LUCERO, Circuit Judge.
We consider whether an appeal by an aircraft lessor is moot if the lessor seeks modification of post-petition lenders' bargained-for collateral but has failed to seek
These appeals arise from bankruptcy proceedings regarding Western Pacific Airlines, Inc. ("WestPac"). In appeal No. 98-1018 ("the lease assignment appeal"), Boullioun Aircraft Holding Co. and Boullioun Portfolio Finance I, Inc. ("Boullioun") challenge the bankruptcy court's December 10, 1997, decision that WestPac could assign its interest in three planes that it leased from Boullioun as collateral to providers of post-petition financing, despite provisions in the leases prohibiting such assignment. See In re Western Pacific Airlines, Inc., 223 B.R. 567, 573 (Bkrtcy. D.Colo.1997). The district court dismissed Boullioun's appeal of this holding as moot. See In re Western Pacific Airlines, Inc., 216 B.R. 437, 440 (D.Colo.1998). Essentially, Boullioun challenges the bankruptcy court's determination that 11 U.S.C. § 365(f)(1), which permits assignment of leases by a bankruptcy trustee, is not trumped by 11 U.S.C. § 1110, which exempts, under certain circumstances, an aircraft lessor's power to retrieve its aircraft following a lease default from the powers of the court to enjoin repossession.
In appeal No. 98-1214 ("the repossession appeal"), Boullioun challenges the district court's interpretation of another aspect of 11 U.S.C. § 1110. The district court, in In re Western Pacific Airlines, Inc., 219 B.R. 305, 309-10 (D.Colo.1998), concluded that § 1110 ceases to have effect once an aircraft lessee cures existing defaults within the allotted time period and promises not to default again, even if the lessee subsequently defaults on lease terms. Boullioun also seeks affirmance of the bankruptcy court's determination, not reached by the district court, that once it is clear to a lessor that a lessee has defaulted and will not cure, the lessor need not wait until thirty days have expired before repossessing its aircraft.
At the threshold, we consider appellees' assertion that these appeals are moot. "We review the issue of mootness de novo." Anderson v. United States Dep't of Health & Human Services, 3 F.3d 1383, 1384 (10th Cir.1993). Generally, a federal court cannot give opinions absent a live case or controversy before it. See Mills v. Green, 159 U.S. 651, 653, 16 S.Ct. 132, 40 L.Ed. 293 (1895). Specifically, a case becomes moot when it becomes "impossible for the court to grant 'any effectual relief whatever' to a prevailing party." Church of Scientology v. United States, 506 U.S. 9, 12, 113 S.Ct. 447, 121 L.Ed.2d
We first address appellees' mootness claim with respect to appeal No. 98-1018, the lease assignment appeal. The district court concluded that Boullioun's challenge to the bankruptcy court decision permitting assignment of Boullioun's leases as collateral for the post-petition financing is moot because of Boullioun's failure to seek a stay of the financing order pursuant to 11 U.S.C. § 364(e). See In re Western Pacific Airlines, Inc., 216 B.R. at 440. Section 364(e) provides that
11 U.S.C. § 364(e).
Although § 364(e) facially provides for the "reversal or modification on appeal" of an authorization to incur debt and the grant of a priority lien, it limits the effect of such modification if the challenging party has failed to seek a stay. Accordingly, § 364(e) renders some financing order challenges effectively moot. See, e.g., In re Adams Apple, Inc., 829 F.2d 1484, 1487-89 (9th Cir.1987). An appeal is moot if the court can fashion no meaningful relief because of § 364(e). See Church of Scientology, 506 U.S. at 12, 113 S.Ct. 447; In re Swedeland Dev. Group, 16 F.3d 552, 559-60 (3d Cir.1994).
We agree with the conclusion reached in In re Clinton Street Food Corp., 170 B.R. 216, 220 (S.D.N.Y.1994), that § 364(e) prohibits not only outright invalidation of a lien or priority where the challenging party has failed to seek a stay, but also modification of the terms of a post-petition lender's bargained-for collateral.
