                          PUBLISHED

UNITED STATES COURT OF APPEALS
               FOR THE FOURTH CIRCUIT


MAC PANEL COMPANY,                    
               Plaintiff-Appellee,
                v.                             No. 01-1068
VIRGINIA PANEL CORPORATION,
               Defendant-Appellant.
                                      
           Appeal from the United States District Court
      for the Middle District of North Carolina, at Durham.
              Frank W. Bullock, Jr., District Judge.
        (CA-00-699-1, CA-00-700-1, BK-98-10952C-11G)

                     Argued: January 24, 2002

                     Decided: March 6, 2002

 Before WIDENER, WILKINS, and NIEMEYER, Circuit Judges.



Affirmed by published opinion. Judge Niemeyer wrote the opinion,
in which Judge Widener and Judge Wilkins joined.


                           COUNSEL

ARGUED: Rory D. Whelehan, WOMBLE, CARLYLE, SAN-
DRIDGE & RICE, P.L.L.C., Greenville, South Carolina, for Appel-
lant. John Herbert Small, BROOKS, PIERCE, MCLENDON,
HUMPHREY & LEONARD, Greensboro, North Carolina, for Appel-
lee. ON BRIEF: H. Arthur Bolick, II, BROOKS, PIERCE, MCLEN-
DON, HUMPHREY & LEONARD, Greensboro, North Carolina, for
Appellee.
2              MAC PANEL CO. v. VIRGINIA PANEL CORP.
                              OPINION

NIEMEYER, Circuit Judge:

   Challenging a Chapter 11 plan of reorganization of MAC Panel
Company, Virginia Panel Corporation, the largest creditor, appealed
the bankruptcy court’s order confirming the plan to the district court.
Because no stay of the bankruptcy court’s order had been obtained
and because the plan had been substantially consummated, the district
court dismissed the appeal as "equitably moot." The court concluded
that any reversal of the bankruptcy court order would "require the
undoing of financial transactions involving third parties" and would
"create an unmanageable . . . situation for the bankruptcy court." For
the reasons that follow, we affirm.

                                   I

   MAC Panel Company ("MAC Panel"), a North Carolina corpora-
tion operating in High Point, North Carolina, and Virginia Panel Cor-
poration ("VPC"), a Virginia corporation operating in Waynesboro,
Virginia, are virtually the only significant competitors in the manufac-
ture and sale of high performance electronic interface connector sys-
tems. In 1993, VPC sued MAC Panel for infringing two patents and
for related claims. After lengthy litigation, VPC obtained a final judg-
ment against MAC Panel for over $1.91 million. Before completing
that litigation, VPC also commenced a parallel action in August 1994
against Joseph Craycroft and John Craycroft, the president and former
president of MAC Panel, respectively, alleging that they induced
MAC Panel’s patent infringement and thereby seeking an alternative
source for VPC’s patent infringement damages.

   After MAC Panel unsuccessfully exhausted its appeals of the
patent infringement judgment, it filed this Chapter 11 bankruptcy pro-
ceeding on April 14, 1998. Shortly thereafter, it commenced an adver-
sary action in the bankruptcy court against VPC, seeking to enjoin
VPC from continuing the separate litigation against Joseph Craycroft.
MAC Panel alleged that the injunction was necessary to enable Cray-
croft to devote the time and attention necessary to prepare a plan of
reorganization for the company. That complaint was later amended to
extend the injunction request to include the claims against John Cray-
               MAC PANEL CO. v. VIRGINIA PANEL CORP.                 3
croft and to request that the injunction be made permanent as a condi-
tion of a proposed plan of reorganization under which the Craycrofts
would voluntarily pay into the bankruptcy estate the amounts neces-
sary to pay all creditors in full, including VPC.

