F I L E D

United States Court of Appeals

Tenth Circuit

PUBLISH

APR 13 1999

UNITED STATES COURT OF APPEALS

PATRICK FISHER

TENTH CIRCUIT

Clerk

In re: MAURICE G. WOODS and

TERESA J. WOODS,
Debtors.
MAURICE G. WOODS and TERESA J.
WOODS,
v.

No. 98-6063

Appellants,

THOMAS J. KENAN, Trustee;

ANDREWS ROYALTY, INC.; GARY J.
LAMB; and JON M. MORGAN,
Appellees.

APPEAL FROM THE UNITED STATES

BANKRUPTCY APPELLATE PANEL
(BAP NO. WO-97-O35)
Maurice G. Woods, II, McAtee & Molinsky, P.C., Oklahoma City, Oklahoma, for
Appellants.
Thomas J. Kenan (David Pomeroy with him on the brief), Fuller, Tubb, Pomeroy,
Kirschner, Bickford & Stokes, Oklahoma City, Oklahoma, for Appellee, Kenan.
Before ANDERSON , BRORBY , and MURPHY , Circuit Judges.

ANDERSON , Circuit Judge.

This is an appeal from a decision of the Bankruptcy Appellate Panel (BAP).

The appellants, Maurice G. and Teresa J. Woods (the Woods), argue that at the
closing of their Chapter 11 bankruptcy case in 1993, certain properties of the
bankruptcy estate were irrevocably abandoned to them by operation of law.
Thomas J. Kenan, who served as Chapter 11 trustee and as trustee under the
confirmed plan of reorganization, argues that the case was properly reopened, that
any abandonment was subsequently revoked, and that the properties in question
were validly sold to third parties. Because we agree that the bankruptcy court had
authority under 11 U.S.C. 350(b) to reopen the case, and that under Fed. R. Civ.
P. 60(b) it effectively vacated the original order closing the case, we hold that the
abandonment was revoked and that the debtors have no interest in the properties.

I. BACKGROUND
The Woods filed a Chapter 11 bankruptcy petition in December 1984. In
May 1987, Thomas Kenan was named trustee of the bankruptcy estate, which at
that time included a number of fractional interests in oil and gas properties. The
central issue in this case is the ownership of those interests, which have been
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described as very small interests in a large number of properties, essentially

constituting a revenue stream. Appellants App. Vol. I at 68 (testimony of
Kenan in bankruptcy court, April 24, 1997).
The trustee asserts that his sale of the properties to Andrews Royalty, Inc.,
Gary J. Lamb, and Jon M. Morgan, doing business as Packard Partners (Packard),
is valid. The Woods, however, claim that all the properties were irrevocably
abandoned to them by operation of law when an order closing the bankruptcy case
was entered before sale of the properties was consummated. In the alternative,
they argue that certain properties were not included in any valid sale, alleging that
in written agreements and conveyances the trustee repeatedly failed to describe in
full detail the numerous properties constituting the revenue stream. They also
insist that some of the oil and gas interests were specifically abandoned to them
by the trustee in a 1987 motion. In order to address these claims, we find it
necessary to lay out the lengthy history of this case in some detail.

