                                                                           FILED
                            NOT FOR PUBLICATION                             JUN 25 2013

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS




                            FOR THE NINTH CIRCUIT



Re SEASONS PARTNERS LLC,                         No. 11-16999

          Debtor.,                               D.C. No. 4:10-cv-00772-DCB
________________________________,

ML-CFC 2006-3 SEASONS, LLC, acting               MEMORANDUM *
by and through its special services and sole
member; et al.,

              Appellants,

  v.

SEASONS PARTNERS LLC,

              Appellee.



                    Appeal from the United States District Court
                             for the District of Arizona
                     David C. Bury, District Judge, Presiding

                        Argued and Submitted June 10, 2013
                             San Francisco, California




        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: O’SCANNLAIN and HURWITZ, Circuit Judges, and PIERSOL, Senior
District Judge.**

      ML-CFC 2006-3 Seasons, LLC (Torchlight) appeals from a district court

decision affirming a Chapter 11 reorganization plan for Seasons Partners, LLC

(Seasons). We grant Seasons’ motion to dismiss the appeal as equitably moot.




1.    In 2006, Seasons received a $20.5 million secured loan from Torchlight’s

predecessor to construct a Tucson apartment complex. Seasons filed for Chapter 11

reorganization in 2009.    After Seasons filed a reorganization plan, Torchlight

requested a hearing to determine the value of the real estate subject to its lien.

Torchlight then made an 11 U.S.C. § 1111(b) election, which required that the plan

treat Torchlight’s entire claim as secured. The bankruptcy court held an evidentiary

hearing and determined that the secured property was worth $11.6 million.

      Torchlight moved for reconsideration, citing a projection by Seasons that the

complex would enjoy increased revenues in the year following confirmation. The

bankruptcy court denied the motion and confirmed the plan. On appeal to the district

court, Torchlight argued that the bankruptcy court erred in declining to reevaluate




       **
             The Honorable Lawrence L. Piersol, Senior District Judge for the U.S.
District Court for the District of South Dakota, sitting by designation.

                                         2
Seasons’ property before confirmation and by treating certain pre-petition defaults as

cured. The district court affirmed.




2.    While the appeal was pending, this court decided In re Thorpe Insulation Co.,

677 F.3d 869 (9th Cir. 2012). Seasons filed a motion to dismiss, citing In re Thorpe,

and arguing that the appeal was equitably moot.




3.    Torchlight did not seek a stay pending appeal. That failure weighs heavily in

favor of finding the appeal equitably moot. Id. at 881-82. Even if a stay had been

sought, we would “next determine whether substantial consummation of the plan has

occurred.” Id. at 882. Torchlight, however, does not contest that the plan has been

substantially consummated.

      Under Thorpe, we also consider whether modification of the plan would

negatively affect the interests of parties not before the court. Id. at 882-83. Any

modification of the plan here would plainly affect the interests of the investor that has

infused $2.5 million into the apartment venture in reliance on the confirmed plan.

      Finally, we look to whether the bankruptcy court could fashion an equitable

remedy on remand. Id. at 883. Torchlight argues that the reorganization plan could

simply be adjusted to alleviate its concerns. But the investor would not be obligated


                                           3
to agree to any modification of the plan. Even assuming that the investor’s existing

contribution could be refunded, an unraveling of the plan would be detrimental to

other creditors and likely fatal to Seasons’ reorganization.




4.    Torchlight’s failure to seek a stay has led to the precise situation the doctrine

of equitable mootness seeks to avoid: the debtor, other creditors, and an additional

investor have acted in reliance on the plan, and there is no equitable way to return the

parties to their original positions. We grant the motion to dismiss.




      DISMISSED




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