In a rare appellate per curiam decision, the U.S. Court of Appeals for the Fifth Circuit denied a writ of mandamus seeking a stay pending appeal, yet addresses the “unnecessary and likely incorrect” interpretation of the relationship between §§ 363 and 365 of the Bankruptcy Code by the district court and the bankruptcy court. In re Royal Street Bistro, L.L.C., No. 22-39966 (5th Cir. Feb 16, 2022). The panel addressed what it viewed as the substantive errors of the bankruptcy court and the district court. Perhaps it did so because the underlying appeal is unlikely to give rise to a substantive review because a sale under §363 of the Bankruptcy Code generally enjoys statutory mootness on appeal.

The opinion suggests that the correct result may have been reached but for the wrong rationale. The decision is important because it rejects the approach taken in other circuits and potentially elevates the state law rights of non-debtor tenants. It is unusual to get appellate guidance in these circumstances as well.

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