   More particularly, the proposed plan of reorganization called for a
cash payment in full to all priorities on its effective date. Unsecured
creditors with claims less than $2,000, as well as those who were will-
ing to reduce their claims to $2,000, would receive 50% of their
claims on the effective date, with payment of the remainder six
months later. Other unsecured creditors, including VPC, would be
given the choice of receiving either an initial distribution of 35% of
their claims on the effective date, with periodic payments of the
remainder to follow, or a one-time lump sum payment of 60%.
Because implementation of the plan required that MAC Panel have
$1,217,000 on the effective date, of which MAC Panel projected to
have only $430,000, Joseph Craycroft committed, as part of the plan,
to pay to the estate at least $1.1 million. In exchange for this volun-
tary contribution, Craycroft demanded a permanent injunction, pro-
hibiting VPC from pursuing its suit against the Craycrofts
individually. The injunction would be dissolved only if MAC Panel
defaulted on its payments to VPC.

   Following opposition from VPC and confirmation hearings, the
proposed plan for reorganization was denied. The principal problems
were that the plan failed to pay VPC a sufficient rate of interest on
the deferred part of its unsecured claim and that the provision releas-
ing the Craycrofts was unacceptable. MAC Panel then filed an
amended plan. The only significant change in the amended plan rele-
vant to VPC was the payment of 9% interest, a rate that was accept-
able to VPC. Despite VPC’s continued objection — principally due
to the release of the Craycrofts — the bankruptcy court approved the
amended plan by order dated February 24, 2000. In denying VPC’s
request for a stay of that order, the bankruptcy court discounted
VPC’s opposition to the plan:

    In addition to the debtor-creditor relationship between the
    two companies . . . MAC Panel is the only competitor of
    VPC. In most Chapter 11 cases, a creditor faced with a plan
    under which it was to be paid its entire indebtedness plus
4               MAC PANEL CO. v. VIRGINIA PANEL CORP.
     9% interest, with an immediate payment of $744,000.00,
     would be motivated to support the plan to the extent that
     such creditor was guided by the instincts of a creditor.
   VPC appealed the bankruptcy court’s order and judgment of con-
firmation and filed a motion in the bankruptcy court for a stay pend-
ing appeal. When the bankruptcy court refused to grant the stay, VPC
chose neither to appeal that denial nor to seek an independent stay
from the district court.
   On the effective date of the plan, March 27, 2000, MAC Panel
acquired the $1.1 million of Craycroft funds; it made payments to cer-
tain creditors of $137,372; and it placed $1,095,329 in an interest-
bearing "Reserve Account" for other payments due on the effective
date, for claims being disputed, and for claims not yet liquidated for
creditors. This Reserve Account also included $210,000 for profes-
sional fees and expenses.
   After the effective date, MAC Panel continued the process of pay-
ing off creditors, most of whose disputed claims were resolved by set-
tlement or by the bankruptcy court. Twelve unsecured creditors
elected to receive a one-time lump sum payment equal to 60% of their
allowed claims in full satisfaction of their claims. Seven other unse-
cured creditors elected to reduce their claims to $2,000. By August
2000, MAC Panel had paid out approximately $1 million, of which
over $750,000 had been paid to VPC in respect of its judgment
against MAC Panel.
   After the effective date of the plan, MAC Panel succeeded in con-
tinuing its business anew. It secured a new loan for operations as well
as a revolving line of credit from Bank of America; it assumed 17
executory contracts in unexpired leases; it cured existing defaults
under these contract leases; and it entered into a substantial new
equipment lease with a creditor, that had a value in excess of
$175,000. It also began taking orders from customers and incurred
trade debt with creditors who assumed that MAC Panel had success-
fully emerged from bankruptcy.
   Noting all that had transpired since the effective date of the plan,
the district court concluded on VPC’s appeal that it would not be pru-
dent — some eight months after the effective date — to revisit MAC
Panel’s plan of reorganization and to risk "the undoing of financial
transactions involving third parties, not participants in this litigation."
               MAC PANEL CO. v. VIRGINIA PANEL CORP.                  5
The court concluded that it would be impractical to reverse the con-
summation of the plan and accordingly dismissed the appeal, invok-
ing the doctrine of equitable mootness. This appeal followed.

