                                                           FILED
                                                            DEC 17 2014
 1                          NOT FOR PUBLICATION
 2                                                      SUSAN M. SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
                                                          OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No. NC-13-1299-PaJuKu
                                   )
 6   THE ZUERCHER TRUST OF 1999,   )       Bankr. No. 12-32747-HLB
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     THE ZUERCHER TRUST OF 1999,   )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       M E M O R A N D U M1
11                                 )
     PETER S. KRAVITZ, Chapter 11 )
12   Trustee; WIN WIN ALEXANDRIA   )
     UNION, LLC,                   )
13                                 )
                    Appellees.     )
14   ______________________________)
15                  Argued and Submitted on October 23, 2014,
                               at San Francisco, CA
16
                            Filed - December 17, 2014
17
              Appeal from the United States Bankruptcy Court
18                for the Northern District of California
19     Honorable Hannah L. Blumenstiel, Bankruptcy Judge, Presiding
20
     Appearances:      Bradley Kass of Kass & Kass Law Offices argued for
21                     appellant The Zuercher Trust of 1999; Reagan
                       Elizabeth Boyce of Ezra Brutkus Gubner LLP argued
22                     for appellee Peter S. Kravitz; Elsa Horowitz of
                       Wolf, Rifkin, Shapiro, Schulman & Rabkin, LLP
23                     argued for appellee Win Win Alexander Union, LLC.
24
     Before: PAPPAS, JURY, and KURTZ, Bankruptcy Judges.
25
26        1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.
 1        Chapter 112 debtor The Zuercher Trust of 1999 (“Debtor”)
 2   appeals the order of the bankruptcy court approving the trustee’s
 3   sale of two real properties under § 363.     We conclude that the
 4   bankruptcy court did not err in finding in the sale order that
 5   creditor Win Win Alexandria Union, LLC (“Win Win”) at the time of
 6   the sale order was a good faith purchaser for purposes of
 7   § 363(m).   However, consistent with our precedent, we must REMAND
 8   this matter to the bankruptcy court to decide whether it should
 9   reconsider its good faith finding based upon events and facts
10   occurring after entry of the sale order.
11                                  I. FACTS
12                             A.    Background
13        Debtor, a business trust, owns and develops real estate in
14   California.   Its managing member is Monica Hujazi (“Hujazi”).      At
15   issue in this appeal is the bankruptcy court’s approval of the
16   sale of two Los Angeles properties owned by Debtor, one located
17   on Alexandria Avenue (the “Alexandria Property”), and the other
18   on Union Avenue (the “Union Property” and, together, the
19   “Properties”).
20        On June 24, 2005, East West Bank loaned $4,250,000 to Debtor
21   and co-borrower Hujazi (the “Alexandria Note”) secured by a deed
22   of trust against the Alexandria Property.     The same day, East
23   West Bank loaned Debtor and Hujazi $2,254,000 (the “Union Note”)
24
25
          2
            Unless otherwise indicated, all chapter and section
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101–1532, all
27   Rule references are to the Federal Rules of Bankruptcy Procedure,
     Rules 1001–9037, and all Civil Rule references are to the Federal
28   Rules of Civil Procedure 1–86.

                                       -2-
 1   secured by a deed of trust against the Union Property.
 2        Debtors operated the Properties as apartment complexes.     On
 3   November 15, 2010, Debtor and Hujazi defaulted under the terms of
 4   the Alexandria and Union Notes by failing to pay the amounts due.
 5   In February of 2011, East West Bank assigned the Notes and the
 6   trust deeds securing them to Win Win.    By that time, the
 7   Properties had been placed involuntarily into the Rent Escrow
 8   Account Program (“REAP”) by the Los Angeles Housing Department.
 9   See L.A., CAL. HOUSING CODE § 162.00 et seq.   REAP is an
10   enforcement tool used to ensure that landlords adequately
11   maintain rental properties and to bring improperly maintained
12   properties with building and safety code violations into
13   compliance.   While a property is enrolled in REAP, rents from
14   tenants are not paid to the landlord/owner but, instead, into a
15   city trust fund.
16        Win Win filed a complaint in state court for, inter alia,
17   judicial foreclosure of the trust deeds on the Properties and the
18   appointment of a receiver, alleging that, in addition to the
19   default on its loan obligations, Debtor was not taking the
20   necessary steps to maintain the Properties and that there was a
21   need to remedy building and safety code violations in order to
22   remove the Properties from the REAP program.     Win Win Alexandria
23   Union, LLC v. Hujazi, case no. BC 456257 (Los Angeles Super. Ct.
24   March 1, 2011).    After a contested hearing, on March 16, 2011,
25   the state court granted Win Win’s request to appoint a receiver
26   and entered an order appointing Kevin Singer (“Receiver”).    Win
27   Win was ordered by the state court to pay all costs of the
28   receivership as well as the costs of the required repairs and

                                      -3-
 1   corrections to bring the Properties into compliance so they could
 2   be removed from REAP.    Win Win alleges that, since March 1, 2011,
 3   it has advanced all fees and costs associated with the
 4   receivership and with the rehabilitation of the Properties.     On
 5   July 26, 2012, the Alexandria Property was released from REAP;
 6   the Union Property was released from REAP in March 2013.
 7        On September 24, 2012, the state court denied Debtor’s
 8   request for a stay of the foreclosure proceedings.     The
 9   Alexandria Property, now out of REAP, was scheduled for a deed of
10   trust sale to occur on September 26, 2012.
11                           B.   The Bankruptcy Case
12        Debtor filed a petition under chapter 11 of the Bankruptcy
13   Code the day of the trustee’s sale.      At that time, approximately
14   $7,459,000 was owed on the Alexandria Note and $5,595,000 on the
15   Union Note.
16        On October 5, 2012, Win Win filed a motion in the bankruptcy
17   court for relief from the automatic stay to continue with its
18   foreclosures, arguing that the Alexandria and Union Properties
19   were over-encumbered; Win Win also sought dismissal of the
20   bankruptcy case.    In support of its motion, Win Win provided an
21   accounting of amounts owed under the Notes together with the
22   amounts it had paid to the Receiver and to obtain appraisals of
23   the Properties.    According to a declaration of appraiser
24   D. Michael Mason, he valued the Alexandria Property at
25   approximately $5,300,000 and the Union Property at approximately
26   $3,300,000, demonstrating that Debtor lacked equity in both
27   Properties.
28        Also on October 5, Win Win moved for an order to excuse the

