Team R27 - St. John's University ?· Team R27 No. 16-412 IN THE SUPREME COURT OF THE UNITED STATES ...…

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  • Team R27

    Team R27 Counsel for Respondents

  • Team R27

    No. 16-412

    IN THE

    SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 2016

    _________

    IN RE PADCO, INC., Debtor

    MEGAN KUZNIEWSKI,

    Petitioner v.

    PADCO, INC. Respondent. _________

    On Writ of Certiorari

    to the United States Court of Appeals for the Thirteenth Circuit

    _________

    BRIEF FOR RESPONDENT _________

    Team R 27

    Counsel for the Respondent January 23, 2017

  • i

    QUESTIONS PRESENTED

    1. Under the Bankruptcy Code and Article III of the Constitution, can an appellate court

    dismiss an appeal of a chapter 11 confirmation order as equitably moot where prudential

    concerns weigh in favor of affording finality to the bankruptcy judgement and the relief

    sought would both threaten the debtors success and inequitably harm third parties that

    relied on the confirmation order?

    2. Under the broad authority granted in sections 105(a) and 1123(b)(6) of the Bankruptcy

    Code, does a bankruptcy court have the power to release non-consenting third parties

    from non-debtors in a chapter 11 plan when the release is necessary and appropriate to

    the successful reorganization?

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    ii

    TABLE OF CONTENTS QUESTIONS PRESENTED ............................................................................................................ i TABLE OF CONTENTS ................................................................................................................ii TABLE OF AUTHORITIES ........................................................................................................ iv OPINIONS BELOW ....................................................................................................................viii STATEMENT OF JURISDICTION............................................................................................viii STATUTORY PROVISIONS ........................................................................................................... STATEMENT OF THE CASE ........................................................................................................1 SUMMARY OF THE ARGUMENT .............................................................................................5 ARGUMENT ..................................................................................................................................7 I. THE THIRTEENTH CIRCUIT CORRECTLY HELD THAT THE DISTRICT

    COURT HAD THE AUTHORITY TO DECLINE TO HEAR AN APPEAL FROM A BANKRUPTCY COURT ORDER CONFIRMING A CHAPTER 11 PLAN ON EQUITABLE MOOTNESS GROUNDS. .......................................................................7 A. Overwhelming prudential concerns engrained in bankruptcy jurisprudence

    require the dismissal of an appeal as equitably moot. ............................................9

    B. The doctrine of equitable mootness is deeply rooted in the policies of the Bankruptcy Code. .................................................................................................... 14

    C. The doctrine of equitable mootness is not unconstitutional. ................................ 16

    II. THE THIRTEENTH CIRCUIT CORRECTLY HELD THAT NON-

    CONSENSUAL THIRD PARTY RELEASES MAY BE INCLUDED CHAPTER 11 PLANS. ........................................................................................................................... 19 A. Third party releases may be necessary and appropriate to a reorganization

    plan.. ........................................................................................................................... 20

    B. Third party releases are authorized by various sections of the Code. ................ 23

    1. Sections 105 and 1126 of the Code expressly grant broad equitable powers to the bankruptcy court to facilitate successful reorganizations. ..................................23

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    iii

    2. The bankruptcy courts power to issue third party releases is not restricted by any provision of the Code. .........................................................................................25

    CONCLUSION ............................................................................................................................. 28 APPENDIX A ............................................................................................................................... 29 APPENDIX B ............................................................................................................................... 30 APPENDIX C ............................................................................................................................... 31 APPENDIX D ............................................................................................................................... 32 APPENDIX E ............................................................................................................................... 33 APPENDIX F ............................................................................................................................... 34 APPENDIX G ............................................................................................................................... 35

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    iv

    TABLE OF AUTHORITIES

    UNITED STATES SUPREME COURT CASES

    Celotex Corp. v. Edwards, 514 U.S. 300 (1995) .................................................................................................................24

    Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 821 S. Ct. 1236 (1976) ..................................................................................... 12

    Commodity Futures Trading Com v. Schor, 478 U.S. 833, 850 (1986) ........................................................................................................ 18

    Fair Assessment in Real Estate Assn., Inc. v. McNary, 454 U.S. 100, 120 (1981) ........................................................................................................ 13

    Lexmark Int'l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) ................................................................................................ ........... 12

    Local Loan Co. v. Hunt, 292 U.S. 234, 240 (1934) ........................................................................................................ 13

    Marrama v. Citizens Bank, 549 U.S. 365, 375 (2007) ........................................................................................................ 10

    Pepper v. Litton, 308 U.S. 295 (1939) ................................................................................................................ 23

    Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd., 507 U.S. 380, 389 (1993) ........................................................................................................ 13

    Quackenbush v Allstate Ins Co, 517 U.S. 706, 717 (1996) ........................................................................................................ 13

    Sprint Communs., Inc. v. Jacobs, 134 S. Ct. 584, 586 (2013) ...................................................................................................... 12

    Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334, 2347, (2014) ................................................................................................. 12

    Stern v. Marshall, 564 U.S. 462, 131 S. Ct. 2594 (2011) ..................................................................................... 17

    United States v. Energy Resources Co., Inc., 495 U.S. 545 (1990) .......................................................................................................... 23, 24

    United States v. Little Lake Misere Land Co., Inc., 412 U.S. 580, 593 (1973) ........................................................................................................ 16

    Vision-Park Properties, LLC v. Seaside Eng'g & Surveying, LLC, 136 S. Ct. 109 (2015) .............................................................................................................. 19

    Young v. United States, 535 U.S. 43, 50 (2002) ............................................................................................................ 13

    Zivotofsky v. Clinton, 566 U.S. 189 (2012) ................................................................................................................ 12

