Judge Andrew Carter
Borders Bookstores sought Chapter 11 protection in 2011. It ultimately closed all stores and liquidated its assets. In September 2011 Border’s records reflected some 17.7 million outstanding gift cards with unredeemed balances of $210.5 million. The cards lack information allowing Borders to identify their purchaser or recipient, nor did Borders maintain a database matching card information with information identifying cardholders’ names or addresses. Appellants gift card holders were unknown creditors not entitled to actual notice of an April 8, 2011, bar date. Bankruptcy courtwhich acknowledged Borders’ distribution plan on Dec. 21, 2011denied them leave to file untimely proofs of claim. District court deemed appellants’ appeals moot. They did not satisfy the fourth and fifth factors in Frito-Lay v. LTV Steel (In re Chateaugay Corp.), known as Chateaugay II. Appellants did not establish that unsecured creditors received notice of the appellate proceedings as they were entitled to. Nor did they pursue their claims "with all diligence." Among other things, they did not seek reconsideration of the distribution plan’s confirmation nor did they appeal the confirmation order or seek stay of the plan’s effective date.
