                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT
                                           
No. 92-2045

        IN RE MARK BELL FURNITURE WAREHOUSE, INCORPORATED,

                             Debtor,

                                     

           MARK BELL FURNITURE WAREHOUSE, INCORPORATED,

                      Plaintiff, Appellant,

                                v.

                   D. M. REID ASSOCIATES, LTD.,

                       Defendant, Appellee.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Douglas P. Woodlock, U.S. District Judge]
                                                       

                                           

                              Before

                       Selya, Circuit Judge,
                                           

                  Coffin, Senior Circuit Judge,
                                              

                     and Cyr, Circuit Judge.
                                           

                                           

   Leon Aronson for appellant.
               
   Gordon  P. Katz with whom Donald  R. Lassman and Widett, Slater &amp;
                                                                    
Goldman, P.C. were on brief for appellee.
           

                                           

                           May 4, 1993
                                           

          CYR, Circuit Judge.   An involuntary chapter 7 petition
          CYR, Circuit Judge.
                            

was filed against Mark  Bell Furniture Warehouse, Inc. ("Debtor")

in 1988.   The property of  the chapter 7 estate  included a pre-

petition cause of  action against D. M. Reid Associates ("Reid").

Mark  Bell ("Bell"),  Debtor's  president and  sole  shareholder,

urged the chapter 7  trustee to litigate the claim  against Reid.

When  the trustee  failed to  pursue the  claim, Bell  offered to

purchase  the cause  of action  from the  estate for  $250.   The

notice of the proposed private sale to Bell invited upset bids in

excess of $500, subject to the condition that qualifying  bidders

would be asked to submit competing sealed  bids at auction.  Reid

submitted an upset bid in the amount of $501.

          At the  auction sale  conducted  before the  bankruptcy

court on March 9, 1992, Bell submitted a sealed bid for $1000 and

Reid  bid "$1000 plus the amount of [Bell's bid]."  Although both

the  trustee and the bankruptcy  judge voiced concerns  as to the

propriety  of Reid's  "relative" bid,  neither Bell  nor Debtor's

counsel objected.  The trustee accepted Reid's $2000 bid.  Debtor

did  not seek to stay the sale.   Three days later, Reid tendered

$2000 to the trustee, and the trustee delivered a bill of sale.

          Debtor appealed  to the district court, contending that

Reid's  relative bid should be declared void and that the trustee

should  be directed  to accept  Bell's lower  bid.   The district

                                2

court  dismissed the appeal as moot, based on Debtor's failure to

obtain a stay of the sale pending appeal.1

          Absent a stay pending  appeal, Bankruptcy Code   363(m)

precludes appellate relief  invalidating a sale to a "good faith"

purchaser.  See In re Onouli-Kona  Land Co., 846 F.2d 1170, 1171-
                                           

72 (9th Cir. 1988).  On the theory that "[t]he finality and reli-

ability of judicial  sales enhance  the value of  assets sold  in

bankruptcy,"  In re Tri-Cran, Inc.,  98 B.R. 609,  617 (Bankr. D.
                                  

Mass. 1989),  section 363(m)  ensures protection of  a successful

bidder's "good faith"  reliance on a consummated sale.  See In re
                                                                 

Sax,  796 F.2d 994, 998  (7th Cir. 1986);  International Union v.
                                                              

Morse Tool,  Inc., 85  B.R. 666,  667 (D. Mass.  1988).   A "good
                 

faith"  purchaser is one who buys property  in good faith and for

value, without knowledge of  adverse claims.  In re  Tri-Cran, 98
                                                             

B.R. at  615-19 (citing  Greylock Glen  Corp.  v. Community  Sav.
                                                                 

Bank, 656  F.2d 1, 4 (1st Cir.  1981)).  "Good faith"  is a mixed
    

question of law and fact.  In re Abbotts Dairies of Pennsylvania,
                                                                 

Inc., 788 F.2d 143, 147  (3d Cir. 1986).  "Good  faith" purchaser
    

                    

     1The  district court  relied  on Bankruptcy  Code    363(m),
which provides:

          The reversal  or modification on appeal of an
          authorization under subsection (b) or  (c) of
          this section  of a sale or  lease of property
          does  not affect  the validity  of a  sale or
          lease  under such authorization  to an entity
          that  purchased  or leased  such  property in
          good faith, whether  or not such entity  knew
          of the  pendency of  the appeal, unless  such
          authorization  and  such sale  or  lease were
          stayed pending appeal.