A.
In 1987, soon after Kenans appointment as trustee, Maurice Woods
advised Kenan of certain causes of action he believed he had against third parties,
for oil and gas properties which were previously owned by his father and which
he claimed should have been conveyed to him. After examining the merits of
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these claimed causes of action, the trustee determined that pursuing them would
be burdensome to the estate, and on August 3, 1987, filed a motion to abandon
them to the debtors. The United States Bankruptcy Court for the Western District
of Oklahoma approved this motion on August 19, 1987.
On July 10, 1991, the trustees proposed plan of reorganization was
confirmed; it appointed Kenan to administer the plan, pursuing the business of the
estate until such efforts were no longer justified, at which time he was to sell the
estates interest in the oil and gas properties. By April 1993 the trustee had
determined that it was no longer prudent to continue the business of the estate,
and therefore arranged for the sale of the oil and gas properties.
On April 21, 1993, the trustee filed a motion asking the bankruptcy court to
approve a proposed sale. This motion was set for hearing on May 14, 1993. On
May 6, 1993, the case came up for hearing on the bankruptcy courts routine
disposition docket. At this hearing the trustee noted the filing of his Motion to
Approve Sale and reported that the sale of the properties and distribution of the
proceeds would complete the administration of the estate. The bankruptcy court
requested that the trustee file his final report and application for final decree at
the trustees earliest convenience.
At some point, the trustee was approached by additional parties interested
in buying the oil and gas properties, and he successfully requested that the
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hearing on the Motion to Approve Sale be continued until July 9, 1993, so that he
could obtain the highest possible value for the properties; the motion was
eventually heard on August 18, 1993. Nevertheless, on May 13, 1993, the trustee
filed his final report and made application for a final decree. On June 3, 1993,
the bankruptcy court entered a final decree stating that [t]he estate of [the
Woods] has been fully administered, the trustee, Thomas J. Kenan is discharged
as trustee of the estate . . . , and the case is closed. Appellants App. Vol. I at
186.
On July 15, 1993, Kenan filed a document titled Trustees Further
Description of Oil and Gas Properties, referring to his previously filed Motion to
Approve Sale, and describing more fully some of the oil and gas properties of the
estate. When on August 18, 1993, the bankruptcy court held a hearing on
Kenans Motion to Approve Sale filed April 21, 1993, the Woods were present
and represented by counsel. The Woods objected to the sale of the properties, but
not on the ground that the bankruptcy case was already closed. The bankruptcy
court entered an order granting Kenans motion and approving the sale of the
properties described in the April 21, 1993, and July 15, 1993, filings. Kenan
thereafter prepared and delivered instruments of conveyance to the purchasers,
Packard, for the price of $72,000. At some point, Kenans $5,000 trustees bond
was exonerated.
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At some time following the order approving the sale to Packard, the Woods
began sending letters to the entities that were purchasing production from the oil
and gas properties, alleging the following defects in the transfer of the properties:
(1) some properties had not been specifically described in Kenans filings;
(2) some instruments of conveyance, although recorded in the appropriate
counties, had undated notarizations and were therefore void; (3) some or all of the
properties had reverted to the Woods by operation of law. Following these
allegations, some purchasers of production began suspending payments to
Packard. In July 1995, Packard notified Kenan that Maurice Woods had written
to at least two purchasers of production contending that

all transfers from Kenan

to Packard were void because the final decree closing the case was entered before
the bankruptcy courts August 18, 1993, order approving the transfers.

B.
Because of the Woods challenges to the validity of the transfers, on
July 27, 1995, Kenan filed a motion in the bankruptcy court to reopen the Woods
case. On August 22, 1995, the court held a hearing on the motion, and on August
30, 1995, issued an order reopening the case and vacating its prior order closing
the case. In its findings of fact, the court found that any premature closing of the
case was due to inadvertence or excusable neglect, and stated that [c]losing of
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the case occurred [during a time period in which] there was an administrative
effort by the Assistant United States Trustees office, the Clerk, and others to
close old cases. Appellees App. at 5-6. It further determined that the Packard
Partners were bona fide purchasers of the contested properties, that [t]he
actions of the debtors in attempting to upset the rights of the bona fide purchasers
constitute[d] misconduct, and that [i]t would be unjust and inequitable if,
somehow, the debtors were to retain these valuable oil and gas properties at the
expense of the good faith purchasers.

Id. at 6. It also found that [a]ny errors in

the descriptions of the oil and gas properties and any errors in the
acknowledgments of the conveyances to the Packard Partners, [were] harmless
errors. Id.
In its conclusions of law, the bankruptcy court rejected the Woods
argument concerning 11 U.S.C. 554(c). That statute reads as follows:
Unless the court orders otherwise, any property scheduled under
section 521(1) of this title not otherwise administered at the time of
the closing of a case is abandoned to the debtor and administered for
purposes of section 350 of this title.
Reading the opening clause of 554(c) in conjunction with 11 U.S.C. 350(b),
which provides that a bankruptcy case may be reopened for cause, the court
determined that it had authority to reopen the case, and to order[] otherwise,
i.e., to vacate its final decree closing the case in order to settle Packards
ownership of the contested properties. It also relied on Fed. R. Civ. P. 60(b),
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based on the misconduct of the debtors, the mistake, inadvertence, or

excusable neglect of the trustee, the principles of equity, and the windfall to
the debtors that would occur.