We reject Boullioun's argument that the reasoning of the Third Circuit's decision in In re Swedeland Dev. Group, 16 F.3d at 559-60, dictates that we find a live controversy here. The Swedeland court found one of several financing orders in a bankruptcy proceeding not moot on the grounds that funds under that order remained undistributed. See 16 F.3d at 561. Here, on the contrary, DIP funds have been fully distributed in reliance on the financing agreement, and merit full § 364(e) protection.
We also reject Boullioun's argument that an unresolved issue regarding a sanction of $4,000 in attorney fees saves this case from mootness.
In its reply brief, Boullioun also argues that our resolution of the lease
We turn to appellees' claim that the repossession appeal, No. 98-1214, is moot. At issue here is the district court's March 10, 1998, decision that Boullioun was not entitled, pursuant to its lease agreements and 11 U.S.C. § 1110, to repossess its aircraft despite WestPac's lease default following its prior cure of defaults and entry into a § 1110(a) agreement.
Having concluded that Boullioun's appeals are moot, we must decide whether to vacate the decisions below. When a case becomes moot while on appeal, we generally vacate the judgment below and remand with a direction to dismiss. See United States v. Munsingwear, Inc., 340 U.S. 36, 39, 71 S.Ct. 104, 95 L.Ed. 36 (1950). Vacatur, however, is an equitable remedy, see United States Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 24-29, 130 L.Ed.2d 233, 115 S.Ct. 386, and a key consideration in determining its appropriateness is whether the party seeking vacatur caused the mootness through voluntary action, see id. at 24, 115 S.Ct. 386.
Boullioun urges us to vacate the bankruptcy court's December 4, 1997 order
Considering the equities and the public interest, see United States Bancorp Mortgage Co., 513 U.S. at 24-26, 115 S.Ct. 386, we conclude that vacatur would be inappropriate here. The decisions allowing assignment of Boullioun's leases, including the bankruptcy court's order of December 4, 1997, are closely linked to the authorization of the post-petition financing, and many parties, including parties not before us in this action, have taken steps in reliance on that authorization. Our concern about the effect of vacatur on these parties, and our recognition of appellants' contribution to the mootness of this appeal by failing to seek a stay of the post-petition financing order pursuant to 11 U.S.C. § 364(e), and by repossessing and selling or re-leasing its aircraft, see United States Bancorp Mortgage Co., 513 U.S. at 24-25, 115 S.Ct. 386, persuade us that we should not vacate the orders at issue in this appeal.
Considering the equities in No. 98-1214, see United States Bancorp Mortgage Co., 513 U.S. at 24-26, 115 S.Ct. 386, we decline to grant vacatur of the decisions underpinning this appeal as well. By retrieving the three planes as to which repossession rights were at issue in this action, Boullioun has voluntarily mooted this appeal. See id. Therefore, we decline to exercise our equitable power to vacate.
While we decline to vacate the decisions below, our opinion should not be read as an affirmance of the underlying decisions on the merits. We note, moreover, that many of these issues remain unresolved at the circuit level. They must await a live, redressable controversy for resolution by this court. These appeals are
(a)(1) The right of a secured party with a security interest in equipment described in paragraph (2) or of a lessor or conditional vendor of such equipment to take possession of such equipment in compliance with a security agreement, lease, or conditional sale contract is not affected by section 362, 363 or 1129 or by any power of the court to enjoin the taking of possession unless—
Subsequently, on August 24, 1998, the bankruptcy court again deemed WestPac's lease of the third aircraft rejected, and validated the lease to Olympic Airways. However, the bankruptcy court ruled that Boullioun had violated the automatic stay by obtaining the replacement lease of the third aircraft following the April 30 order, and that the Estate was entitled to compensation for the attorney fees incurred by WestPac relating to the third aircraft. This amount was subsequently fixed at $4,000.
By order dated February 16, 1999, the bankruptcy court approved a settlement between Boullioun and the trustee regarding the amount and priority of Boullioun's claims. The settlement provided "that Boullion shall pay the Trustee the sum of $4,000 in accordance with the August 24, 1998 Order, subject to refund if the Tenth Circuit rules there was no stay violation." In re Western Pacific Airlines, Inc., Case No. 97-24701 SBB at 2 (Bankr.D.Colo. Feb. 16, 1999).