Summary
The Eighth Circuit Bankruptcy Appellate Panel dismissed Richard N. Berkshire's appeal as statutorily moot under 11 U.S.C. § 363(m). The court held that the bankruptcy sale had been completed without a stay pending appeal, and therefore the sale could not be overturned or modified.
Topics
Practice areas
Questions Presented
- Whether Berkshire established circumstances warranting permission to file his response to the motion to dismiss one week late.
- Whether the completed bankruptcy sale was statutorily moot under 11 U.S.C. § 363(m) because Berkshire failed to obtain a stay pending appeal.
Holdings
- The motion to allow filing out of time was denied because Berkshire did not demonstrate circumstances supporting an extension of the response deadline; the late-filed response and the trustee's reply were not considered.
- The appeal was statutorily moot under 11 U.S.C. § 363(m) because the authorized sale was completed without Berkshire obtaining a stay pending appeal, and the appeal was therefore dismissed.
Key quotations
“The Eighth Circuit Court of Appeals refers to 11 U.S.C. § 363(m) as the “finality rule” which “protects the reasonable expectations of good faith third-party purchasers by preventing the overturning of a completed sale, absent a stay, and it safeguards the finality of the bankruptcy sale.”” (at 2)
“The failure to obtain a stay of the authorized sale made the appeal “statutorily moot under § 363(m)” and “reversing or modifying the authorization to sell would affect the validity of the sale[.]”” (at 2)
““[A] sale in a bankruptcy case is not ‘subject to modification by an appellate court unless the appellant receives a stay pending appeal.’”” (at 2)
“We see no reason to distinguish Appellant’s appeal from the long-standing Eighth Circuit case law holding an appeal moot because a debtor failed to obtain a stay of a sale and the sale has been completed, as recently addressed by this Court.” (at 3)
Factual background
The bankruptcy court authorized the sale of disputed real property free and clear of liens on December 29, 2025. Berkshire appealed, but neither the bankruptcy court docket nor the appellate record showed that he obtained a stay pending appeal before the trustee reported that the sale closed on January 16, 2026. Berkshire did not timely respond to the trustee's motion to dismiss and attributed the late filing to a mistaken belief about the response deadline.
Procedural history
The United States Bankruptcy Court for the District of Nebraska entered the Sale Order on December 29, 2025. Berkshire filed a notice of appeal on January 12, 2026, but the sale closed on January 16, 2026, without a stay pending appeal. The trustee moved to dismiss, and Berkshire filed an untimely response and a motion to permit filing out of time. The Bankruptcy Appellate Panel denied the motion to file out of time, did not consider the late response or the trustee's reply, granted the motion to dismiss, and dismissed the appeal as statutorily moot.