                                        -4-
 1   Receiver’s compliance with § 543(d) to turn over the Properties
 2   to Debtor and to allow the Receiver to retain control of them.
 3   Debtors opposed the motions, arguing that Win Win had inflated
 4   the amounts owed under the Notes, that the alleged values for the
 5   Properties were too low, and that Debtor should be allowed to
 6   recover and rehabilitate the Properties under its reorganization
 7   plan which proposed to remodel and convert them to assisted
 8   living facilities.
 9        The bankruptcy court conducted a hearing on the Win Win
10   motions on November 27, 2012.   After hearing from the parties,
11   the court ruled that Debtor had “grossly mismanaged” the
12   Properties by allowing them to be placed in REAP and then taking
13   no action to cure the violations.     The court ordered that the
14   Receiver need not turn over the Properties to Debtor pending
15   further order.   In connection with the stay relief motion, as to
16   Debtor’s proposal to convert the Properties into assisted living
17   facilities, the court found that Debtor’s proposed plan did not
18   appear feasible in light of its lack of the required capital,
19   inability to obtain funding, and Debtor’s proposed lack of debt
20   repayment to Win Win during the refinance/renovation period.       The
21   court continued the stay relief hearing and directed Debtor to
22   submit certified appraisals for each property if it wished to
23   contest the appraisals offered by Win Win.
24        On January 10, 2013, the United States Trustee filed a
25   motion to appoint a chapter 11 trustee in the bankruptcy case
26   because Debtor was not meeting its fiduciary obligations, had
27   incomplete schedules, and had grossly mismanaged the bankruptcy
28   estate.   At a status conference and continued stay relief hearing

                                     -5-
 1   on September 14, 2013, the bankruptcy court granted the
 2   U.S. Trustee’s request and indicated that, upon appointment, the
 3   chapter 11 trustee would have thirty days to investigate and
 4   report to the court whether it should grant relief from stay or
 5   whether the trustee should proceed with a sale of the Properties.
 6   Acting on the court’s order, the U.S. Trustee appointed Peter S.
 7   Kravitz chapter 11 trustee (“Trustee”) on January 31, 2013.3
 8   § 1104(d).
 9                    C.    The Sale of the Properties
10        Trustee submitted his report to the bankruptcy court on
11   February 14, 2013.    Trustee’s investigation included, among
12   others, obtaining two brokers opinions on the value of the
13   Properties, as well as a review of Win Win’s certified
14   appraisals, a request to Debtor to provide the details for its
15   plan for capitalizing its proposed conversion of the Properties.
16   In his report, Trustee noted that Debtor had not provided any
17   certified appraisals, did not submit a plan for capitalization of
18   the conversion to assisted living units, and that brokers who
19   were contacted by Trustee at Debtor’s request would not submit
20   offers for the Properties for various reasons and, in particular,
21   because the Properties were not ADA compliant.      The report
22   concluded, based on the Win Win appraisals, the brokers’ opinions
23   obtained by Trustee, and other information available to him,
24   “that, as the Properties stand today, there is no equity
25   available to the estate . . . [and that] Debtor has not responded
26
27        3
            The order directing appointment of a trustee was not
28   appealed.

                                      -6-
 1   to the Trustee’s request for a viable plan that will provide a
 2   feasible means to effect conversion for [Debtor’s proposed
 3   uses.]”   Trustee noted that, while the bankruptcy court could
 4   grant Win Win stay relief so that it could foreclose, such would
 5   provide no benefit to the estate.     Rather than lose the
 6   Properties to foreclosure, Trustee opined that a sale of the
 7   Properties could provide some benefit to all concerned, if
 8   additional concessions could be obtained from Win Win.
 9        On March 28, 2013, with Win Win’s support, Trustee filed a
10   “Motion for Entry of an Order: (a) Approving Sale Procedures and
11   Bid Protections; and (b) Scheduling an Auction and Hearing to
12   Approve the Sale.”   Debtor promptly objected to any sale of the
13   Properties, contending that Trustee’s sale prices were too low
14   and his figures regarding the debt on the Properties were
15   inflated.   After a contested hearing on April 11, 2013, the
16   bankruptcy court, on April 25, 2013, entered an “Order Setting
17   Sale and Bid Procedures” (the “Procedures Order”).     The salient
18   portions of that order provided that: (A) The Properties would be
19   sold at auction free and clear of all liens, claims, and
20   encumbrances; (B) Win Win would submit opening credit bids of
21   $4,500,000 for the Alexandria Property and $2,700,000 for the
22   Union Property, and could thereafter offer additional credit bids
23   up to $8,000,000 for the Alexandria Property, and $7,100,000 for
24   the Union Property; (C) All auction bidders must submit a
25   “qualified bid,” which required that a bid be made no later than
26   one week before the auction, at least $150,000 above the minimum
27   bids for each of the Properties, be accompanied by a deposit of
28   $250,000 for each bid, and provide readily verifiable proof of

                                     -7-
 1   funds for the full amount of the bids; (D) The highest offer at
 2   auction will be the final sale price, subject to bankruptcy court
 3   approval; (E) If the successful bidder is a party other than Win
 4   Win, and the successful bid is less than Win Win’s total secured
 5   claim on either Property, Win Win will release its liens on both
 6   Properties; and (F) Win Win would pay Trustee $50,000 for each
 7   Property, which deposit would be nonrefundable unless Win Win was
 8   the successful bidder for the full value of its claim on that
 9   Property.
10        On May 2, 2013, Trustee filed a “Motion for Entry of an
11   Order Authorizing and Approving the Sale of the Properties” (the
12   “Sale Motion”).    The Sale Motion generally incorporated the terms
13   of the Procedures Order and provided additional information on
14   the purported administrative claims of Win Win, and specified
15   that if the motion was approved, regardless of who was the
16   successful bidder at the auction, Win Win would agree to cap its
17   administrative claims at $50,000.
18        On May 30, 2013, the hearing on the Win Win stay relief
19   motion and the Sale Motion was held, which was followed by the
20   auction.    Because it intended to approve a sale of the
21   Properties, the bankruptcy court deemed the Win Win motion for
22   stay relief or dismissal as moot.      The court granted the Sale
23   Motion:
24        I find the [Trustee’s proposed] sale to be in the
          estate’s best interests, given the savings of
25        litigation costs, [and] the waiver of satisfaction of
          substantial claims against the estate that would result
26        from the sale. I further find that the trustee’s
          efforts to market the properties was sufficient, given
27        the length of time the properties have been on the
          market, the estate’s resources, and the simple fact
28        that these properties are property of a bankruptcy

                                      -8-
 1        estate.
 2   Hr’g Tr. 30:12-20.
 3        The bankruptcy judge then left the courtroom, whereupon the
 4   Trustee conducted the auction.   There were no offers other than
 5   the Win Win opening offer of $2,700,000 for the Union Property.
 6   However, Jonathan Barach, president of Vista Investment Group,
 7   LLC (“Vista”), submitted a qualified bid of $6,800,000 for the
 8   Alexandria Property, the only bid in excess of the Win Win offer.
 9        After the auction concluded, the bankruptcy judge returned
10   to the courtroom and, after hearing from the parties, directed
11   Trustee to prepare an order approving the sales, which order
12   should recite its conclusions that the successful bidders were
13   good faith purchasers for purposes of § 363(m), that the sale was
14   free and clear of all liens, claims, and encumbrances, and that
15   the usual fourteen-day stay of the order under Rule 6004(h) would
16   be waived.
17        The bankruptcy court entered the order approving the sale on
18   June 10, 2013 (the “Sale Order”).      The Sale Order provided, in
19   relevant part:
20        3.   The Trustee is authorized to sell and transfer to
               Win Win . . . the Union Property[.]
21
          4.   [Vista] is confirmed as the successful bidder for
22             the Alexandria Property. The Trustee is
               authorized to sell and transfer to Vista or its
23             designee the Alexandria Property [for]
               $6,800,000[.]
24
          5.   Win Win is confirmed as the backup purchaser of
25             the Alexandria Property in the event that the sale
               of the Alexandria Property to Vista fails to
26             close. In such event, Win Win or its designee is
               confirmed as the purchaser, and the Trustee is
27             authorized to sell and transfer to Win Win the
               Alexandria Property [for] $4,500,000.
28

