Equitable Mootness Is Alive And Well In Chapter 9

By Richard Cooper, Sean O'Neal, Luke Barefoot and Daniel Soltman (September 5, 2018, 11:38 AM EDT) -- On Aug. 16, 2018, the U.S. Court of Appeals for the Eleventh Circuit in Bennett v. Jefferson County, Alabama, dismissed an appeal relating to Jefferson County's Chapter 9 proceeding on equitable mootness grounds. In doing so, the Eleventh Circuit reversed the U.S. District Court for the Northern District of Alabama, which had previously held that the doctrine of equitable mootness had no applicability in the Chapter 9 context. The opinion brings the Eleventh Circuit in line with other courts to have considered the issue, including the Sixth Circuit in connection with Detroit and the Ninth Circuit in connection with Stockton, California's Chapter 9 proceeding. Looking ahead, the opinion should provide more assurances to municipal debtors that they will have access to the full range of arguments in potential appeals following confirmation of a plan of adjustment, and will put the onus on plan opponents to seek and obtain stays pending appeal. This opinion could also have important implications for Puerto Rico in the coming months and years as it considers the best path forward in its comprehensive restructuring efforts under the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA....

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