11 U.S.C.   363(m).

                                3

status  is precluded  by, inter alia,  fraud, collusion  with the
                                    

trustee, and taking "grossly  unfair advantage" of other bidders.

In  re Andy Frain  Servs., Inc.,  798 F.2d  1113, 1125  (7th Cir.
                               

1986);  Willemain v. Kivitz, 764 F.2d 1019, 1023 (4th Cir. 1985);
                           

In re Bel Air Assocs., Ltd., 706 F.2d 301, 305 (10th Cir. 1983).
                           

          In its  appeal to the district  court, Debtor contended

that "relative" or "sharp" bids are illegal per se, hence grossly
                                                  

unfair,  see, e.g., Holliday v.  Higbee, 172 F.2d  316, 318 (10th
                                       

Cir. 1949);  Trump v. Mason, 190 F.  Supp. 887, 888 (D.D.C. 1961)
                           

(noting that relative bids "destroy the integrity of the [sealed]

bidding  system").2   Thus,  Debtor argued,  Reid  became a  "bad

faith" purchaser  merely by submitting  the unannounced  relative

bid.3  The  district court recognized the "problematic" nature of

the  "bad  faith" claim  urged by  Debtor,  but decided  that the

presumed "evil"  of relative bidding  lay in concealing  the fact

that a relative  bid had prevailed.  The court  concluded that no

"bad faith"  was shown on the part of Reid since all auction par-

ticipants (and bystanders) were  informed of Reid's relative bid,

                    

     2The notices of  appeal filed in  the bankruptcy court,  see
                                                                 
Fed.  R. Bankr. P. 8002(a), 9001(1),(3),  9002(2),(3), and in the
district court,  see  Fed. R.  App.  P. 4(a)(1),  6(a),  6(b)(1),
                    
designate Debtor as the only appellant.  Accordingly, Bell is not
a party  to the present  appeal.  Pontarelli  v. Stone,  930 F.2d
                                                      
104, 108 (1st  Cir. 1991)  (holding that court  of appeals  lacks
jurisdiction  of  appeal by  party  not designated  in  notice of
appeal as required under Fed. R. App. P. 3(c)).

     3"Relative" or  "sharp" bidding  is highly unusual  in bank-
ruptcy cases.  Although we do not condone its unannounced use, we
leave  for another day whether relative bidding is ever appropri-
ate or practicable in the context of a judicial sale.

                                4

were afforded  an opportunity  to  object to  it, and  acquiesced

until well after the bid was accepted and the sale consummated.

          Debtor again argues on appeal that the relative bidding

which  took place in this case amounted  to "bad faith."  We need

not decide this claim,  however, because it was not  preserved in

the bankruptcy  court.  See  In re LaRoche,  969 F.2d  1299, 1305
                                          

(1st Cir. 1992) (arguments not raised  in bankruptcy court cannot

be raised  for the first time on appeal) (citing In re 604 Colum-
                                                                 

bus  Ave. Realty  Trust, 968  F.2d 1332,  1343 (1st  Cir. 1992)).
                       

Debtor  had ample  opportunity  to  object  to the  relative  bid

submitted by  Reid, the trustee's  acceptance of Reid's  bid, and

the consummation of the sale.  After the sealed bids were opened,

the  bankruptcy  judge and  the  trustee engaged  in  an extended

discussion  as   to  the  appropriateness  of  relative  bidding.

Although  both Bell  and Debtor's  counsel were  present, neither

challenged the  propriety of  the bid  or the  bidding.   Nor did

Debtor request a stay.   In sum, at no time did  the Debtor alert

the bankruptcy  court to the  "unfairness" claim later  raised in

its appeal to the district court.4

                    

     4At oral argument, Debtor disclaimed any contention whatever
that relative bidding, per se, violates public policy, or that it
                             
contravenes  the  policy  favoring  maximization  of  liquidation
recoveries in  bankruptcy proceedings.   Debtor's retreat  to its
"unfair surprise" claim completely undermined its earlier conten-
tion that Reid's relative bid  was void ab initio.  See  Short v.
                                                              
Sun Newspapers, Inc., 300 N.W.2d 781  (Minn. 1980).  Accordingly,
                    
Debtor's  remaining claim    that Bell  was unfairly surprised by
Reid's  relative bid    might  portend, at most,  that Reid's bid
was voidable upon timely objection by an unsuccessful bidder.
            

