Over time, equitable mootness, a court-created doctrine, had been consistently applied and embraced by appellate courts.1 The doctrine, as it has been applied, provides that appeals from orders confirming Chapter 11 plans will be considered moot—and thus not subject to appellate review—if (1) a plan has been substantially consummated and (2) granting appellate relief would unravel the plan or be inequitable to third parties relying on the order confirming the plan. Based on and consistent with decisions such as the decision of the U.S. Court of Appeals for the Second Circuit in In re Chateaugay2 and the decision of the Third Circuit in In re Continental Airlines,3 the equitable mootness doctrine has been read broadly to create a presumption that if a plan has been substantially consummated, appeals of the confirmation order are equitably moot.
In recent weeks, three separate appellate court decisions, one by the Ninth Circuit in Grasslawn Lodging v. Transwest Resort Props. (In re Transwest Resort Props.)4 and two by the Third Circuit in One2One Communs. v. Quad/Graphics,5 and Tribune Media Company v. Aurelius Capital Management,6 highlight that there are differences among the circuit courts with respect to the appropriateness of the equitable mootness doctrine and the presumption of its application. In reasoning and result, these decisions challenge the doctrine and call into question the doctrine’s continued existence. By reason of these decisions, for parties in interest and for practitioners, consideration of whether to consummate a Chapter 11 plan while an appeal of the confirmation order is pending should and must be reevaluated.