                                      -9-
 1        7.    Win Win and Vista are deemed to be good faith
                purchasers as that term is used in and for the
 2              purposes of 11 U.S.C. § 363(m).
 3        9.    Pursuant to 11 U.S.C. § 363(f), effective upon
                closing, the sale of each and both of the
 4              Properties will vest in the respective purchaser
                all right, title and interest of the Debtor and
 5              the bankruptcy estate in the Properties free and
                clear of all liens, claims, encumbrances or
 6              interests[.]
 7        12.   This order shall be effective upon its entry, and
                any stay provided by application of Bankruptcy
 8              Rule 6004(h) is waived.
 9        13.   Win Win may not assert an administrative claim in
                the Case for more than $50,000.
10
11        Debtor filed a timely notice of appeal of the Sale Order on
12   June 21, 2013.   Debtor did not seek a stay pending appeal from
13   either the bankruptcy court or this Panel.
14                         D.   Subsequent Events
15        The parties strenuously dispute the facts and events
16   following the entry, and Debtor’s appeal, of the Sale Order.
17   Because these contentions appear in their appellate pleadings, we
18   acknowledge them here as assertions, but not for their truth.
19        The parties agree that Trustee was apparently unable to
20   complete the sale of the Alexandria Property to Vista, ostensibly
21   because a tax lien and other issues rendered Trustee unable to
22   obtain insurable title for Vista.      As a result, Trustee did not
23   close the sale with Vista and, instead, completed the sale of the
24   Alexandria Property to Win Win as the backup purchaser under the
25   Sale Order.
26        At some time before July 30, 2013, Win Win apparently sold
27   the Alexandria Property to Alex Court Apartments, LLC (“Alex
28   Court”), which is alleged to be a subsidiary and “designee” of

                                     -10-
 1   Vista, for $6,800,000, the same price as under the Sale Order,
 2   and Win Win agreed to pay certain costs and assume the risks
 3   related to this appeal.   On July 30, 2013, the Sale Order and
 4   grant deeds transferring ownership of both Properties to Win Win
 5   free and clear of all liens, claims, interests and encumbrances,
 6   were recorded.   The same day, a grant deed transferring the
 7   Alexandria Property from Win Win to Alex Court was recorded.
 8        On August 12, 2013, Trustee filed a motion with this Panel
 9   to dismiss this appeal as moot.     Debtor opposed the motion.   A
10   motions panel ruled that “All relief requested in [Win Win’s]
11   motion to dismiss is hereby ORDERED DENIED.     The appeal is not
12   moot at this time.”
13                             II. JURISDICTION
14        The bankruptcy court had jurisdiction under 28 U.S.C.
15   §§ 1334 and 157(b)(2)(N).   The Panel has jurisdiction under
16   28 U.S.C. § 158.
17                               III. ISSUES
18        Whether this appeal is equitably moot.
19        Whether the bankruptcy court clearly erred in finding the
20   sales were to good faith purchasers for purposes of § 363(m).
21        Whether the bankruptcy court abused its discretion in
22   approving the sale of the Properties under § 363(b).4
23
24        4
            By listing this issue, we acknowledge that Debtor raised
25   it in this appeal. However, because the Sale Order included a
     § 363(m) finding as to the purchasers, as an appellate court we
26   are precluded from reviewing any issues other than the "good
27   faith" of the purchasers. Ferrari N. Am., Inc. v. Sims
     (In re R.B.B., Inc.), 211 F.3d 475, 478-80 (9th Cir. 2000); see
28                                                      (continued...)

                                       -11-
 1                         IV. STANDARDS OF REVIEW
 2        Mootness is a question of law reviewed de novo.   Nelson v.
 3   George Wong Pension Trust (In re Nelson), 391 B.R. 437, 442 (9th
 4   Cir. BAP 2008).
 5        A bankruptcy court’s determination of whether a purchaser of
 6   property acted in good faith under § 363(m) is a finding of fact
 7   reviewed for clear error.   Thomas v. Namba (In re Thomas),
 8   287 B.R. 782, 785 (9th Cir. BAP 2002).   A finding of fact is
 9   clearly erroneous if it is illogical, implausible, or without
10   support from evidence in the record.   United States v. Hinkson,
11   585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).
12        A bankruptcy court’s decision to approve a sale of estate
13   property under § 363 is reviewed for abuse of discretion.     Moldo
14   v. Clark (In re Clark), 266 B.R. 163, 168 (9th Cir. BAP 2001).
15   In determining whether the bankruptcy court abused its discretion
16   we first determine de novo whether the trial court identified the
17   correct legal rule to apply to the relief requested and, if so,
18   we then determine whether the bankruptcy court’s application of
19   that standard was “(1) illogical, (2) implausible, or (3) without
20   support in inferences that may be drawn from the facts in the
21   record.”   United States v. Loew, 593 F.3d 1136, 1139 (9th Cir.
22   2010).
23
24
          4
25         (...continued)
     also In re River-W. Plaza Chicago, LLC, 664 F.3d 668, 672 (7th
26   Cir. 2011) ("Our appellate jurisdiction over an unstayed sale
27   order issued by a bankruptcy court is statutorily limited to the
     narrow issue of whether the property was sold to a good faith
28   purchaser.").

                                     -12-
 1                               V. DISCUSSION
 2        A.   This appeal is not equitably moot.
 3                                   1.
 4        Win Win argues that this appeal is equitably moot because
 5   Debtor did not seek a stay pending appeal and Win Win would be
 6   financially harmed by a reversal of the Sale Order.    We disagree.
 7        Equitable mootness prevents an appellate court from reaching
 8   the merits when appellants have "‘failed and neglected diligently
 9   to pursue their available remedies to obtain a stay'" and changes
10   in circumstances "‘render it inequitable to consider the merits
11   of the appeal.'"    Darby v. Zimmerman (In re Popp), 323 B.R. 260,
12   271 (9th Cir. BAP 2005) (quoting Focus Media, Inc. v. Nat'l
13   Broad. Co., Inc. (In re Focus Media, Inc.), 378 F.3d   916, 923
14   (9th Cir. 2004)).   In other words, equitable principles may
15   require dismissal of the appeal when the appellant neglects to
16   obtain a stay pending appeal and the rights of third parties
17   intervene.   Spirtos v. Moreno (In re Spirtos), 992 F.2d 1004,
18   1006 (9th Cir. 1993); In re Popp, 323 B.R. at 271.
19        The party asserting equitable mootness must demonstrate that
20   the case involves transactions "so complex or difficult to
21   unwind" that equitable mootness applies.    Lowenschuss v. Selnick
22   (In re Lowenschuss), 170 F.3d 923, 933 (9th Cir. 1999).   The
23   Ninth Circuit recently provided additional guidelines for our
24   inquiry into equitable mootness:
25        We endorse a test similar to those framed by the
          circuits that have expressed a standard: We will look
26        first at whether a stay was sought, for absent that a
          party has not fully pursued its rights. If a stay was
27        sought and not gained, we then will look to whether
          substantial consummation of the plan has occurred.
28        Next, we will look to the effect a remedy may have on