Appellees App. at 9-10.

On appeal, the district court affirmed by order dated May 1, 1996. It

reasoned that one purpose for 554(c)s language allowing a court to order[]
otherwise was to provide for the circumstance where the court finds that there
is a valuable asset that should have been administered by the trustee. Appellees
App. at 18. It also held that [b]ecause the bankruptcy courts finding that the
case was prematurely closed due to mistake, inadvertence or excusable neglect is
not clearly erroneous, the bankruptcy court did not err or abuse its discretion in
vacating the final decree and order closing the bankruptcy case.

Id. at 19. We

dismissed the Woods subsequent appeal to this court as a jurisdictionally

defective appeal from the affirmance of an interlocutory order.

Woods v. Kenan

(In re Woods) , No. 96-6181, slip. op. (10th Cir. Feb. 7, 1997).
On March 6, 1997, with the case thus reopened and the prior closing order
vacated, Kenan filed a motion in the bankruptcy court to approve the sale of oil
and gas properties to Packard. These properties included interests that he had

As an alternative rationale, the court cited its 11 U.S.C. 105(a) power

to issue any order, process, or judgment that is necessary or appropriate to carry
out the provisions of this title. 11 U.S.C. 105(a). The district court did not
rely on this ground to affirm the bankruptcy court, and we do not discuss it here.
1

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failed to specifically describe in the earlier motion to approve the sale of oil and
gas properties to the Packard Partners. Trustees Motion of March 6, 1997,
Appellants App. Vol. II at 284. The Woods filed objections to the motion, as
well as their own motion demanding an accounting of revenues from the contested
properties, and a motion asking the court to require Kenan to post bond in the
amount of $200,000.
On April 24, 1997, the bankruptcy court heard evidence on the motions.
The Woods argued that the contested properties had been irrevocably abandoned
to them at the time the case was closed. They also argued that the courts August
19, 1987, order of its own force abandoned certain specific properties and not
merely causes of action. They presented no evidence that they had obtained any
of the contested properties pursuant to the abandoned causes of action. On May
21, 1997, the court issued an order granting Kenans motion to approve the sale of
oil and gas properties to Packard. In its findings of fact, it stated that its order of
August 19, 1987, abandoned only causes of action, not oil and gas properties. In
its conclusions of law, it held that the confirmed plan of reorganization is res
judicata and controls the rights of the parties thereunder. Appellees App. at 28.
It held that [t]he trustee has authority under the confirmed plan of reorganization
to sell these properties to the Packard Partners. The earlier, inadvertent closing
of the case is immaterial, because the case has been reopened.
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Id. Relying on

the provisions of the confirmed plan, the court also held that Kenan was not
required to post a bond or to provide an accounting. After the court had
announced its ruling approving the trustees sale to Packard, the Woods asked to
bid on the properties. The court responded, Well, theyve been sold. . . . And if
the Woods want to buy them, I guess, they can go to Packard. Appellants App.
Vol. I at 115.
Undeterred, the Woods appealed to the BAP. Applying the law of the case
doctrine, the BAP refused to reach issues related to the bankruptcy courts August
30, 1995, ruling reopening the case and vacating the final decree, stating that
those issues would need to be addressed on appeal to the Tenth Circuit.
v. Kenan (In re Woods) , 215 B.R. 623, 626 (B.A.P. 10th Cir. 1998).

Woods
However, it

held that (1) disallowing the Woods bid on April 24, 1997, did not violate due
process; (2) Kenans March 6, 1997, Motion to Approve Sale was not void for
lack of a bond, under the confirmed plan; and (3) the bankruptcy court properly
concluded that its August 19, 1987, order did not affect the sale to Packard,
because the order abandoned only causes of action, and because the Woods
failed to produce any evidence that they received properties pursuant to those
causes of action.

Id. at 627.

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Before this court, the Woods again argue that apart from any considerations
of fairness and equity, Appellants Br. at 8, they are entitled by operation of
law to the contested oil and gas properties.

II. DISCUSSION
The BAP was correct in observing that despite its own deference, under the
law of the case doctrine, to the district courts order of May 1, 1996, we are not
bound by that ruling. So long as a matter is properly preserved in [a] lower
court, the fact that the lower court can properly refuse reconsideration as a matter
of law of the case of course does not prevent subsequent review . . . on appeal.
18 Charles Alan Wright et al.,

Federal Practice and Procedure

(1981); cf. Christianson v. Colt Indus. Operating Corp.

