The defect was potentially lethal: while in motion, a car's ignition could accidentally turn off, shutting down the engine, disabling power steering and braking, and deactivating the airbags. Various individuals nonetheless initiated class action lawsuits against New GM, asserting “successor liability” claims and seeking damages for losses and injuries arising from the ignition switch defect and other defects. Among those objections were arguments against the imposition of a “free and clear” provision to bar claims against New GM as the successor to Old GM made by consumer organizations, state attorneys general, and accident victims. See In re Trans World Airlines, Inc., 322 F.3d 283, 288 (3d Cir. But courts have permitted a “broader definition that encompasses other obligations that may flow from ownership of the property.” 3 Collier on Bankruptcy ¶ 363.06. 2003) (“[T]he term ‘interest’ is a broad term no doubt selected by Congress to avoid ‘rigid and technical definitions drawn from other areas of the law.’ ” (quoting Russello v. See 3 Collier in Bankruptcy ¶¶ 363.06, ; Trans World Airlines, 322 F.3d at 289. § 363(f) (“free and clear of any interest in such property”), with § 1141(c) (“free and clear of all claims and interests”). A claim is (1) a right to payment (2) that arose before the filing of the petition. Those claims directly relate to the ownership of the GM automaker's business—Old GM built cars with ignition switch defects. If the ignition switch defect were revealed in the course of bankruptcy, plaintiffs could have petitioned the government, as the majority owner of New GM, to consider how millions of faultless individuals with defective Old GM cars could be affected. We do not know whether the proceedings would have been delayed, but some delay was certainly possible. Indeed, several provisions of the Code prohibit modification of bankruptcy orders unless those orders are stayed pending appeal. A controversy that is “appropriate for judicial determination ․ must be definite and concrete, touching the legal relations of parties having adverse legal interests.” Aetna Life Ins.
and its debtor affiliates (“Plan”) became effective and their assets were transferred to the HERO Liquidating Trust.
Kenosha Engine was an automobile and engine factory in Kenosha, Wisconsin.
First opened for automobile production in 1902 by the Thomas B.
Volk, on the brief), Hagens Berman Sobol Shapiro LLP, Seattle, Washington, and Elizabeth J. This Court has not decided, however, “the difficult case of pre-petition conduct that has not yet resulted in detectable injury, much less the extreme case of pre-petition conduct that has not yet resulted in any tortious consequence to a victim.” Id. Chateaugay I considered a hypothetical bankrupt bridge building company, which could predict that out of the 10,000 bridges it built, one would one day fail, causing deaths and other injuries. Recognizing these claims would engender “enormous practical and perhaps constitutional problems.” Id. To summarize, a bankruptcy court may approve a § 363 sale “free and clear” of successor liability claims if those claims flow from the debtor's ownership of the sold assets. Courts ask “whether the state acted reasonably in selecting means likely to inform persons affected, not whether each property owner actually received notice.” Weigner v. Citing no law, the objection was that New GM should assume these liabilities “[i]n light of the relationship between [Old GM] and [New GM] ․, as well as the statements by the United States government promising that all warranty obligations would be honored.” Bankr. First, it is well documented that one of the primary impetuses behind a quick § 363 sale was to “restore consumer confidence.” GM, 407 B. Cars are owned for years and form the cornerstones of quintessentially American activities: dropping off and picking up children from school, drive-ins and drive-thrus, family vacations and road trips. The safety and reliability of a car are central to these activities. § 362(b)(1) (exempting from usual automatic stay criminal actions against debtor). We ordinarily review “dismissal on grounds of equitable mootness for abuse of discretion, under which we examine conclusions of law de novo and findings of fact for clear error.” In re BGI, Inc., 772 F.3d 102, 107 (2d Cir. There were, however, no claims asserted against Old GM or GUC Trust in bankruptcy court or in the multi-district litigation. The equitable mootness doctrine has enigmatic origins, and the range of proceedings in which it applies is not well settled. 83, 95 (1968) ( “limit[ing] the business of federal courts to questions presented in an adversary context and in a form historically viewed as capable of resolution through the judicial process”).
C., Dallas Texas, for Appellants–Cross–Appellees Ignition Switch Plaintiffs. Flaxer, Golenbock Eiseman Assor Bell & Peskoe LLP, New York, New York, for Appellants Groman Plaintiffs. STEINBERG (Scott Davidson, on the brief), King & Spalding LLP, New York, New York, and Merritt E. During the financial crisis of 20, as access to credit tightened and consumer spending diminished, Old GM posted net losses of billion over the course of a year and a half. When Old GM's private efforts failed, President Barack Obama announced to the nation a solution—“a quick, surgical bankruptcy.” Old GM petitioned for Chapter 11 bankruptcy protection, and only forty days later the new General Motors LLC (“New GM”) emerged. The bankruptcy court assumed that the Sale Order's broad language suggested that all of these claims fell within the scope of the “free and clear” provision. Instead, the President and Treasury oversaw its affairs during the bailout and Treasury owned a majority stake following the bankruptcy. The facts here were peculiar and are no doubt colored by the inadequate notice and plaintiffs' lack of any meaningful opportunity to be heard. Given the bankruptcy court's focus on consumer confidence, the involvement of Treasury, the financial stakes at the time, and all the business circumstances, there was a reasonable possibility that plaintiffs could have negotiated some relief from the Sale Order. First, the bankruptcy court stated that it “would not have let GM go into the liquidation that would have resulted if [it] denied approval of the 363 Sale.” MLC II, 529 B. The choice was not just between the Sale Order as issued and liquidation; accommodations could have been made. Without factual findings relevant to determining knowledge, we have no basis for deciding whether notice was adequate let alone whether enforcement of the Sale Order would violate procedural due process as to these claims. Our Circuit has acknowledged that the doctrine draws on “equitable considerations as well as the constitutional requirement that there be a case or controversy.” Chateaugay III, 10 F.3d at 952. However broad the doctrine of equitable mootness, Article III requires a case or controversy before relief may be equitably mooted.