                                   II

   Unlike the constitutional doctrine of mootness, which bars consid-
eration of appeals because no Article III case or controversy remains,
the doctrine of equitable mootness is a pragmatic principle, grounded
in the notion that, with the passage of time after a judgment in equity
and implementation of that judgment, effective relief on appeal
becomes impractical, imprudent, and therefore inequitable. Applied
principally in bankruptcy proceedings because of the equitable nature
of bankruptcy judgments, equitable mootness is often invoked when
it becomes impractical and imprudent "to upset the plan of reorgani-
zation at this late date." In re UNR Indus., Inc., 20 F.3d 766, 769 (7th
Cir. 1994). As we have articulated the nature of the principle:

    Some controversies are not amenable to judicial resolution,
    and some grow beyond the remedial powers of a court. This
    is particularly true when a party, seeking a return to the sta-
    tus quo ante, sits idly by and permits intervening events to
    extinguish old rights and create new ones.

Central States, Southeast & Southwest Areas Pension Fund v. Central
Transport, Inc., 841 F.2d 92, 93 (4th Cir. 1988).

   Because the doctrine of equitable mootness is based on practicality
and prudence, its application does not employ rigid rules. Rather, a
court must determine whether judicial relief on appeal can, as a prag-
matic matter, be granted. Factors in making this determination include
(1) whether the appellant sought and obtained a stay; (2) whether the
reorganization plan or other equitable relief ordered has been substan-
tially consummated; (3) the extent to which the relief requested on
appeal would affect the success of the reorganization plan or other
equitable relief granted; and (4) the extent to which the relief
requested on appeal would affect the interests of third parties. Accord
Central States, 841 F.2d at 96 ("[D]ismissal of the appeal on moot-
ness grounds is required when implementation of the plan has created,
extinguished or modified rights, particularly of persons not before the
6               MAC PANEL CO. v. VIRGINIA PANEL CORP.
court, to such an extent that effective judicial relief is no longer prac-
tically available").
   With these factors in hand, we turn to the case before us, consider-
ing the totality of its circumstances. First, like the appellant in Central
States, VPC failed to secure a stay of the bankruptcy court’s judgment
approving the reorganization plan. Although VPC initially applied to
the bankruptcy court for a stay, its request was denied, and it chose
neither to appeal to the district court nor to seek an independent stay
in the district court or in this court. By making that strategic choice,
VPC allowed the reorganization plan to go into effect, taking the risks
that attended such a decision.
   Second, the plan of reorganization approved by the bankruptcy
court in its final judgment has now been substantially consummated.
Substantial consummation, as defined in 11 U.S.C. § 1101(2),
requires three events:
     (A) Transfer of all or substantially all of the property pro-
         posed by the plan to be transferred;
     (B) Assumption by the debtor or the successor to the
         debtor under the plan of the business or of the man-
         agement of all or substantially all of the property dealt
         with by the plan; and
     (C) Commencement of distribution under the plan.
In the present case, all three of these events have occurred. Pursuant
to the plan, the Craycroft funds were transferred to the estate of MAC
Panel, and thereafter, MAC Panel used the funds for what was a con-
tinuing process of satisfying its creditors. Most of the disputed claims
have been settled and at least 19 creditors have been paid. VPC itself
has received over $750,000, and MAC Panel has remained current in
its payments to VPC. In addition, MAC Panel has emerged from
bankruptcy as a viable company and has entered into new leases,
incurred new debt with trade creditors, and taken new orders from
customers. Because of its emergence from bankruptcy, MAC Panel
has been able to persuade these customers and a bank to extend credit.

