Logan Riffenburg v. Mark Randy Rice
Split Score
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Case Summary
Disposition
Dismissed
The Eighth Circuit Bankruptcy Appellate Panel dismissed Logan R. Riffenburg’s appeal, holding that the consummated sale of the bankruptcy estate’s one-half interest in real property was statutorily moot under 11 U.S.C. § 363(m) because no stay was obtained and the purchaser’s good-faith status was unchallenged. The panel therefore granted the trustee’s motion to dismiss and denied Riffenburg’s emergency stay motion, with one judge dissenting on the ground that § 363(m) did not apply absent an express finding of the purchaser’s good faith.
Circuit Split Identified
Legal Issue
What constitutes a “good-faith purchaser” entitled to § 363(m) mootness protection in bankruptcy asset sales.
Circuit Positions
Good faith is negated only by misconduct such as fraud, collusion, or grossly unfair advantage; no separate requirement that purchaser pay fair value or lack notice of adverse claims ("misconduct" test).
Purchaser must buy for value, in good faith, and without notice of adverse claims (three-part Willemain standard).
Good faith includes paying at least a substantial percentage of appraised value (≈75%) in addition to absence of misconduct.
Conflict Summary
Circuits differ on whether good faith is satisfied solely by the absence of fraud, collusion, or unfair advantage (misconduct test) or whether it additionally requires that the purchaser pay fair value and/or lack notice of adverse claims. Some circuits impose an objective value threshold.