federal court in New York has dismissed as moot an appeal filed by plaintiffs with products liability claims pending against General Motors Corp. (GM) before it was sold in bankruptcy. In re: Motors Liquidation Co., No. 09 Civ. 6818 (U.S. Dist. Ct., S.D.N.Y., decided April 13, 2010). The plaintiffs sought to overturn a bankruptcy court’s approval of the automaker’s sale “free and clear” of their existing products liability claims as well as any successor liability claims they may have against the “new” GM. According to the court, the appeal was moot because the plaintiffs failed to secure a stay of the sale order, a requirement under the Bankruptcy Code, which “limits appellate jurisdiction over an unstayed sale order issued by a bankruptcy court to the narrow issue of whether the property was sold to a good faith purchaser.”

Plaintiffs did not challenge the sale order on this ground; rather, they raised jurisdictional issues. While the court expressed its sympathy for the plaintiffs, it stated, “[W]e note that their position in the bankruptcy appears to be neither better nor worse than that of any other unsecured contingent creditor. Moreover, the relief [plaintiffs] sought in the Bankruptcy Court and now seek from this Court would unravel the 363 Transaction, the only alternative to which was a liquidation in which they and other unsecured creditors would have received nothing.”