[1]     

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 1996

, [4]     

January 30, 1997

, [5]      IN RE: PAOLO GUCCI, " />

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In Re Gucci, No. 96-5138 (2d Cir. 01/30/1997)

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 1996

Docket Nos. 96-5138(L), -5142(CON), -5144(CON), -5146(CON),

1997.C02.0000049 <http://www.versuslaw.com>

January 30, 1997

IN RE: PAOLO GUCCI,

Before: NEWMAN, Chief Judge, OAKES and WINTER, Circuit Judges.

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Argued: December 3, 1996

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Decided: January 30, 1997 -3133(CON)

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Debtor.

LICENSING BY PAOLO, INC., PAOLO GUCCI DESIGN STUDIO, LTD. and TRACKWISE SALES CORPORATION and OROLOGI PAOLO, INC.,

Appellants, v.

FRANK G. SINATRA, as Trustee of the Substantively Consolidated Estates of Paolo Gucci, ET AL., GUCCIO GUCCI, S.P.A. and GUCCI AMERICA, INCORPORATED,

Appellees.

Motion for stay pending appeal and cross-motion to dismiss appeal from a judgment of the United States District Court for the Southern District of New York (Thomas P. Griesa, Chief Judge), affirming an order of the Bankruptcy Court (Jeffry H. Gallet, Bankruptcy Judge) to sell property of a debtor.

Motion for stay denied as moot; motion to dismiss appeal granted in part and denied in part.

JON O. NEWMAN, Chief Judge:

On this motion to dismiss an appeal involving a bankruptcy sale, we write to alert district judges to a major and perhaps unappreciated significance of their action, after denying a stay pending appeal, in denying even a one-day stay to permit a party to seek a stay pending appeal from the Court of Appeals. This matter arises on a motion to stay a bankruptcy sale order pending appeal and a cross-motion to dismiss the appeal as moot. The motion to dismiss presents the issue of whether and to what extent our appellate jurisdiction remains to review a bankruptcy court order for the sale of a debtor's assets when the district court has denied an application to stay the sale pending appeal and the sale has closed before the appeal is heard. We hold that pursuant to Bankruptcy Code Section(s) 363(m) we have no jurisdiction to review an unstayed sale order once the sale occurs, except on the limited issue of whether the sale was made to a good faith purchaser.

Facts

On October 15, 1996, Bankruptcy Judge Gallet entered an order authorizing the Chapter 11 trustee (the "Trustee") for the estate of Paolo Gucci et al., to sell Paolo Gucci trademark and licensing rights to appellees, Guccio Gucci, S.p.A. and Gucci America Inc. The appellants, Trackwise Sales Corporation, Licensing by Paolo, Inc. ("LBP") and Paolo Gucci Design Studio, Ltd. ("PGDS") immediately sought a stay pending appeal of Judge Gallet's order to the District Court. Judge Gallet denied the stay, but delayed the sale to afford the appellants a brief interval to seek a stay in the District Court. After initially expediting the appeal to the District Court, Chief Judge Griesa, at a hearing on November 21, 1996, affirmed Judge Gallet's sale order, and declined to stay the sale order pending further appeal to this Court, finding that the appellants had little likelihood of success on the merits. In a further ruling the same day, one that has now assumed critical importance, Chief Judge Griesa also denied even a brief stay to enable the appellants to seek from this Court a stay pending appeal.

The appellants then expeditiously moved in this Court for an emergency stay pending panel consideration of a motion for a stay pending appeal. Under our Court's usual practice, the emergency motion was treated as one-judge motion and granted by Judge Leval on November 22, 1996. However, hours before he acted, the sale was consummated by the conveyance of the assets and a wire transfer of funds. On December 3, 1996, this panel heard the appellants' motion for a stay pending appeal and the appellees' cross-motion to dismiss the appeal as moot because the sale had closed prior to the filing of Judge Leval's stay order. We continued the emergency stay to afford us a brief opportunity to consider the argued motions, reserved decision on those motions, and expedited the appeal.

The next day, we filed an order denying as moot the motion for a stay pending appeal "[s]ince the sale closing has occurred, whether or not some funds remain to be paid." Licensing by Paolo, Inc. v. Sinatra (In re Paolo Gucci)


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