Harbinger Motors, Inc. v. Jeoffrey L. Burtch, as Chapter 7 Trustee for the Bankruptcy Estate of Canoo, Inc., et al.

Summary

The United States District Court for the District of Delaware affirmed the Bankruptcy Court’s order approving the sale of Canoo, Inc.’s assets under an asset purchase agreement. The court held that 11 U.S.C. § 363(m) did not bar review because effective relief could potentially be fashioned without invalidating the sale. It further held that the Chapter 7 trustee properly negotiated and obtained approval of an agreement requiring mutual consent to settle litigation involving Harbinger Motors, Inc.

Holdings

1. Section 363(m) did not bar review because it was at least feasible to fashion relief concerning the challenged settlement-consent provision without affecting the validity of the completed sale.
2. The Bankruptcy Court properly approved the asset purchase agreement, including the provision requiring mutual consent to settlement of the Harbinger Matter.

Questions Presented

1. Whether 11 U.S.C. § 363(m) barred appellate review because the sale was not stayed and the buyer was deemed a good-faith purchaser.
2. Whether the Bankruptcy Court properly approved an asset purchase agreement requiring the Chapter 7 trustee and buyer to mutually consent to any settlement of estate-owned litigation.
3. Whether the mutual-consent provision impermissibly delegated the trustee's fiduciary duty to monetize estate assets and settle litigation in the best interests of the estate and its creditors.

Disposition

affirmed