                                                                           FILED
                             NOT FOR PUBLICATION                            JUN 10 2014

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS



                             FOR THE NINTH CIRCUIT


In re: LOOP 76, LLC,                             No. 12-60021

              Debtor,                            BAP No. 11-1094


WELLS FARGO BANK, NA,                            MEMORANDUM*

              Appellant,

  v.

LOOP 76, LLC,

              Appellee.


                           Appeal from the Ninth Circuit
                            Bankruptcy Appellate Panel
            Kirscher, Williams, and Jury, Bankruptcy Judges, Presiding

                          Argued and Submitted April 7, 2014
                              San Francisco, California

Before: KLEINFELD, NGUYEN, and WATFORD, Circuit Judges.




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Wells Fargo challenges the confirmation of the reorganization plan under

Chapter 11 of debtor Loop 76, LLC. We have jurisdiction over this appeal from

the Bankruptcy Appellate Panel (“BAP”) under 28 U.S.C. § 158(d). “This court

reviews decisions of the BAP de novo, and thus reviews the bankruptcy court’s

decisions under the same standards used by the BAP.” Arrow Elecs., Inc. v. Justus

(In re Kaypro), 218 F.3d 1070, 1073 (9th Cir. 2000). Findings of fact are reviewed

for clear error; legal conclusions are reviewed de novo. Sigma Micro Corp. v.

Healthcentral.com (In re Healthcentral.com), 504 F.3d 775, 783 (9th Cir. 2007).




      Before addressing the merits of this appeal, we must decide whether it is

equitably moot. We hold that it is not, but because the bankruptcy court did not

clearly err in finding that Genesee Funding held a secured claim and voted in good

faith to accept the plan, we affirm confirmation of the plan.



                               1. Equitable Mootness

      Loop 76 has moved to dismiss this appeal as equitably moot, arguing that

the plan has been substantially consummated and that unwinding it now would

unfairly prejudice claimholders not party to this suit who have been paid under the


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plan. Although Wells Fargo contends that Loop is judicially estopped from

making such an argument, we are nevertheless bound to confront the issue for the

benefit of third parties not before the court for whom the doctrine of equitable

mootness was designed. 13B FEDERAL PRACTICE AND PROCEDURE § 3533.2.3 (3d

ed.) (“Bankruptcy appeals provide numerous examples of the need to protect third-

party interests arising from substantial implementation of a reorganization plan

pending appeal.”).



      The crux of the matter is whether “modification of the plan of reorganization

would bear unduly on the innocent,” and “most importantly,” whether on remand

the bankruptcy court is “able to devise an equitable remedy” that does not

completely “knock[ ] the props out from under the plan.” Motor Vehicle Cas. Co.

v. Thorpe Insulation Co. (In re Thorpe Insulation Co.), 677 F.3d 869, 881–83 (9th

Cir. 2012).



      In its opposition to the motion to dismiss, and at oral argument, Wells Fargo

stated that it is not asking for third-party claimholders to disgorge payments they

received under the plan. Wells Fargo also committed itself to refunding all

payments it has received under the plan. With these assurances from Wells Fargo


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we are satisfied that no third parties would be unfairly affected and that the

bankruptcy court could fashion an appropriate remedy. Id.; see also In re 203 N.

LaSalle St. P’ship, 126 F.3d 955, 961 (7th Cir. 1997) (holding that appeal was not

equitably moot where creditor sought to foreclose on the property, but did not seek

to reverse lease agreement with tenant and agreed to return payments it received

and repay investors), rev’d on other grounds, 526 U.S. 434 (1999).



                                  2. Genesee Claim

      Wells Fargo challenges the bankruptcy court’s findings that Genesee

Funding held a secured claim. Genesee and Loop signed a letter that outlined

financing terms for the purchase of maintenance equipment and specified that

equipment purchased using the loan proceeds would serve as security. It is true

that the financing letter did not precisely lay down every term of the agreement.

But, under Arizona law, certainty of terms goes to the question of “whether the

parties manifested assent or intent to be bound.” Schade v. Diethrich, M.D., 760

P.2d 1050, 1058 (Ariz. 1988). Here, Genesee delivered maintenance equipment

with Loop’s knowledge and approval, indicating that the parties intended to form a

binding agreement. Id. at 1059 (“The fact that one of the parties, with the

knowledge and approval of the other, has begun performance is nearly always


                                           4
evidence that they regard the contract as consummated and intend to be bound

thereby.”) (internal quotations omitted). And because the letter “reasonably

identifie[d]” the category of collateral securing the loan (maintenance equipment),

it qualifies as an enforceable security agreement. Ariz. Rev. Stat. Ann. § 47-

9108(A), (B). Thus, there was a substantial evidentiary basis for the bankruptcy

court’s findings of fact, and they were not clearly erroneous.



      Wells Fargo also faults the bankruptcy court for failing to make an explicit

finding as to whether Genesee’s vote should have been designated under § 1126(e).

11 U.S.C. § 1126(e) (bankruptcy court may designate an entity whose vote was not

made or procured in good faith or in accordance with Title 11). But the bankruptcy

court did find that the plan was proposed in good faith, that the plan complied with

Title 11, and that the Genesee class accepted the plan. By making these express

findings, the bankruptcy court implicitly found that Genesee voted in good faith to

accept the plan and that Genesee’s vote need not be designated. See 11 U.S.C. §

1126(c) (acceptance of plan by class cannot be based on acceptance by entity

designated under § 1126(e)); Brady v. Andrew (In re Commercial W. Fin. Corp.),

761 F.2d 1329, 1334 (9th Cir. 1985) (holding that, despite absence of express

finding of whether claims placed in the same class were substantially similar,


                                          5
bankruptcy court implicitly made such finding when it found the plan complied

with Chapter 11). The bankruptcy court’s good-faith finding was not clearly

erroneous.

                                         ***

      Finally, Wells Fargo challenges the separate classification of its unsecured

claim from the class of general unsecured creditors, which Wells Fargo argues is

impermissible gerrymandering. Resolution of this issue, however, would not

change the result in this case so we decline to reach it.



      A reorganization plan can be confirmed, notwithstanding dissent from some

classes, so long as at least one impaired class of claims approves of the plan. 11

U.S.C. § 1129(b)(1). Here, the Genesee class, which was impaired, voted to accept

the plan. Even if Wells Fargo’s unsecured claim were to be classified with the

other unsecured claims (and that class were to reject the plan), Genesee’s vote in

favor of the plan would still allow the plan to be confirmed.



      The motion to dismiss the appeal as moot is DENIED and the judgment of

the Bankruptcy Appellate Panel is AFFIRMED.




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