               United States Bankruptcy Appellate Panel
                            FOR THE EIGHTH CIRCUIT


                                   No. 02-6058 WM


In re:                                     *
                                           *
Farmland Industries, Inc., d/b/a           *
Livestock Services Division, d/b/a         *
Farmland Livestock Services, d/b/a         *
Honor Pet Products Co., d/b/a Premier      *
Farmtech, d/b/a Marco Polo Salame          *
Company, d/b/a Souza’s Sausage             *
Company,                                   *
                                           *
         Debtor.                           *
                                           *
American Plant Food Corp.,                 *        Appeal from the United States
                                           *        Bankruptcy Court for the
         Interested Party-Appellant,       *        Western District of Missouri
                                           *
               v.                          *
                                           *
United Agri Products, Inc., d/b/a          *
UAP-Midsouth,                              *
                                           *
         Movant-Appellee,                  *
                                           *
Farmland Industries, Inc.,                 *
                                           *
         Debtor - Appellee.                *



                              Submitted: February 5, 2003
                                Filed: February 27, 2003
Before KRESSEL, Chief Judge, SCHERMER and DREHER, Bankruptcy Judges

SCHERMER, Bankruptcy Judge

       American Plant Food Corporation (“American”) appeals the bankruptcy court1
orders reopening bidding for the purchase of certain debtor assets and approving a
compromise and settlement governing procedures for the final auction. We have
jurisdiction over this appeal. See 28 U.S.C. § 158(b). For the reasons set forth below,
we affirm.

                                        ISSUES

      The first issue on appeal is whether the bankruptcy court order reopening
bidding and the order approving a compromise establishing procedures for the final
auction are interlocutory. We conclude that the orders are interlocutory; however, we
choose to exercise our discretion to review the interlocutory orders.

       The second issue on appeal is whether the bankruptcy court abused its
discretion in reopening the bidding and approving the compromise. Included within
this issue is whether the bankruptcy court erred when it found that the holder of a
right of first refusal had not received notice of the proposed sale. We conclude that
the bankruptcy court did not err in finding that the holder of the right of first refusal
had not received notice of the sale nor did it abuse its discretion in reopening the
bidding or in approving the compromise.




      1
      The Honorable Jerry W. Venters, United States Bankruptcy Judge for the
Western District of Missouri.
                                           2
                                   BACKGROUND

       On August 16, 2002, Farmland Industries, Inc. (“Debtor”) filed a motion to
establish bid procedures and to approve the sale of a fertilizer warehouse to ConAgra
Trade Group, Inc. (“ConAgra”) pursuant to 11 U.S.C. § 363. On August 29, 2002,
the bankruptcy court approved auction and bid procedures, pursuant to which the
Debtor was to solicit additional bids and conduct an auction on September 9, 2002,
if necessary. The court scheduled a hearing for September 10, 2002, to determine
whether to approve a sale pursuant to the highest bid. Various parties submitted bids
and the Debtor conducted an auction on September 9, 2002. American submitted the
highest bid at the auction.

       United Agri Products, Inc. d/b/a UAP-MidSouth (“UAP”) appeared at the
September 10 hearing and asserted a right of first refusal with respect to the fertilizer
warehouse. UAP had not previously submitted a bid nor participated in the auction.
The right of first refusal required written notice to UAP of any proposed transfer at
least 40 days prior to the transfer.

       The issue of whether UAP had received notice of the proposed sale arose at the
hearing. The Debtor had not served a copy of the motion or notice of the sale or bid
procedures on UAP. At the Court’s invitation, UAP submitted an affidavit of its
officer stating that UAP did not have notice of the sale. In response to the UAP
affidavit, the Debtor submitted the affidavit of its employee stating that he had
contact with Mr. Moses W. Vernon, Jr. in connection with the sale negotiations with
ConAgra and that he believed Mr. Vernon was fully authorized to enter contracts on
behalf of UAP.2




      2
          UAP and ConAgra are related companies.
                                           3
      The court concluded that UAP had not received notice of the proposed sale.
On September 17, 2002, it issued its order reopening the bidding, scheduling an
auction in court on September 24, 2002, and authorizing American to submit higher
bids and UAP to match any such bids at such final auction.

       At the September 24 hearing, all parties except American reached a settlement
pursuant to which UAP agreed to waive its right of first refusal, ConAgra agreed to
waive its right to a break-up fee, and American, UAP, and Equalizer, Inc. would be
allowed to participate in a reopened auction. The court concluded that the settlement
was reasonable and entered its order dated September 25, 2002, approving the
settlement pursuant to Federal Rule of Bankruptcy Procedure 9019 and scheduling
a judicial auction for October 22, 2002.