                                      -13-
 1        third parties not before the court. Finally, we will
          look at whether the bankruptcy court can fashion
 2        effective and equitable relief without completely
          knocking the props out from under the plan and thereby
 3        creating an uncontrollable situation for the bankruptcy
          court.
 4
 5   Motor Vehicle Cas. Co. v. Thorpe Insulation Ins. Co. (In re
 6   Thorpe Insulation Ins. Co.), 677 F.3d 869, 881 (9th Cir. 2012).
 7        Win Win argues that this appeal is equitably moot because:
 8   (1) Debtor failed to obtain, or even request, a stay of the Sale
 9   Order pending appeal; (2) in reliance on the Sale Order, Win Win
10   subsequently sold the Alexandria Property to a Vista subsidiary,
11   a third party; and (3) reversal of the Sale Order at this time
12   would be detrimental to Win Win and Vista.
13        Win Win is correct that Debtor failed to request or obtain a
14   stay pending appeal.   The Thorpe Insulation court expresses
15   considerable concern about cases in which an appellant fails to
16   "pursue with diligence all available remedies to obtain a stay of
17   execution of the objectionable order."   In re Thorpe Insulation
18   Ins. Co., 677 F.3d at 881.   More recent cases from the Ninth
19   Circuit have explained the equitable mootness rules discussed in
20   Thorpe Insulation, and in particular the consequences of an
21   appellant’s failure to seek a stay pending appeal.   Rev Op Grp.
22   v. ML Manager (In re Mortgages Ltd.), 771 F.3d 1211 (9th Cir.
23   2014) (all cites below are to this opinion as "In re Mortgages,
24   Ltd.” at <page>); Rev Op Grp. v. ML Manager (In re Mortgages
25   Ltd.), 771 F.3d 623 (9th Cir. 2014); Rev Op Grp. v. ML Manager
26   (In re Mortgages Ltd.), ___ Fed. Appx. ___, 2014 WL 5840462 (9th
27   Cir. 2014).
28        Reviewing the history of Ninth Circuit and BAP decisions

                                     -14-
 1   discussing an appellant's failure to seek a stay and equitable
 2   mootness, the In re Mortgages, Ltd. court cited to Trone v.
 3   Roberts Farms, Inc. (In re Roberts Farms, Inc.), 652 F.2d 793
 4   (9th Cir. 1981): "It is obligatory upon appellant . . . to pursue
 5   with diligence all available remedies to obtain a stay of
 6   execution of the objectionable order . . . if failure to do so
 7   creates a situation rendering it inequitable to reverse the
 8   orders appealed from."   Id. at 798 (quoted in In re Mortgages,
 9   Ltd., at 1215).   Commenting on Roberts Farms and Thorpe
10   Insulation, the In re Mortgages, Ltd. court observed: "While we
11   recognized in Thorpe that an appeal should not be automatically
12   dismissed for failure to obtain a stay, we reiterated our warning
13   from Roberts Farms that an appellant must seek a stay.
14   Otherwise, we stated the appellant has by definition ‘not fully
15   pursued its rights,' [quoting Thorpe Insulation, 677 F.3d at 881]
16   and thus the appeal is subject to dismissal."    In re Mortgages,
17   Ltd., at 1216.    Based upon the rules articulated in Roberts Farms
18   and repeated in Thorpe Insulation, the In re Mortgages, Ltd.
19   court reasoned that failure to seek a stay pending appeal, at
20   least without an adequate excuse, requires dismissal of an
21   appeal.   "This is a clear bright-line rule that all litigants can
22   understand."   In re Mortgages, Ltd., at 1217.
23        Here, not only did Debtor not seek a stay pending appeal,
24   but also rather than offer an acceptable excuse for not doing so,
25   it made the troubling assumption that it was under no obligation
26   to do so because the bankruptcy court allegedly erred in its good
27   faith finding in the Sale Order and, thus, § 363(m) would not
28   apply.    Debtor seemingly did not contemplate that its failure to

                                      -15-
 1   seek a stay might raise equitable mootness problems.
 2        But while Debtor did not seek a stay pending appeal, and
 3   provided no good excuse for its failure to do so, under the case
 4   law our inquiry does not end there.    The rule discussed in
 5   In re Mortgages, Ltd. is subject to the same condition explained
 6   in Roberts Farms, Inc., Lowenschuss, and Thorpe Insulation, that
 7   there must also be some subsequent event that would render
 8   consideration of the issues on appeal inequitable, and thereby
 9   trigger an equitable mootness analysis.    In re Robert Farms,
10   Inc., 652 F.2d at 798 ("Appellants have failed and neglected
11   diligently to pursue their available remedies to obtain a stay of
12   the objectionable orders of the Bankruptcy Court and have
13   permitted such a comprehensive change of circumstances to occur
14   as to render it inequitable for this court to consider the merits
15   of the appeal."); Lowenschuss v. Selnick (In re Lowenschuss),
16   170 F.3d 923, 933 (9th Cir. 1989) ("a claim is not equitably moot
17   because th[e] case does not present transactions that are so
18   complex or difficult to unwind that the doctrine of equitable
19   mootness would apply"); In re Thorpe Insulation Co., Inc.,
20   677 F.3d at 883 ("most importantly, we look to whether the
21   bankruptcy court on remand may be able to devise an equitable
22   remedy.").   Indeed, the In re Mortgages, Ltd. court observed that
23   "[a] party can move to dismiss an appeal as equitably moot if
24   ‘great changes in the status quo occurred after the district
25   court rendered the orders appealed from[.]'" In re Mortgages,
26   Ltd., at 1214 (quoting Algeran, Inc. v. Advance Ross Corp.,
27   759 F.2d 1421, 1423 (9th Cir.1985)).
28        In sum, while in this appeal Debtor did not seek a stay of

                                     -16-
 1   the Sale Order pending appeal and has provided no satisfactory
 2   explanation for the failure to do so, to complete our equitable
 3   mootness analysis we must consider whether Debtor's failure to
 4   seek a stay "creates a situation rendering it inequitable to
 5   reverse the orders appealed from."       In re Mortgages, Ltd., at
 6   1216, (quoting In re Roberts Farms, Inc., 652 F.2d. at 798).         We
 7   conclude that equity does not require that this appeal be
 8   dismissed.
 9        Here, relying upon the Sale Order, Trustee sold the
10   Alexandria Property to Win Win, and Win Win almost immediately
11   resold it to Vista's subsidiary.       There is case law to support
12   the argument that a sale of property to a third party may moot an
13   appeal because it precludes effective relief.       Baker & Drake v.
14   Pub. Serv. Comm'n of Nev. (In re Baker & Drake), 35 F.3d 1348,
15   1351 (9th Cir. 1994).   And in its analysis of the equitable
16   mootness doctrine in bankruptcy cases, Thorpe Insulation
17   expresses concern for third parties whose rights may be impacted
18   on appeal but who are not "before the court."       677 F.3d at 881.
19   But in this case, it is not at all clear that Vista (or its
20   designee, Alex Court) is the sort of "third party" entitled to
21   benefit from the equitable mootness doctrine.       Vista was approved
22   as a bidder in the Sale Order and its chief executive appeared
23   before the bankruptcy court and submitted the bid.       Vista has
24   also participated in this appeal by filing a declaration in
25   support of Win Win's appellate brief.       In short, in our view,
26   Win Win, Vista, and its subsidiary are "before the court" both in
27   the bankruptcy court and in this appeal.
28        Another critical question is whether reversal of the Sale

