, Christopher W., "Pragmatism vs. Principle: Bankruptcy Appeals and Equitable Mootness" (2019). Law Faculty Scholarly Articles. 721.
https://uknowledge.uky.edu/law_facpub/721