      On October 4, 2002, American filed its appeal of the September 17 order
reopening the bidding and the September 25 order approving the compromise. On
October 21, 2002, we entered an order staying the September 17 and the September
25 orders. No final auction has yet occurred.

                            STANDARD OF REVIEW

       We review the bankruptcy court’s findings of fact for clear error and its
conclusions of law de novo. Fed. R. Bankr. P. 8013; Four B. Corp. v. Food Barn
Stores, Inc. (In re Food Barn, Inc.), 107 F.3d 558, 561-62 (8th Cir. 1997); Brink v.
Payless Cashways, Inc. (In re Payless Cashways, Inc.), 281 B.R. 648, 651-52 (B.A.P.
8th Cir. 2002). We review the bankruptcy court’s decision to reopen the bidding and
its decision to approve the compromise for an abuse of discretion. Food Barn, 107
F.3d at 558; In re Flight Transp. Corp. Sec. Litig., 730 F.2d 1128, 1135 (8th Cir.
1984).




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                                   DISCUSSION

      A.     Interlocutory Nature of Orders

       To determine whether an order is final, we must consider the extent to which
the order leaves the bankruptcy court with nothing to do but execute the order; the
extent to which delay in obtaining review would prevent the aggrieved party from
obtaining effective relief; and the extent to which a later reversal would require
recommencement of the entire proceedings. Lewis v. United States, Farmers Home
Admin., 992 F.2d 767, 772 (8th Cir. 2002); Coleman Enters., Inc. v. QAI, Inc. (In re
Coleman Enters., Inc.), 275 B.R. 533, 538 (B.A.P. 8th Cir. 2002); Bryan v. Land (In
re Land), 215 B.R. 398, 402 (B.A.P. 8th Cir. 1997). The orders at issue schedule a
judicial auction. The bankruptcy court must conduct the auction, approve or
disapprove a sale to the highest bidder at the auction, and address any other issues
which may arise in connection with such auction. The bankruptcy court has not
effectively resolved the controversy and its remaining tasks are more than mechanical
or ministerial. With respect to the second factor, any delay is minimal. Had the final
auction been conducted as scheduled, it would have occurred on October 22, 2002,
less than three weeks after American filed this appeal. Furthermore, once the auction
is completed, any party can appeal the sale and obtain an effective and timely
resolution. Finally, a later reversal after completion of the continued auction would
not require extensive relitigation. If the orders reopening the bidding were reversed
on appeal, American would be able to pursue the same relief it is seeking now and the
sale process would not have to be repeated. On the other hand, if the orders are
upheld on this appeal, the continued auction will still have to occur, and its results
might ultimately be appealed, resulting in piecemeal litigation and repeated appeals.
Based on these factors, we conclude that the orders are interlocutory.




                                          5
       This court has discretion to consider interlocutory appeals. 28 U.S.C. § 158(a)
and (b); Lewis, 992 F.2d at 771; Coleman, 275 B.R. at 538. We choose to exercise
that discretion and therefore turn to the merits of the orders.

      B.     UAP Did Not Receive Notice of the Sale.

      The bankruptcy court was faced with the issue of UAP’s right of first refusal
when UAP appeared at the hearing and asserted such right for the first time. The
court conducted a factual inquiry into whether UAP had received notice of the
proposed sale as required by the right of first refusal. The evidence that UAP had not
received a copy of the motion or notice was undisputed. The issue of actual notice
was raised and the court gave UAP twenty-four hours to submit an affidavit. The
Debtor also submitted an unsolicited affidavit on the subject. Evidence supports the
conclusion that UAP was not given notice of the proposed sale as required by the
terms of the right of first refusal. Therefore the bankruptcy court’s finding must be
upheld.

      C.     The Reopened Bidding Process.

       A bankruptcy court has considerable discretion in approving assets sales and
is granted ample latitude to strike a balance between fairness, finality, integrity, and
maximization of assets. Wintz v. Am. Freightways, Inc. (In re Wintz Cos.), 219 F.3d
807, 812 (8th Cir. 2000); Four B. Corp. v. Food Barn Stores, Inc. (In re Food Barn,
Inc.), 107 F.3d 558, 565-66 (8th Cir. 1997). The court must consider the bidders’
reasonable expectations to encourage confidence in the process. Finality and
regularity are important because they encourage interested parties to sincerely extend
their best and highest offers. On the other hand, the court must be mindful of the
interests of unsecured creditors and the goal of maximizing the value of the
bankruptcy estate. Food Barn, 107 F.3d at 565-66. Prior to entry of an order
confirming a sale, the court has broad discretion to conduct sales in the manner it

                                           6
deems most appropriate. Brink v. Payless Cashways, Inc. (In re Payless Cashways,
Inc.), 281 B.R. 648, 652 (B.A.P. 8th Cir. 2002).