                                     -17-
 1   Order involves transactions "so complex or difficult to unwind"
 2   that equitable mootness applies.        In re Lowenschuss, 170 F.3d at
 3   933.    Surprisingly, we think this question is answered by Win Win
 4   in its appellate brief.    According to Win Win, it entered into an
 5   agreement with Vista which specifies the consequences and
 6   respective rights and responsibilities of those parties if the
 7   Sale Order were to be unwound by this Panel:
 8          Win Win and [Vista] agreed that if the Sale Order is
            reversed: Win Win must return [] the entire $6,800,000
 9          plus interest at 10% per annum; the portion of the
            purchase not used to pay off the existing loan Win Win
10          secured in connection with the purchase of the
            Properties is [to] be held in escrow pending resolution
11          of the appeal; [Vista] shall not be reimbursed for any
            improvements or liable for completion of any
12          improvements at the Alexandria Property[;] however if
            required by the Trustee, Win Win is responsible to
13          return the Alexandria Property to its pre-possession
            condition; and [Vista] is to retain all rental income
14          received during its ownership.
15   Win Win Br. at 12-13.
16          In light of the parties' contract, none of the transactions
17   involved in this appeal are "so complex or difficult to unwind"
18   that equitable mootness would prevent our reversal of the Sale
19   Order.    Indeed, Win Win and Vista bargained for these
20   transactions in anticipation of a possible reversal of the Sale
21   Order in this Panel.
22          Although Debtor's decision to forego any effort to obtain a
23   stay pending appeal was a risky one, we conclude that, even now,
24   the Sale Order could be effectively unwound without inequity.
25   This appeal is not equitably moot.
26                                    2.
27          Additionally, Debtor argues that the mootness of this appeal
28   has already been “fully adjudicated” because the motions panel

                                      -18-
 1   denied Trustee’s motion to dismiss.    Debtor’s Reply Br. at 12.
 2   Because of this, Debtor has apparently declined to address Win
 3   Win’s argument that our review of the Sale Order is prohibited
 4   based on the bankruptcy court’s § 363(m) finding and the fact
 5   that Debtor did not obtain a stay of the sales pending appeal.
 6        Debtor was mistaken to have forfeited its opportunity to
 7   address the merits of the § 363(m) issue.    In this circuit, a
 8   merits panel is always free to review the decisions made in an
 9   appeal by a motions panel.   See United States v. Houser, 804 F.2d
10   565, 567 (9th Cir. 1986); In re Crystal Sands Props., 84 B.R. 665
11   (9th Cir. BAP 1988).   Moreover, contrary to Debtor’s position,
12   the motions panel did not “fully adjudicate” the question of
13   mootness; instead, the motions panel denied the motion to dismiss
14   because the “appeal is not moot at this time."    In employing this
15   language in its order, the motions panel implicitly acknowledged
16   that the mootness issue may be revisited by this Panel.    We have
17   done so above.
18        B.   The bankruptcy court did not clearly err in determining
               that Win Win was a good faith purchaser in the Sale
19             Order.
20                                   1.
21        We first address a preliminary matter.    Debtor requests in
22   its reply brief that the Panel strike four volumes of Trustee’s
23   excerpts of record because Trustee failed to designate them
24   within the fourteen day period required by Rule 8006.5    Debtor
25
26        5
            The Federal Rules of Bankruptcy Procedure were modified
27   effective December 1, 2014. This discussion refers to the Rules
     which were in effect at the time this appeal was filed. Rule
28                                                      (continued...)

                                     -19-
 1   Reply Br. at 1.   But we are also mindful of the provision in Rule
 2   8001(a) which instructs that:
 3        An appellant’s failure to take any step other than
          timely filing a notice of appeal does not affect the
 4        validity of the appeal, but is ground for only such
          action as the district court or bankruptcy appellate
 5        panel deems appropriate[.]
 6        Debtor has given us no reason, other than the Rule 8006 time
 7   requirement for designating the record on appeal, for rejecting
 8   the “supplemental” documents offered by Trustee in the four
 9   volumes.   With a few minor exceptions that do not affect our
10   analysis, these are all documents appearing in the docket of the
11   bankruptcy court, and known to the bankruptcy court at the time
12   of entry of the Sale Order.   We therefore exercise our discretion
13   and have considered Trustee’s supplementary excerpts.6
14                                   2.
15        There is also a misconception in Debtor’s arguments in this
16
17
          5
           (...continued)
18   8006 was modified and renumbered as Rule 8009 and Rule 8001 was
19   modified and renumbered as Rule 8003 as of December 1, 2014. The
     salient provisions of each rule remain unchanged.
20
          6
            Debtor also requests that we strike two declarations filed
21   by the President of Vista and the Managing Member of Win Win, and
22   attached to Win Win’s appellate brief, relating to the actions of
     those purchasers after entry of the Sale Order. To the extent
23   that these declarations attempt to explain disputed facts, such
     as the reason why Trustee did not complete the sale of the
24
     Alexandria Property to Vista, the Panel will not try to resolve
25   those disputes. However, to the extent that the declarations
     discuss undisputed facts, such as the existence and terms of the
26   agreement between Vista and Win Win to take certain actions in
27   the event this Panel overturns the Sale Order, we considered
     those facts in our discussion of equitable mootness in the
28   Jurisdiction section above.

                                     -20-
 1   appeal which we must dispel.   Several times in its appellate

 2   briefs Debtor argues that “[t]he burden of proof is on the

 3   proponent of good faith, i.e., the Appellee [Trustee and Win Win]

 4   herein.”   For support, Debtor cites to this Panel’s opinion in

 5   T.C. Investors v. Joseph (In re M Capital Corp.), 290 B.R. 743,

 6   747 (9th Cir. BAP 2003) (“the proponent of section 363(m) good

 7   faith has the burden of proof.”).      However, the Ninth Circuit

 8   explicitly rejected the BAP’s In re M Capital Corp. holding

 9   concerning the burden of proof on good faith under § 363(m)

10   because, according to the court, it was inconsistent with Ninth

11   Circuit precedent.7   Weinstein, Eisen & Weiss, LLP v. Gill

12   (In re Cooper Commons, LLP), 424 F.3d 963, 970 (9th Cir. 2005).

