MOAC Mall Holdings LLC v. Transform Holdco LLC

On April 19, 2023, the U.S. Supreme Court decided MOAC Mall Holdings LLC v. Transform Holdco LLC. The dispute arose from the bankruptcy of Sears Holdings. Transform Holdco, formed to acquire Sears assets, sought assignment of a lease for a store at the Mall of America in Minnesota, owned by MOAC. The bankruptcy court approved the assignment over MOAC's objection. MOAC appealed, but the Second Circuit dismissed the appeal as statutorily moot under 11 U.S.C. §363(m), which protects good-faith purchasers from reversal of unstayed sale or lease orders. The Supreme Court unanimously held that §363(m) is not a jurisdictional bar but merely an equitable restriction, and remanded for further consideration. The ruling clarifies appellate review in bankruptcy asset transfers.

The Supreme Court unanimously reversed the Second Circuit, holding that §363(m) is not jurisdictional; the case was remanded for the appellate court to consider equitable mootness or other issues without treating the statute as a bar to jurisdiction.

Whether 11 U.S.C. §363(m) imposes a jurisdictional limit on appellate review of bankruptcy court orders approving the assignment of a lease, or whether it merely creates a non-jurisdictional, equitable mootness rule.

The ruling clarifies that statutory mootness under Bankruptcy Code §363(m) does not strip appellate courts of jurisdiction, preserving appellate rights in bankruptcy sales and lease assignments. It may affect how lower courts handle appeals of asset transfers and reinforces the distinction between jurisdictional and claims-processing rules.