4478, at 801

, 486 U.S. 800, 817 (1988)

([A] district courts adherence to law of the case cannot insulate an issue from
appellate review.). The Woods properly preserved their challenges to the district
courts order by raising them before the BAP. Therefore, in addition to the issues
ruled on by the BAP, we also reach issues which the district court decided but
which the BAP declined to address, relating to the bankruptcy courts order of
August 30, 1995.

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A. Technical Abandonment under 554(c)

1.
When the Woods case was closed on June 3, 1993, the contested properties
were abandoned to the Woods by operation of law and were deemed fully
administered. The trustee does not appear to argue to the contrary. Under
554(c), a technical abandonment is necessarily the effect of the closing order,
regardless of the trustees intentions. At the time of closing, the court had not
order[ed] otherwise; the property was scheduled; and the property, although in
the process of administration, had not been otherwise administered.

See, e.g. ,

In re Shelton , 201 B.R. 147, 155 (Bankr. E.D. Va. 1996) ([T]here appears little
doubt that [the trustee] technically abandoned the [contested p]roperty under
554(c) when he failed to administer that asset prior to the closure of [the]
case.); Stanley v. Sherwin-Williams Co.

, 156 B.R. 25, 27 (W.D. Va. 1993) (It

would be neither desirable nor consistent with 554 to resolve abandonment

questions by returning to the uncertain practice of attempting to determine the
trustees intentions.).

Contra In re Schmid , 54 B.R. 78, 79-80 (Bankr. D. Or.

1985) (The trustee did not intend to abandon the lawsuit under . . . 554(c).
Consequently, there was no abandonment. . . . Inadvertence should not
accomplish an abandonment under circumstances where abandonment would not
have been allowed had it been requested before closing.);
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Mele v. First Colony

Life Ins. Co. , 127 B.R. 82, 86 (D.D.C. 1991) ([I]t must also be shown that the
abandonment of a claim is the result of an intelligent decision by the trustee.
(quoting Schmid , 54 B.R. at 80)).

2.
The crucial issue in this case is whether and under what circumstances the
technical abandonment was revocable. Courts have taken varying approaches to
this issue. Some courts have held, as did the bankruptcy and district courts in this
case, that 554(c) by its terms allows a court broad power to modify or revoke a
technical abandonment once a case is reopened under 350(b), because a court
may simply order[] otherwise after the fact.
825, 832 (D.N.J. 1996);

See Neville v. Harris , 192 B.R.

Shelton , 201 B.R. at 155 (alternative holding) (citing

Neville ); DeVore v. Marshack (In re DeVore)

, 223 B.R. 193, 198 (B.A.P. 9th Cir.

1998) (citing Neville and Shelton ). Others have held that the reopening of a case
under 350(b) automatically revives the original case and negates any technical
abandonments. See Compass Bank for Savings v. Billingham (In re Graves)
B.R. 692, 695-96 (B.A.P. 1st Cir. 1997);

, 212

Shelton , 201 B.R. at 155-56 (alternative

holding); Figlio v. American Mgmt. Servs., Inc. (In re Figlio)

, 193 B.R. 420,

424-25 (Bankr. D.N.J. 1996) (indulging the fiction that a reopened case was
never closed). Still others have held that technical abandonments of scheduled
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property known to the trustee are irrevocable.

See, e.g. , Huntington Natl Bank v.

Hunter (In re Hunter) , 76 B.R. 117, 118-20 (Bankr. S.D. Ohio 1987);

In re

Atkinson , 62 B.R. 678, 679-80 (Bankr. D. Nev. 1986).

