The Third Circuit Affirms the Breadth of Bankruptcy Code Section 363(m)
Section 363(m) of the Bankruptcy Code moots appeals of sale orders if a reversal of the order would “affect the validity of the sale.” 11 U.S.C. § 363(m). The Third Circuit previously stated that this would include any appeal challenging a “central element” of the sale order subject to the appeal. See Pittsburgh Food & Beverage v. Ranallo, 112 F.3d 645 (3d Cir. 1997). In a recent case, the Third Circuit made explicit that a term in an asset purchase agreement transferring proceeds of estate causes of action to a trust in favor of the purchaser was a “central element” of the sale transaction and hold that an appeal seeking to eliminate the trust from the asset purchase agreement was barred as moot by Section 363(m). Boeing Co. v. Alabama Aircraft Industries, Inc., Appeal No. 12-1290, December 12, 2012.