Document Type
Research Memorandum
Publication Date
2024
Abstract
(Excerpt)
Under section 363(b) of title 11 of the United States Code ("the Bankruptcy Code"), the trustee "may use, sell, or lease, other than in the ordinary course of business, property of the estate." Under section 363(m), once a transfer of property has been authorized, the "reversal or modification on appeal of an authorization under subsection (b) . . . of a sale or lease of property does not affect the validity of a sale or lease . . . unless such authorization and such sale or lease were stayed pending appeal."
Until recently, various circuit courts were split on whether section 363(m) amounted to a jurisdictional constraint on appellate review of property transfers under 363(b) regarding property that had already left the bankruptcy estate. In MOAC Mall Holdings LLC v. Transform Holdco LLC, the Supreme Court of the United States held that section 363(m) is not a jurisdictional limitation on appellate courts and thus does not deprive them of the power to adjudicate appeals of orders entered under section 363(b).
This memorandum will analyze why 363(m) is not a jurisdictional limitation on appellate courts reviewing transfers of property authorized pursuant to 363(b). Specifically, it will address three reasons why section 363(m) does not fall into the "clear-statement" rule courts use to determine whether a statutory provision is jurisdictional.