We disagree with each of these approaches. The first approach is unsound
because as we read it, 554(c) does not speak to the issue of whether an
abandonment is revocable. In fact, it says nothing about what happens after a
technical abandonment. It states only that a court may prevent a technical
abandonment by order[ing] otherwise.
(Bankr. C.D. Cal. 1989)

Cf. In re Prospero , 107 B.R. 732, 734

(order[ing] otherwise at the closing of case);

In re

Hart , 76 B.R. 774, 778 (Bankr. C.D. Cal. 1987) (same). That is, under certain
conditions, a technical abandonment will

occur at the closing of a case [u]nless

the court orders otherwise; the statute does not state that a technical
abandonment will remain in effect [u]nless the court orders otherwise.
We disagree with the second approach because we do not think reopening a
case should always automatically

have such a potentially unexpected and

Some cases purporting to adopt this approach do so by reading into a

courts reopening order an intent to accomplish a revocation. See, e.g., Shelton,
201 B.R. at 156 ([T]he very act of reopening the closed case under these
circumstances implicitly acknowledges the Courts reasoned determination that
the otherwise abandoned property should be returned from the debtor to the
debtors estate for potential administration by the trustee.); In re Graves, 212
B.R. at 695 (We find it important that the bankruptcy judge did not limit the
purpose for which the reopening was taking place when he reopened the case.).
(continued...)
2

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unwanted legal consequence. We see no reason, for example, why a debtor

seeking to reopen a case in order to schedule an overlooked debt should have to
relinquish all technically abandoned properties (which may have in the meantime
increased in value through the debtors efforts); or why, after an intentional
technical abandonment, reopening should always bring burdensome properties
back into the estate.

See DeVore , 223 B.R. at 198 (We fail to see how the

reopening of a bankruptcy case and withdrawal of a no asset report, without more,

negate a valid technical abandonment. The reopening of a case is merely a
ministerial or mechanical act [that] . . . has no independent legal significance and
determines nothing with respect to the merits of the case. (quoting
Germaine , 152 B.R. 619, 624 (B.A.P. 9th Cir. 1993));

In re

cf. Fed. R. Bankr. P. 5010

advisory committees note (1991) (In most reopened cases, a trustee is not
needed because there are no assets to be administered.). Moreover, 350(b)
does not indicate what effect reopening has on technical abandonments, and it
does not by its terms provide authority to revoke an abandonment.

(...continued)
In this respect, these cases are similar to those that rely on a courts power to
order[] otherwise under 554(c).
2

Although under 350, [a] case may be reopened in the court in which
such case was closed to administer assets, technically abandoned assets are by
the terms of 554(c) already deemed administered. Reopening to administer
assets is possible only when there are assets unknown to the trustee at the time
the case was closed. See 3 Lawrence P. King et al., Collier on Bankruptcy
(continued...)
3

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We disagree with the third approach because it is simply an overbroad

application of the general rule that [o]nce properly accomplished, an
abandonment is irrevocable.

3 William L. Norton Jr.,

Norton Bankruptcy Law

and Practice 53:2 (2d ed.1995 & supp. 1998). Unlike an abandonment under
554(a)-(b), which by very definition must be intentional and unequivocal and to
which the general rule of irrevocability applies rather strictly,

see, e.g. , In re

Gibson , 218 B.R. 900, 904 (Bankr. E.D. Ark. 1997), a technical abandonment may
occur inadvertently as an automatic consequence of premature case closing.
Thus, abandonment under 554(c) is merely a rebuttable presumption. If a party
in interest objects and the considerations that would have justified abandonment
prior to the closing of the case do not exist, the court has discretion to reopen the
case and order further administration. 3 Norton,

supra , at 53:3.

(...continued)
350.03[1] (15th ed. rev. 1998).
3

Cases purporting to apply a broad rule of irrevocability to technical

abandonments typically involve one or more factors cutting against revocation,
such as reliance interests, see In re Atkinson, 62 B.R. at 679-80 (noting that
debtors had pursued an abandoned cause of action at significant expense), or a
conscious decision by the trustee to accomplish the abandonment, see In re
Hunter, 76 B.R. at 120.
4

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Thus, we conclude that a strict irrevocability rule does not properly account
for Fed. R. Bankr. P. 9024, which provides that Fed. R. Civ. P. 60 applies, with
minor modifications,

to all bankruptcy cases.