       Here, the bankruptcy court carefully considered the countervailing interests of
the bidders, including the expectations of American, and those of the Debtor and the
creditors in maximizing price. American’s legally relevant interest is its expectations
surrounding the September 9 auction. American knew that after the auction the
Debtor must present the highest bid to the court for approval on September 10. The
bid procedures order and notice of sale which were served on American explicitly
stated that a hearing would be conducted after the auction to determine “whether to
approve the Wining Bid accepted by Seller as the highest or best bid at the Auction.”
Appellant’s Appendix, p. 37. American thus knew that the sale could not be final
until approved by the bankruptcy court. Therefore its justifiable expectations as a
purchaser could not have crystalized to the point of certainty prior to the entry of an
order approving the sale. To the extent auction procedures make it clear that a
hearing and court approval is required before a sale can be consummated, a bidder is
hard pressed to assert crystalized expectations of certainty. Here no such order has
been entered and no reasonable expectations have been thwarted.

       The court addressed the interests of the creditors in maximizing estate value by
continuing the auction to provide the possibility of greater recovery as a result of the
sale of this asset. The court also addressed the interests of fairness, integrity, and
finality of the process, which are designed to maximize value, by deciding to preside
over the continued auction and approve the results at the time of the auction. This
minimizes the risk of any change of events between the time the auction is conducted
and the time it is approved by the court which could potentially thwart expectations.
We reiterate, however, that it is unlikely that reasonable expectations of certainty
could ever exist prior to a hearing where court approval is required.




                                           7
        The court was also cognizant of the interests of UAP, the holder of the right of
first refusal. The bankruptcy court struck a reasoned balance, honoring UAP’s right
of first refusal while granting American the right to increase its bid in light of this
new development. The court did not abuse its discretion and its decision must be
affirmed.

      D.     Approval of the Compromise.

       At the scheduled hearing on the continued auction, all parties except American
agreed to modify the procedures for the final auction. UAP agreed to waive its right
of first refusal. ConAgra agreed to waive its break-up fee. Equalizer, Inc., a
participant in the original auction, was allowed to participate. The end result is
designed to be a judicial auction with full participation, promoting the interests of
fairness and finality and maximizing recovery for the estate. American is unhappy
because the price of the fertilizer warehouse may increase as a result of the continued
auction, resulting in American either paying more than its existing bid or deciding not
to increase its bid to exceed another bidder’s higher offer. American’s unhappiness
is not sufficient legal ground to reject the compromise. As discussed above,
American’s expectations regarding the sale had not sufficiently crystalized to render
additional bidding unjust.

       In evaluating a compromise under Federal Rule of Bankruptcy Procedure 9019,
the proper considerations are the probability of success in litigation; the difficulties,
if any, in collection matters; the complexity, expense, inconvenience, and delay
necessarily attending the litigation; and the paramount interests of the creditors and
a proper deference to their reasonable views. In re Flight Transp. Corp. Sec. Litig.,
730 F.2d 1128, 1135 (8th Cir. 1984). Here, the bankruptcy court properly considered
the risks attendant with litigation, the probabilities of success, the need for an
expeditious sale, and the paramount interests of the Debtor and the creditors in
maximizing value. The bankruptcy court did not abuse its discretion in approving the

                                           8
compromise which itself furthered the goals underlying bankruptcy sales: fairness,
finality, integrity, and maximization of assets. Accordingly, we must conclude that
the bankruptcy court did not abuse its discretion in approving the compromise.

                                  CONCLUSION

       The bankruptcy court did not err in finding that UAP had not received
sufficient notice of the proposed sale as required by the right of first refusal. The
bankruptcy court did not abuse its discretion in continuing the auction nor in
approving the compromise regarding terms to govern the continued auction.
Accordingly, we AFFIRM the court’s order of September 17, 2002, continuing the
auction and its order of September 25, 2002, approving the compromise.

      A true copy.

             Attest:

                     CLERK, U.S. BANKRUPTCY APPELLATE PANEL,
                     EIGHTH CIRCUIT




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