                                5

          Appellate claim preclusion is especially appropriate in

these circumstances,  where a  timely objection before  the bank-

ruptcy court  might well have  enabled the  prompt submission  of

nonrelative  bids by  the assembled  participants.   At  the very
   

least, it  would  have permitted  the  bankruptcy court  to  make

findings of  fact and conclusions  of law as to  whether any cog-

nizable unfairness occurred in this case.  See Poliquin v. Garden
                                                                 

Way, Inc.,      F.2d    ,     (1st Cir. 1993)  [Nos. 92-1115, 92-
         

1116, slip op. at 8 (1st Cir. Mar. 24, 1993)]  (explaining impor-

tance  of  "raise or  waive"  rule in  the  litigation "winnowing

process,"  as it  enables courts  to "narrow  what remains  to be

decided[;] [i]f lawyers could pursue on appeal issues not proper-

ly raised below, there  would be little incentive to get it right

the first time and no end of retrials").

          Even  assuming its  "unfairness" claim  were preserved,

however, Debtor  would lack "standing" to  assert it.  See  In re
                                                                 

Dein Host,  Inc., 835 F.2d  402, 404  (1st Cir.  1987) (court  of
                

appeals  "duty  bound"  to  undertake  preliminary  inquiry  into

"standing").  Debtor  does not  allege that it  is an  "aggrieved

person,"  nor  does the  record  indicate  that Debtor  possesses

"standing."   See, e.g., Rumford  Pharmacy, Inc. v.  City of East
                                                                 

Providence,  970  F.2d  996,  1001 (1st  Cir.  1992)  ("standing"
          

requires, inter  alia, "personal  injury fairly traceable  to the
                     

allegedly  unlawful conduct");  see also  In re Lovitt,  757 F.2d
                                                      

1035, 1039 (9th Cir.), cert. denied, 474 U.S. 849 (1985).
                                   

                                6

          First, all the Debtor's property became property of the

chapter  7 estate long before  the auction sale.   See Bankruptcy
                                                      

Code    303, 541; 11 U.S.C.    303, 541.  The  chapter 7 trustee,

not  the  chapter 7  debtor,  is responsible  for  collecting all

property of the estate and reducing  it to money.  See Bankruptcy
                                                      

Code   704(1); 11  U.S.C.   704(1);  cf. Fed. R.  Bankr. P.  2010
                                        

(authorizing proceeding on trustee's bond for breach of condition

of "faithful  performance of  official duties").   Second, it  is

well established that a chapter  7 debtor generally lacks "stand-

ing" to  challenge a bankruptcy court judgment  confirming a sale

of property of the chapter 7 estate:

          A chapter 7 debtor  is not considered a "per-
          son aggrieved,"  as  [it] lacks  a  pecuniary
          interest  in  the "property  of  the estate."
          There are two exceptions:   (1) if the debtor
          can show  that a successful appeal would gen-
          erate  assets in excess of liabilities, enti-
          tling the debtor to a distribution of surplus
          under Bankruptcy Code    726(a)(6), 11 U.S.C.
            726(a)(6), or (2)  the order appealed  from
          affects the  terms of the  debtor's discharge
          in bankruptcy.

In re Thompson, 965 F.2d 1136,  1144 (1st Cir. 1992); see also In
                                                                 

re  Goodwin's  Discount  Furniture,  Inc., 16  B.R.  885,  887-88
                                         

(Bankr. 1st  Cir. 1982).    In this  case, an  estate surplus  is

neither suggested by the Debtor nor by the record, as the chapter

7  estate was hopelessly insolvent.5   Third, Debtor submitted no

bid.  Rather, Mark Bell, Debtor's president and sole shareholder,

submitted a private offer  in his own name; the chapter 7 trustee
                                          

                    

     5For  example,  the trustee  represented  in  the notice  of
proposed private sale that  the estate had "no funds"  with which
to pursue the cause of action against Reid.

                                7

designated  Bell as the offeror in his notice of proposed private

sale ("to Mark Bell  or his nominee") (emphasis added),  and Bell
                           

submitted a sealed bid  in his personal capacity ("sealed  bid of

Mark Bell").  See also supra note 2.  
                            

          In sum, Debtor failed  to preserve any cognizable claim

of injury resulting from the order approving the sale.   Thus, we

need not, indeed should not, address the idiosyncrasies attending

section  363(m)  "mootness" and  the  scope  of  the "bad  faith"

defense.

          Appeal dismissed; no costs to either party.
                                                    

                                8