13   In Cooper Commons, the court noted that, as explained in

14   In re Adams Apple, 829 F.2d 1484, 1489 (9th Cir. 1987), in

15   connection with a sale to a creditor under § 363(m),8 “we presume

16   the [creditor’s] good faith and then inquire to see whether the

17
18
19        7
            In Fitzgerald v. Nunn Worx SR, Inc. (In re Fitzgerald),
20   428 B.R. 872, 880-81 (9th Cir. BAP 2010), the BAP relied on
     In re M Capital Corp. in ruling against the proponent of good
21
     faith. In that case, however, the ruling was that the proponent
22   had not prayed for a good faith finding and the court made no
     good faith determination at all, and thus it was not a question
23   of the shifting burden of proof.
24        8
            In Cooper Commons, the court acknowledged that, in
25   In re Adams Apple, the court examined good faith under § 364(e),
     while the M Capital Corp. BAP panel was reviewing a buyer’s good
26   faith under §363(m). In re Cooper Commons, LLP, 424 F.3d at 970.
27   The Cooper Commons court noted that there was no difference in
     the determination of good faith under those statutes. Id. at 970
28   n.2.

                                     -21-
 1   presumption can be overcome.”   Id. at 969-70.9
 2        Under the facts of this case, however, we do not find it
 3   necessary to reconcile In re M Capital with In re Adams Apple.
 4   Under In re Adams Apple, Win Win is presumptively a good faith
 5   purchaser; as discussed below, consistent with In re M Capital,
 6   Trustee has presented good and sufficient evidence that Win Win
 7   was a good faith purchaser at the time of the Sale Order.   Thus,
 8   a burden of proof analysis in this case is unnecessary.
 9                                   3.
10        Debtor argues that the bankruptcy court failed to make
11   adequate findings of fact regarding the good faith of purchaser
12   Win Win in connection with entry of the Sale Order.   We disagree
13   and conclude the court’s findings satisfy the requirements of the
14   statute and case law.
15        Section 363(m) provides that:
16        The reversal or modification on appeal of an
          authorization under subsection (b) or (c) of this
17        section of a sale or lease of property does not affect
          the validity of a sale or lease under such
18        authorization to an entity that purchased or leased
          such property in good faith, whether or not such entity
19        knew of the pendency of the appeal, unless such
          authorization and such sale or lease were stayed
20        pending appeal.
21        Under § 363(m), the first requirement of a "good faith"
22   purchaser is that there be an identifiable purchaser.
23   In re R.B.B., Inc., 211 F.3d at 478-80.   That element is
24   satisfied in this case; it is not disputed that Win Win was
25   clearly identified as a potential purchaser in connection with
26
27        9
            The BAP decision in In re M Capital Corp. did not
28   acknowledge this presumption.

                                     -22-
 1   both sales.
 2        A second requirement for good faith under § 363(m) is that
 3   all parties have adequate notice of the sale.     United States v.
 4   Moberg Trucking Co. (In re Moberg Trucking Co.), 112 B.R. 362,
 5   366 (9th Cir. BAP 1990).    Here, all parties in interest received
 6   ample notice of the hearings held to approve the Bid Procedures
 7   and the Sale Motions and of the sale itself.
 8        The Bankruptcy Code does not provide a definition of a good
 9   faith purchaser under § 363(m).     Beyond the requirements
10   identified above, the Ninth Circuit has traditionally held that
11   “a good faith purchaser is one who buys ‘in good faith’ and ‘for
12   value.’”    In re Ewell, 958 F.2d. 276, 281 (9th Cir. 1992) (citing
13   In re Abbotts Dairies of Pa., Inc., 788 F.2d 143, 147 (3d Cir.
14   1986)).    Good faith under § 363(m), in turn, is defined
15   negatively, that is, “a lack of good faith is shown by ‘fraud,
16   collusion between the purchaser and other bidders or the trustee,
17   or an attempt to take grossly unfair advantage of other
18   bidders.’”    Community Thrift & Loan v. Suchy (In re Suchy),
19   786 F.2d 900, 902 (9th Cir. 1985).
20        Therefore, in addition to requirements that there was
21   adequate notice of the sale and bidding procedures and that the
22   winning bidder was identifiable, the criteria for a good faith
23   purchaser under § 363(m) are that the winning bid provided value
24   to the estate and the winning bidder did not engage in fraud,
25   collusion, or attempt to take unfair advantage of other bidders.
26        In this case, the bankruptcy court made a finding that Win
27   Win’s bid, which in addition to its secured credit bid offered to
28   pay cash to the estate, along with its willingness to limit the

                                       -23-
 1   amount of any potential administrative expense claims,
 2   represented considerable value to the creditors of the bankruptcy
 3   estate:
 4        I find the sale to be in the estate’s best interests,
          given the savings of litigation costs [and] the waiver
 5        of satisfaction of substantial claims against the
          estate that would result from the sale.
 6
 7   Hr’g Tr. 30:11-15, May 30, 2013.
 8        The bankruptcy court also noted that the “only evidence of
 9   the [Alexandria Property’s] value before the court is an
10   appraisal prepared by Win Win which reflects the value of the
11   property at $5.3 million.”   Hr’g Tr. 31:10-12.        Similarly, the
12   only formal appraisal of the Union Property was also the Win Win
13   appraisal of $3,300,000.   Of course, the bankruptcy court had
14   indicated that Debtor could challenge the accuracy of the Win Win
15   appraisals through submission of its own appraisals.         Hr’g
16   Tr. 33:12-13, November 27, 2012.          Debtor informed the bankruptcy
17   court that it would need forty-five days to prepare the
18   appraisals.   Hr’g Tr. 33:20-23.     While it was afforded time to do
19   so, Debtor never submitted any appraisal for either property, nor
20   did it ever provide an explanation for its failure to comply with
21   the bankruptcy court’s instructions if it intended to dispute the
22   value of the Properties.
23        Appraisals can assist the bankruptcy court in determining
24   the good faith of a proposed purchaser.         While the Ninth Circuit
25   has not done so expressly, four other circuits have held that a
26   purchaser who pays at least 75 percent of the appraised value of
27   a property has purchased for value.         Kabro Assocs., LLC v. Colony
28   Hill Associates (In re Colony Hill Associates), 111 F.3d 269, 276

                                        -24-
 1   (2d Cir. 1997) (“Courts have held that a purchaser who pays ‘75%
 2   of the appraised value of the assets’ has tendered value, as that
 3   term is used for purposes of § 363(m).”); In re Abbotts Dairies
 4   of Pennsylvania, Inc., 788 F.2d at 149; In re Bel Air Assocs.,
 5   Ltd., 706 F.2d 301, 305 n.12 (10th Cir. 1983); In re Rock Indus.
 6   Mach. Corp., 572 F.2d 1195, 1197 n.1 (7th Cir. 1978).    Here, the
 7   minimum credit bids to be made by Win Win at the sales,
 8   $4,500,000 for the Alexandria Property, and $2,700,000 for the
 9   Union Property, were more than 80% of the appraised values of the
10   Properties.   In other words, on this record, the bankruptcy court
11   had an ample basis to conclude that Win Win’s minimum credit
12   bids, together with its other concessions, would yield sales of
13   benefit and value to the estate.
14        Additionally, the bankruptcy court had evidence in the
15   record that the tenants’ association for the Properties was
16   preparing litigation against the Receiver, Win Win, and Debtor as
17   a result of the various code violations that resulted in the REAP
18   placement.    Further, the bankruptcy court had voluminous records
19   from Trustee and Receiver relating to the significant
20   postpetition expenses incurred and paid by Win Win for the
21   maintenance and rehabilitation of the Properties.   Debtor
22   objected in the bankruptcy case, and in this appeal, that these
23   costs were inflated, and that the bankruptcy court had not
24   formally decided that Win Win’s expenditures would be allowed as
25   administrative claims.   Of course, allowance of any
26   administrative claims would require bankruptcy court review,
27   giving Debtor the additional opportunity to object.    However,
28   Debtor never submitted any argument or evidence that any specific