  Finally, it is clear from the foregoing that granting VPC relief on
appeal now would undo the success of the reorganization plan and
would adversely affect third parties who have already been paid and
                MAC PANEL CO. v. VIRGINIA PANEL CORP.                    7
who have relied on the implementation of the reorganization plan to
date. See In re U.S. Brass Corp., 169 F.3d 957, 961 (5th Cir. 1999)
(stating that, while substantial consummation is a "momentous event,"
it justifies dismissing an appeal only when "the remedy . . . [sought]
will affect the success of the plan or alter the rights of third parties
that have been achieved by its substantial consummation"). A signifi-
cant amount of money was distributed and numerous promises were
made based on the assumption that MAC Panel had successfully reor-
ganized.

   VPC argues that it does not seek to undo the reorganization plan
or to affect third parties. Rather, the relief it seeks on appeal is simply
to vacate the injunction issued by the bankruptcy court against VPC
with respect to its lawsuit against the Craycrofts individually. While
an order simply vacating the injunction could be drafted, the difficulty
with VPC’s argument is that, by vacating the injunction, the condition
for the Craycrofts’ $1.1 million contribution would be undone. From
the Craycrofts’ point of view, they could have either used the million
dollars to defend the lawsuit brought against them by VPC or put the
million dollars into the bankruptcy estate so that VPC and other credi-
tors could be paid in full. The bankruptcy court could not now equita-
bly keep the money and also require the Craycrofts to defend the
lawsuit. To grant VPC its relief on appeal would thus require return-
ing to the Craycrofts their $1.1 million. And doing that would require
recouping significant funds already paid out to creditors who are not
parties to this litigation. Finally, VPC’s relief would require the court
to undo current banking and trade arrangements entered into by third
parties in reliance on the success of the reorganization plan.

   In sum, granting the relief requested by VPC on appeal would
require the bankruptcy court to traverse a totally impractical, perhaps
impossible, course — one that might be as daunting as the reconstruc-
tion of Humpty Dumpty.

   Appealing to equity, VPC points to the unfairness in allowing the
Craycrofts to avoid individual liability by helping MAC Panel pay off
its debts. At first blush, VPC’s argument holds substantial appeal. The
Craycrofts individually were not the debtors in bankruptcy and the
suit against them was an independent suit initiated by VPC. But on
a closer look, there are countervailing equities. The bankruptcy court
8                MAC PANEL CO. v. VIRGINIA PANEL CORP.
sensed that VPC was taking advantage of bankruptcy procedures to
place barriers in the way of its only competitor, an observation that
the court made on two separate occasions.* Moreover, the suit against
the Craycrofts was little more than a duplication of VPC’s original
suit against MAC Panel. Only if VPC were not paid by MAC Panel
would their suit against the Craycrofts have any value. But under the
bankruptcy arrangement, VPC will be paid in full, with interest, and
if MAC Panel were to default, then the injunction would be vacated.
In short, the independent lawsuit that VPC has against the Craycrofts
has little or no value if VPC’s damages are paid through the bank-
ruptcy proceedings.

   But even if these equities did favor VPC, the time now is too late,
as a practical matter, to order the relief that VPC requests. As we
observed in Central States, even if VPC made its case on the merits
for relief, this court could not "equitably provide any remedy." 841
F.2d at 93.

    The judgment of the district court is accordingly

                                                               AFFIRMED.

  *In addition to referring to this anticompetitive motive in rejecting
VPC’s request for stay of the plan of reorganization, the bankruptcy
court questioned VPC’s anticompetitive motive when it denied VPC
membership on the creditors’ committee:
     In the present case, VPC is not solely a creditor and has not been
     guided solely by the instincts of a creditor. Unlike any other
     creditor in the case, VPC would benefit significantly from the
     failure of MAC Panel because such failure would eliminate the
     competition. The longer MAC Panel remains in bankruptcy, the
     longer MAC Panel must compete against a competitor who not
     only is in a position to utilize MAC Panel’s presence in Chapter
     11 to gain competitive advantage but, in its dual status as a credi-
     tor, also is in a position to oppose and prolong MAC Panel’s
     efforts to emerge from bankruptcy.
