You are here: / / Doctrine of Equitable Mootness for Bankruptcy Ruling ​
,

Doctrine of Equitable Mootness for Bankruptcy Ruling ​

In this contract action, the issue at the heart of the case before the Second Department was the preclusive effect of a bankruptcy court ruling and the doctrine of “equitable mootness” which prohibits disturbing a bankruptcy plan already implemented.  The easiest way to convey the nature of the legal issues in the case is to quote the relevant discussions in the Second Department’s decision:

In light of authority holding that a court should apply the rules of res judicata followed in the jurisdiction that rendered the earlier decision …, we apply federal res judicata law in determining whether the doctrine of res judicata bars this action … .

Under federal res judicata law, subsequent litigation is prohibited if a prior court ruling ” was (1) a final judgment on the merits, (2) by a court of competent jurisdiction, (3) in a case involving the same parties or their privies, and (4) involving the same cause of action” … . This rule applies with full force to matters decided by the bankruptcy courts, including those concerning Chapter 11 reorganization … . Moreover, in the bankruptcy context, the court must also consider whether an independent judgment in a separate proceeding would ” impair, destroy, challenge, or invalidate the enforceability or effectiveness'” of the reorganization plan … .

The plaintiffs contend that there was no final judgment on the merits because the appeal from the 2009 New York bankruptcy court order was dismissed on the ground of equitable mootness. Equitable mootness is invoked to avoid disturbing a reorganization plan once implemented …. When a plan has been substantially consummated, an appeal should be dismissed unless several requirements, the most important of which is that the appellant sought a stay of confirmation, are satisfied … .

Here, the District Court dismissed the appeal from the 2009 New York bankruptcy court order because the Kmart reorganization plan had been implemented and RM 18 had failed to seek a stay of the confirmation. Once the appeal was dismissed as moot, the 2009 New York bankruptcy court order became final …. Since there was no vacatur of the 2009 New York bankruptcy court order, it has preclusive effect … . …[T]he plaintiffs may not maintain the present litigation, which challenges [the] final adjudication by a court of competent jurisdiction … .  RM 18 Corp. v Bank of NY Mellon Trust Co., N.A., 2013 NY Slip Op 01541, 2011-o9112, Index No 15992/10, 2nd Dept. 3-13-13

 

 

You might also like
Fall After Coverage Ceased Not Covered, Even though Dangerous Condition Alleged to Have Existed Before Termination of Coverage
PLAINTIFF DID NOT DEMONSTRATE SANCTIONS FOR SPOLIATION OF EVIDENCE WERE WARRANTED; THE VIDEO FOOTAGE FOR THE DAY OF THE FALL HAD BEEN AUTOMATICALLY DELETED BEFORE THE PRESERVATION LETTER WAS RECEIVED; HOWEVER DEFENDANTS HAD PRESERVED 52 SECONDS OF VIDEO SHOWING JUST BEFORE THE FALL, THE FALL AND PLAINTIFF WALKING AWAY (SECOND DEPT). ​
EQUITABLE ESTOPPEL DOCTRINE PROPERLY APPLIED TO FIND THAT THE FORMER SAME-SEX DOMESTIC PARTNER HAD STANDING TO SEEK CUSTODY AND VISITATION RE: CHILDREN BORN DURING THE RELATIONSHIP, PRESUMPTION OF LEGITIMACY RE: A CHILD CONCEIVED WHEN THE BIOLOGICAL MOTHER WAS PREVIOUSLY MARRIED WAS REBUTTED (SECOND DEPT).
QUESTIONS OF FACT PRECLUDED SUMMARY JUDGMENT IN THIS ACTION AGAINST THE TOWN; TOWN POLICE HAD CONFISCATED PLAINTIFF’S DECEDENT’S HUSBAND’S GUN AFTER SHE TOLD THE POLICE HE HAD ASSAULTED HER; THE TOWN SUBSEQUENTLY RETURNED THE GUN TO HER HUSBAND AFTER LEARNING HE WAS A RETIRED POLICE OFFICER; HER HUSBAND THEN SHOT AND KILLED PLAINTIFF’S DECEDENT AND TOOK HIS OWN LIFE (SECOND DEPT).
BANK DID NOT MEET THE REQUIREMENTS OF THE BUSINESS RECORDS EXCEPTION TO THE HEARSAY RULE AND THEREFORE DID NOT DEMONSTRATE STANDING TO BRING THE FORECLOSURE ACTION, BANK’S SUMMARY JUDGMENT MOTION SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT).
Refusal to Comply with Discovery Demand Supported Sanction of Dismissal of the Complaint
No Allegation Plaintiffs’ “Physical Safety” Was Endangered Re: Cause of Action for Negligent Infliction of Emotional Distress/No Allegation of Sufficiently Extreme and Outrageous Conduct Re: Cause of Action for Intentional Infliction of Emotional Distress—Those Causes of Action Were Therefore Properly Dismissed
INFANT PLAINTIFF ASSUMED RISK OF INJURY PLAYING BASKETBALL.

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Taser or Stun Gun Is Not a “Dangerous Instrument” for Purposes of Burglary... Res Ipsa Loquitur Is Rarely a Basis for Summary Judgment/Questions of Fact About...