                                      -25-
 1   items in the billings submitted by Win Win were excessive.
 2   Moreover, it cannot reasonably be disputed that substantial
 3   expenses were continuing to be incurred as a result of the
 4   estate’s ownership of the Properties.     Avoiding accruing expenses
 5   was therefore an additional benefit to a prompt sale of the
 6   Properties.
 7        Finally, it is important to note that an auction occurred.
 8   No parties other than Vista submitted bids in excess of the Win
 9   Win bid on the Alexandria Property and there were no bids besides
10   Win Win’s minimum bid for the Union Property.     The absence of any
11   other interested bidders was also evidence that Win Win’s offers
12   were made in good faith.
13                                   4.
14        In contesting the bankruptcy court’s good faith finding,
15   Debtor makes two arguments.   The first is that Trustee
16   “unilaterally decided” not to complete the sale as authorized by
17   the Sale Order to Vista, and instead “allowed his preferred
18   purchaser” (i.e., Win Win) to acquire the Alexandria Property “by
19   default.”   Debtor’s Op. Br. at 12.    In Debtor’s opinion, the
20   later sale of the Alexandria Property by Win Win to a Vista
21   subsidiary within weeks of entry of the Sale Order on the same
22   terms Vista originally bid renders the entire sale process
23   inherently suspicious.   We examine the import of this argument in
24   the next section.
25        Debtor’s second argument is that, at the time of the entry
26   of the Sale Order, “as a further indication of fraud, collusion
27   and unfair advantage . . . the Trustee and/or his counsel
28   thwarted attempts by prospective third party purchasers from

                                     -26-
 1   making any bids on the property or engaging in the bankruptcy
 2   process.”   Debtor’s Op. Br. at 14.      Debtor’s allegations were
 3   discussed in the bankruptcy court at length at the hearings on
 4   the Bid Motion and Sale Motion.
 5        In opposition to this suggestion, Trustee represented that
 6   he, or his office staff, had responded to every request for
 7   information and to view the Properties made to him, including
 8   ten-to-fifteen referrals from Debtor.       He also noted that access
 9   to the Properties was controlled by the Receiver as authorized by
10   the bankruptcy court and Trustee should not be blamed for the
11   difficulties some parties may have encountered accessing the
12   Properties.
13        Before the auction took place, the bankruptcy court
14   admonished Debtor's counsel for engaging in "gamesmanship,"
15   specifically, by providing a bid from Gangi Development of
16   $9,800,000 for the Alexandria Property the night before the
17   auction, and objecting at the last minute to Trustee's marketing
18   efforts on the Properties.   Nevertheless, the court recessed to
19   allow the parties and the court to examine the late-filed bid.
20   The court concluded the bid was inappropriate because it did not
21   conform to the Procedures Order: the offered deposit of $100,000
22   was less than the required deposit of $250,000; the bid was
23   untimely filed on May 30, 2013, whereas the Procedures Order
24   required submission no later than May 23, 2013; and the
25   submission included no proof that the bidder had readily
26   available funds to complete a sale.
27        Fairly viewed, Debtor’s argument on appeal that Trustee
28   allegedly discouraged bids is a continuation of its position in

                                       -27-
 1   the bankruptcy court that Trustee failed to properly market the
 2   Properties.    Despite the various allegations of Debtor, the court
 3   found that Trustee had properly marketed the Properties:
 4        I further find that the trustee’s efforts to market the
          Union Street and Alexandria Avenue Properties was
 5        sufficient, given the length of time the properties
          have been on the market, the estate’s resources, and
 6        the simple fact that these properties are property of a
          bankruptcy debtor.
 7
 8   Hr’g Tr. 30:16-20.    Here, the bankruptcy court had been presented
 9   with two views of the evidence, one that Trustee had failed to
10   market the Properties by discouraging bidding, and one that
11   Trustee had not discouraged bidding but actively responded to
12   inquiries.    Where there are two views of the evidence, the
13   bankruptcy court’s choice between them cannot be clearly
14   erroneous.    Lehtinen v. Lehtinen (In re Lehtinen), 332 B.R. 404,
15   411 (9th Cir. BAP 2005).
16        We are also persuaded by Trustee’s arguments that, at the
17   time of entry of the Sale Order, the bankruptcy court had no
18   reason to believe that Trustee and Win Win were engaged in fraud,
19   collusion, or seeking to take unfair advantage of the sale
20   process.   Contrary to its current position, at the hearing on the
21   bidding procedures, counsel for Debtor assured the court that it
22   was not asserting that Trustee had colluded with Win Win: “The
23   Debtor is not arguing there’s been any collusion between the
24   trustee [and Win Win].”    Hr’g Tr. 18:6-8, April 11, 2013.    As to
25   Debtor’s various allegations that Trustee and Win Win had
26   significant contacts before the Sale Order, this is not evidence
27   of any unfair advantage.    Trustee was charged by the bankruptcy
28   court with responsibility for evaluating Win Win’s secured claim,

                                      -28-
 1   and to do so, Trustee would presumably have contacts with Win
 2   Win.
 3                                    5.
 4          The bankruptcy court relied upon sufficient, competent
 5   evidence in finding that the proposed sales to Win Win were for
 6   value and benefitted the bankruptcy estate.    At the time the Sale
 7   Order was entered, the bankruptcy court had been offered no
 8   credible evidence to show that Trustee or Win Win were engaged in
 9   fraud, collusion, or unfair advantage.    Therefore, we conclude
10   that the bankruptcy court did not clearly err in finding that, at
11   the time of entry of the Sale Order,    Win Win was a good faith
12   purchaser.
13          C.   Because the Panel may not engage in fact-finding
                 concerning events that occurred after entry of the Sale
14               Order, this matter must be remanded to the bankruptcy
                 court to consider whether any basis exists to
15               reconsider its good faith finding in the Sale Order.
16          While we find no error in the bankruptcy court’s fact
17   finding that, based upon the record before it at the time of the
18   Sale Order, Win Win was a good faith purchaser entitled to the
19   protections of § 363(m), Debtor has directed the Panel’s
20   attention to certain facts occurring after entry of the Sale
21   Order that could plausibly support an inference of collusion
22   between Trustee and Win Win.    In light of these developments,
23   under our case law, we must remand this matter to the bankruptcy
24   court for further proceedings.
25          As explained above, a determination of good faith in a sale
26   order under § 363(m) is a finding of fact to be reviewed on
27   appeal for clear error.    In re Thomas, 287 B.R. at 785.   Based
28   upon the evidence and record, a bankruptcy court may, but is not