    UNITED STATES COURT OF APPEALS CASES

    Behrmann v. Nat'l Heritage Found.,

    663 F.3d 704 (4th Cir. 2011) .................................................................................................. 20

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    v

    Boston & Maine Corp. v. Chicago Pacific Corp., 785 F.2d 562 (7th Cir. 1986) ....................................................................................................7

    In re A.H. Robins Co., Inc., 880 F.2d 694 (4th Cir. 1989) ...................................................................................... 19, 21, 26

    In re Airadigm Commc'ns, Inc., 519 F.3d 640 (7th Cir. 2008) .......................................................................... 19, 21, 22, 24, 26

    In re Am. Hardwoods, Inc., 885 F.2d 621 (9th Cir. 1989) .................................................................................................. 25

    In re AOV Indus., Inc., 792 F.2d 1140, 1147-48, 253 U.S. App. D.C. 186 (D.C. Cir. 1986) ..................................9, 13

    In re Bodenheimer, Jones, Szwak, & Winchell LLP, 592 F.3d 664, 668 (5th Cir. 2009) ............................................................................................9

    In re Charter Commc'ns, Inc., 691 F.3d 476, 481 (2d Cir. 2012)..............................................................................................8

    In re Chateaugay Corp., 988 F.2d 322, 325 (2d Cir. 1993)..............................................................................................8

    In re Club Assocs., 956 F.2d 1065, 1069 (11th Cir. 1992) .................................................................................... 10

    In re Contl Airlines, 91 F.3d 553 (3d Cir. 1996)................................................................................8, 11, 12, 16, 19

    In re Dow Corning Corp., 280 F.3d 648 (6th Cir. 2002) ................................................................................ 19, 20, 24, 25

    In re Healthco Int'l, Inc., 136 F.3d 45, 48 (1st Cir. 1998) .................................................................................................8

    In re Ingersoll, Inc., 562 F.3d 856 (7th Cir. 2009) .................................................................................................. 20

    In re Iowa R.R., 840 F.2d 535 (7th Cir. 1988) ....................................................................................................7

    In re Kaiser Aluminum Corp., 456 F.3d 328, 339 (3d Cir. 2006)............................................................................................ 10

    In re Lett, 632 F.3d 1216, 1225-26 (11th Cir. 2011) .................................................................................9

    In re Metromedia Fiber Network, Inc., 416 F.3d 136 (2d Cir. 2005)........................................................................................ 19, 20, 27

    In re Pac. Lumber Co., 584 F.3d 229, 240 (5th Cir. 2009) ......................................................................................8, 14

    In re Paige, 584 F.3d 1327, 1337 (10th Cir. 2009) ......................................................................................8

    In re President Casinos, Inc., 409 F. App'x 31, 31-32 (8th Cir. 2010) ....................................................................................8

    In re Seaside Eng'g & Surveying, Inc., 780 F.3d 1070 (11th Cir. 2015) .............................................................................................. 19

    In re Specialty Equip. Co., 3 F.3d 1043 (7th Cir.1993) ..................................................................................................... 25

    In re Thorpe Insulation Co., 677 F.3d 869, 880 (9th Cir. 2012) ............................................................................................8

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    vi

    In re United Producers, Inc., 526 F.3d 942, 947 (6th Cir. 2008) ............................................................................................8

    In re UNR Indus., 20 F.3d 766, 770 (7th Cir. 1994) ................................................................................ 8, 11, 15

    In re U.S. Airways Grp., Inc., 369 F.3d 806, 809 (4th Cir. 2004) ....................................................................................8

    In re Winshall Settlor's Trust, 758 F.2d 1136 (6th Cir.1985) ................................................................................................. 24

    Mac Panel Co. v. Va. Panel Corp., 283 F.3d 622, 625 (4th Cir. 2002) .......................................................................................... 10

    Monarch Life Ins. Co. v. Ropes & Gray, 65 F.3d 973 (1st Cir. 1995) ..................................................................................................... 19

    Nordhoff Investments, Inc. v. Zenith Elecs. Corp., 258 F.3d 180, 185 (3d Cir. 2001)............................................................................................ 13

    Ochadleus v. City of Detroit (In re City of Detroit), 838 F.3d 792, 798 (6th Cir. 2016) ......................................................................................8, 13

    Official Comm.of Unsecured Creditors of Cybergenics Corp.ex rel. Cybergenics Corp. v. Chinery,

    330 F.3d 548 (3d Cir. 2003).................................................................................................... 25 Republic Supply Co. v. Shoaf,

    815 F.2d 1046, 1050 (5th Cir.1987) ....................................................................................... 26 Samson Energy Res. Co. v. SemCrude, L.P. (In re SemCrude, L.P.),

    728 F.3d 314, 317-18 (3d Cir. 2013) ................................................................................ 16, 18 Stamp v. Insurance Co. of North America,

    908 F.2d 1375 (7th Cir. 1990) ..................................................................................................7 Tribune Media Co. v. Aurelius Capital Mgmt., L.P.,

    799 F.3d 272, 281 (3d Cir. 2015)..................................................... 7, 8, 11, 12, 14, 17, 18, 26 United Sav. Ass'n v. Timbers of Inwood Forest Assocs., Ltd. (In re Timbers of Inwood Forest Assocs., Ltd.),

    808 F.2d 363 (5th Cir.1987) ................................................................................................... 27 Weingarten Nostat, Inc. v. Serv. Merch. Co.,

    396 F.3d 737 (6th Cir. 2005) .................................................................................................. 15

    UNITED STATES BANKRUPTCY COURT CASES

    In re City of Detroit, 524 B.R. 147 (Bankr. E.D. Mich. 2014) ........

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