In Re: Windstream Holdings, Inc.

Background

U.S. Bank National Association, acting as indenture trustee for certain unsecured notes of Windstream Services, LLC, and CQS (US), LLC appealed two bankruptcy-court orders: an order approving a settlement between Windstream Holdings, Inc. and its debtor subsidiaries and Uniti Group, Inc., and an order confirming the debtors’ Chapter 11 plan of reorganization. Elliott Investment Management L.P. intervened in the appeal.

Before the district court was the appellants’ motion for a determination of “post-effective date jurisdiction” or, alternatively, a stay of the Confirmation Order while the appeal proceeded. The appellants wanted the court to decide in advance whether the appeals would become equitably moot—a doctrine allowing a court to decline to disturb an implemented bankruptcy plan because doing so could unfairly disrupt the reorganization. The debtors and Elliott opposed the motion.

The plan became effective and was substantially consummated on September 21, 2020, while the motion was pending. The bankruptcy court had previously denied a similar request to stay consummation of the plan.

Analysis

The court declined to decide equitable mootness before addressing the merits of the appeals. It explained that equitable mootness is not a constitutional jurisdictional bar. Instead, it concerns whether a particular remedy should be withheld because changing an implemented plan would be inequitable. The court also stated that consummation of a reorganization plan alone does not deprive the district court of jurisdiction over a bankruptcy appeal.

Because the appellants could potentially receive some relief if they prevailed, the court concluded that the plan’s consummation did not require an advance ruling that the appeal was moot. The court reserved the equitable-mootness question until it could consider the parties’ arguments on the merits.

The court separately addressed the request to stay enforcement of the Confirmation Order and implementation of the plan. It held that request moot because the plan had already become effective and been substantially consummated. The court stated that it could not stay implementation after the debtors had substantially reorganized.

Disposition

Judge Vincent L. Briccetti denied the motion. The court declined to decide the equitable-mootness issue in advance, held that the request for a stay was moot, and denied that request as moot. The clerk was directed to terminate the motion.