FILED

+Corrected 2/20/15 NOV 12 2014

NOT FOR PUBLICATION MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: MORTGAGES LTD., No. 12-15229

Debtor, D.C. Nos. 2:11-cv-00853-RCJ 2:08-bk-07465-RJH

REV OP GROUP,

MEMORANDUM*

Appellant,

v.

ML MANAGER LLC,

Appellee.

REV OP GROUP, No. 12-15438

Appellant, D.C. No. 2:10-cv-01819-RCJ

v.

ML MANAGER LLC, an Arizona limited liability company,

Appellee,

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.

MORTGAGES LTD.,

Debtor - In Re.

In the Matter of: MORTGAGES LTD., No. 12-16293

Debtor, D.C. No. 2:10-cv-01917-RCJ

BEAR TOOTH MOUNTAIN

HOLDINGS, L.L.P.; et al.,

Appellants,

v.

ML MANAGER LLC,

Appellee.

In re: MORTGAGES LTD., No. 12-16725

Debtor, D.C. No. 2:12-cv-00036-RCJ

QUEEN CREEK XVIII, L.L.C.,

Appellant,

v.

ML MANAGER LLC,

Appellee.

2 Appeal from the United States District Court for the District of Arizona Robert Clive Jones, District Judge, Presiding

Argued and Submitted January 16, 2014 San Francisco, California

Before: WALLACE and BYBEE, Circuit Judges, and GETTLEMAN, Senior District Judge.**

In two Opinions filed with this Memorandum, we address three of the six

appeals filed by Rev Op Group, objecting investors to certain decisions made by

ML Manager LLC (ML Manager), which manages and operates the loan portfolio

of bankrupt debtor Mortgages Ltd. In this Memorandum, we address the other

three appeals, which are from district court affirmances of four orders by the

bankruptcy court that involve different legal issues than those in the two Opinions.

Pursuant to the Declaratory Judgment of the bankruptcy court, ML Manager sold

four properties of the estate, over Rev Op Group’s objection, with the bankruptcy

court’s approval. Rev Op Group appealed each approval to the district court, which

affirmed. Rev Op Group filed timely notices of appeal.

_____________________________________________

+ **The Honorable Robert W. Gettleman, Senior District Judge for the U.S.

District Court for the Northern District of Illinois, sitting by designation.

3 We have jurisdiction over these appeals under 28 U.S.C. § 158(d)(1), and dismiss

the appeals of these sales orders as equitably moot.

We treat sales orders differently than the orders subject to the other appeals for

purposes of equitable mootness. Appeals from unstayed orders approving a sale

to a good faith purchaser are moot except when the sale is subject to a state right

of redemption, even if the appellant sought a stay and otherwise diligently

exercised its appellate rights. In re Onouli-Kona Land Co., 846 F.2d 1170,

1172–73 (9th Cir. 1988).

Rev Op Group sought stays of two of the sales orders in the bankruptcy and

district courts, but it could not obtain stays because of the high cost of the

calculated bond. Therefore, none of the sales orders Rev Op Group now challenges

were stayed. Arizona does not have a state right of redemption. Mid Kansas Fed.

Sav. & Loan Ass’n of Wichita v. Dynamic Dev. Corp., 804 P.2d 1310, 1315 n.3

(Ariz. 1991) (in banc).

The bankruptcy court specifically found that the purchasers of the Citi Lofts

and Zacher Properties acted in good faith, and the district court affirmed that

finding. We accept those factual findings because they are not “clearly erroneous.”

In re Filtercorp, Inc., 163 F.3d 570, 577 (9th Cir. 1998). The bankruptcy court did

not make “explicit finding[s] of good faith” for the purchasers of the University

4 and Ash and Dysart Properties. Nonetheless, like in Onouli-Kona, we still conclude

those purchasers bought in good faith as a matter of law, because Rev Op Group

has never argued or shown that the purchasers bought with “fraud, collusion or an

attempt to take grossly unfair advantage of other bidders.” Onouli-Kona, 846 F.2d

at 1173–74 (citation and alterations omitted). Thus, these appeals of unstayed sales

orders to good faith purchasers are moot.

Rev Op Group makes three arguments to the contrary, which we reject. First,

even though in our opinion in Rev Op Group v. ML Manager LLC, Nos. 12-15229,

12-15438, 12-16293 & 12-16725 we reverse the legal basis for the sales, appeals of

unstayed sales orders to good faith purchasers are moot under the broader

“bankruptcy mootness rule” that complements bankruptcy law regardless of

whether the sales should have been made. Id. at 1172.

Second, even if the purchasers of the properties actually or constructively

knew of Rev Op Group’s disputes against ML Manager’s authority, and thus

bought the properties subject to Rev Op Group’s claim under Arizona law, these

appeals are moot because once Rev Op Group failed to obtain stays of the sales it

“accepted the sale[s] as a final distribution from the collective proceeding.” Id. at

1174. Any Arizona law that purports to retain Rev Op Group’s interest in the

5 properties “preserved no rights of [Rev Op Group] that remained intact after [Rev

Op Group’s] failure to obtain a stay.” Id.

Finally, Rev Op Group’s legal citations are obviously distinguishable. Our

decision in Goodwin v. United States, 935 F.2d 1061 (9th Cir. 1991) does not

apply here, because that case was decided under the Internal Revenue Code, which

has “no similar [bankruptcy] mootness provision.” Id. at 1064. Moreover, we are

not bound by, nor are we required to defer to, the Bankruptcy Appellate Panel’s

decision in In re PW, LLC, 391 B.R. 25 (B.A.P. 9th Cir. 2008). Regardless, that

decision – which “reattach[ed]” the interests of junior lien holders to a property

after it was sold “free and clear” – is inapplicable, because in that case all affected

parties were “before the court, and no third-party action [was] required to

reestablish” the junior lienholders’ interests, whereas here, the third party

purchasers are not before us. Id. at 34.

APPEALS DISMISSED.

6