Plain-English summary
Court rules §363(m) is not jurisdictional, vacates and remands Second Circuit decision
The Court unanimously held that 11 U.S.C. §363(m) — a provision limiting the effect of certain appeals of bankruptcy sale orders — is not a jurisdictional bar to appellate review. The case was vacated and remanded to the lower courts for further proceedings consistent with that conclusion.
Why this matters
This ruling clarifies that limits in §363(m) do not automatically strip appeals courts of power to hear challenges to bankruptcy sales. Instead, appellate courts can consider defenses like forfeiture or waiver and manage appeals under ordinary procedural rules. That affects the ability of parties to seek review of how bankruptcy sales were approved and the range of procedural tools courts can use when appeals are late or imperfect.
Who may feel it
- Buyers and sellers in bankruptcy sales (creditors and purchasers)
- Debtors and bankruptcy estate stakeholders
- Appellate and bankruptcy courts
- Lawyers handling bankruptcy sales and appeals
Key questions
- Does §363(m) of the Bankruptcy Code impose a jurisdictional limit on appellate review of unstayed bankruptcy sale orders?
- If §363(m) is not jurisdictional, how should appellate courts treat defenses such as waiver or forfeiture when reviewing bankruptcy sale orders?