                                      -29-
 1   required to, make a § 363(m) finding in connection with the
 2   initial sale process.   Id. (explaining that the “choice of
 3   whether to make a finding of ‘good faith’ as part of the initial
 4   sale process belongs, in this circuit, to the bankruptcy
 5   court.”).   However, all the facts necessary to a good faith
 6   determination may not be available to the bankruptcy court at the
 7   time it initially approves a sale:
 8         The difficulty with the [§ 363(m)]factual determination
           is that evidence genuinely probative of "good faith" is
 9         not commonly introduced, or even reasonably available,
           at the time a bankruptcy court approves a sale. To the
10         contrary, the fact-intensive evidence regarding the
           buyer and relations with parties in interest that may
11         indicate fraud, collusion, or unfair advantage — i.e.
           evidence suggesting lack of "good faith" — tends to
12         emerge after the sale.
13   Id.
14         Central to Debtor’s position on appeal is its allegation
15   that Trustee acted inappropriately in connection with the sales
16   and, thus, the bankruptcy court clearly erred in finding that Win
17   Win was a good faith purchaser.     While we reject that notion
18   based upon the bankruptcy court’s findings made at the time of
19   the entry of the Sale Order, Debtor argues on appeal that the
20   actions of Trustee after entry of the Sale Order support its
21   contention.   In particular, Debtor points to the events resulting
22   in Trustee’s apparent inability to close the sale of the
23   Alexandria Property to Vista, Trustee’s decision to sell the
24   Alexandria Property via a credit bid to Win Win as the “back up
25   bidder” under the Sale Order, and Win Win’s subsequent sale of
26   the Alexandria Property to a Vista subsidiary for the same price
27   as it originally offered Trustee.
28         Of course, Trustee and Win Win dispute the existence of any

                                       -30-
 1   irregularities after entry of the Sale Order.   However, the facts
 2   identified by Debtor justify additional inquiry, something the
 3   Panel may not undertake because “an appellate court is ill-
 4   equipped to take evidence and make findings on such a fact-
 5   intensive question as ‘good faith’ . . . .”   Id. at 786.   Whether
 6   facts exist which could, conceivably, alter the bankruptcy
 7   court’s good faith finding is a question that, as the fact-
 8   finder, only the bankruptcy court, and not the Panel, can decide:
 9        If an issue regarding “good faith” arises after the
          § 363(b) sale order is entered, regardless of whether
10        the court initially made a “good faith” finding, the
          appropriate procedure for addressing the issue is
11        provided by Federal Rules of Civil Procedure 59 and 60,
          which apply in bankruptcy by virtue of Federal Rules of
12        Bankruptcy Procedure 9023 and 9024. . . . In deciding
          Rule 59 and 60 motions, the bankruptcy court will make
13        findings of fact regarding “good faith” (either for the
          first time or supplementing prior findings), which
14        findings may then be reviewed on appeal for clear
          error.
15
16   Id. at 785-86;10 see also First State Operating Co. v. Holbrook
17   (In re Lotspeich), 328 B.R. 209, 218 (10th Cir. BAP 2005)
18   (acknowledging that, in the absence of the fact findings
19
20
          10
            After the limited remand in In re Thomas, the bankruptcy
21   court entered detailed findings to support its conclusion that
22   the buyer in that case was indeed a good faith purchaser of the
     property. Thomas again appealed the bankruptcy court's order,
23   and the Panel consolidated that appeal with the original appeal.
     In an unpublished decision, the Panel determined that the
24
     bankruptcy court's finding of good faith was not clearly
25   erroneous and affirmed the bankruptcy court’s good faith finding
     and the order approving the sale. Thomas v. Namba
26   (In re Thomas), BAP No. CC-02-1307/1237 (Memorandum, January 9,
27   2004). Thomas appealed the Panel's decisions to the Ninth
     Circuit, which affirmed. Thomas v. Namba (In re Thomas),
28   154 Fed. Appx. 673 (9th Cir. 2005).

                                    -31-
 1   necessary to show a purchaser is acting in good faith, a remand
 2   to the bankruptcy court is required).
 3        The essence of Debtor’s argument here is that two events
 4   occurring after entry of the Sale Order evidence its contention
 5   that there was some sort of fraud, collusion, or seeking unfair
 6   advantage between Trustee and Win Win, and possibly between Win
 7   Win and Vista, in completing the sales.   First, as Trustee
 8   concedes, Trustee did not complete the sale of the Alexandria
 9   Property to the winning bidder, Vista, as ordered by the
10   bankruptcy court and, instead, sold the Property to Win Win as
11   the backup bidder.   The record is disputed as to why the sale to
12   Vista by Trustee was not completed.    Trustee and Win Win suggest
13   in their appellate briefs that an unresolved tax lien and
14   inability to obtain title insurance prevented the sale from
15   closing.   Trustee, however, provides little information about
16   what tax lien was involved, why a title company would not insure
17   clear title, and why this predicament prevented the sale to
18   Vista, but allowed a sale to Win Win and later the Win Win-to-
19   Vista transfer.   Debtor disputes that these circumstances
20   justified Trustee’s decision to sell to Win Win instead of Vista.
21        The other significant post-Sale Order event targeted by
22   Debtor concerns Win Win’s almost simultaneous sale of the
23   Alexandria Property to Vista for the same price that Vista
24   originally bid in the bankruptcy court.   Win Win alleges in its
25   appellate brief that it was under water in its investment in this
26   property in excess of $2,000,000, and that it did not want to
27   hold on to the asset.   Debtor, however, argues that this
28   transaction suggests there was fraud, collusion, and unfair

                                     -32-
 1   dealing among Trustee, Win Win, and Vista, insofar as there is no
 2   adequate explanation why, within weeks of the sale, Vista would
 3   decline to pay Trustee and the estate $6,800,000 absent title
 4   insurance, but was nonetheless willing to pay Win Win the same
 5   amount.
 6        While we are skeptical of Debtor’s allegations of
 7   impropriety in concluding the sales, we cannot properly resolve
 8   these issues.    We are bound by In re Thomas which instructs that,
 9   under these circumstances, the bankruptcy court, not the Panel,
10   should decide whether to reexamine its original § 363(m) good
11   faith determination.   Since this appeal divested the bankruptcy
12   court of jurisdiction to alter the status quo of the appeal, the
13   Panel concludes its should grant a “limited remand to the trial
14   court for the purpose of determining the factual question of
15   ‘good faith.’”   In re Thomas, 287 B.R. at 786 (citing Chas. A.
16   Wright et al., FEDERAL PRACTICE & PROCEDURE § 3937.1 at n.29 (2d ed.
17   1996)).
18                              VI. CONCLUSION
19        While this Panel concludes that the bankruptcy court did not
20   err in ruling that Win Win was a § 363(m) good faith purchaser
21   based upon the record before it at the time it entered the Sale
22   Order, we REMAND this matter to the bankruptcy court with
23   instructions that it conduct such further proceedings as it deems
24   appropriate to decide whether it should reconsider its § 363(m)
25   good faith finding concerning the purchasers based upon any
26   events and facts occurring after entry of the Sale Order.
27
28

                                      -33-