Under Fed. R. Civ. P. 60(b),

[o]n motion and upon such terms as are just, the court may relieve a party or a
partys legal representative from a final judgment, order, or proceeding . . . .
While we agree with the many courts that have held that a bankruptcy court may,
in appropriate circumstances, revoke a technical abandonment, we do so on the
basis of Fed. R. Bankr. P. 9024 and Fed. R. Civ. P. 60(b).
54 B.R. 78, 81 (alternative holding);

See, e.g. , In re Schmid ,

see also In re Sutton , 10 B.R. 737, 740-41

(Bankr. E.D. Va. 1981) (discussing Rule 60(b) but declining to revoke an
abandonment); cf. In re Ozer , 208 B.R. 630, 633-34 (Bankr. E.D.N.Y. 1997)
(noting that courts have allowed revocation of technical abandonments in certain
instances, if the abandonment takes place due to particularly relevant clerical
mistake or inadvertence of the trustee);

In re Lintz West Side Lumber, Inc.

, 655

F.2d 786, 789-91 & nn. 4-6 (7th Cir. 1981) (decided under the Bankruptcy Act of
1898) (relying in part on Rule 60(b) for revocation of an abandonment order,
One such modification is that a motion to reopen a case . . . is not subject
to the one year limitation prescribed in Rule 60(b). Fed. R. Bankr. P. 9024.
5

The Woods argue that Rule 60(b) is inapplicable to this case because the
general equitable powers of the bankruptcy courts cannot be exercised to
circumvent the specific legislative directive in 11 U.S.C. 554(c). Appellants
Br. at 37. We reject this argument, for as we have pointed out, 554(c) says
nothing about the revocability of technical abandonments.
6

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where there has been a mistake in the original abandonment and where the
purported [owner] has not been unfairly prejudiced.).

3.
Here the bankruptcy court first reopened the case under 350(b) and then
relied on Rule 60(b) to vacate its prior closing order. We review a courts
decision to reopen a case under 350(b) only for an abuse of discretion.
Nintendo Co. v. Patten (In re Alpex Computer Corp.)

See

, 71 F.3d 353, 356 (10th Cir.

1995); In re Bianucci , 4 F.3d 526, 528 (7th Cir. 1993). Section 350(b) provides
that [a] case may be reopened in the court in which such case was closed to
administer assets, to accord relief to the debtor, or for other cause. We have no
trouble concluding that if Rule 60(b) relief was available and warranted, the court
was justified in reopening the Woods case for cause.

See In re Shondel , 950

F.2d 1301, 1305 (7th Cir. 1991) ([A] bankruptcy court exercises equitable
powers and . . . should emphasize substance and not technical considerations that
will prevent substantial justice. . . . [C]ounsel neglect or mistake . . . may be a
factor in the finding of other cause under 350(b) (citations and internal
quotes omitted)). The issue of the propriety of Rule 60(b) relief, however,
requires a more searching analysis.
Rule 60(b) provides in relevant part:
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On motion and upon such terms as are just, the court may relieve a
party or a partys legal representative from a final judgment, order,
or proceeding for the following reasons: (1) mistake, inadvertence,
surprise, or excusable neglect; (2) newly discovered evidence . . . ;
(3) fraud . . . , misrepresentation, or other misconduct of an adverse
party; (4) the judgment is void; (5) the judgment has been satisfied,
released, or discharged, or a prior judgment upon which it is based
has been reversed or otherwise vacated, or it is no longer equitable
that the judgment should have prospective application; or (6) any
other reason justifying relief from the operation of the judgment.
Although the bankruptcy court did not specify by number which subsections of
Rule 60(b) grounded its decision, it apparently relied on subsections (1) (based on
mistake, inadvertence, or excusable neglect,), (3) (based on the misconduct of
the debtors,), and (6) (based on the principles of equity, and the windfall to
the debtors that would occur). Appellees App. at 9-10. Even assuming the
Woods are correct regarding the inappropriateness of Rule 60(b)(3) relief in this
case, see Appellants Br. at 18-20, we think the bankruptcy court was fully
justified in relying on either Rule 60(b)(1) or Rule 60(b)(6).
Because the trial court is vested with a great deal of discretion in
determining whether to grant or deny a Rule 60(b)(1) motion, we will not
overturn that determination absent abuse.

Otoe County Natl Bank v. W & P

Trucking, Inc. , 754 F.2d 881, 883 (10th Cir. 1985). We note the bankruptcy
courts finding that premature closing of the case was due to inadvertence or

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excusable neglect, Appellees App. at 6, a finding that was upheld by the district
court and that we have no reason to question.

While it is true that Rule 60(b)(1) relief is generally not available for the
mere carelessness of a party,

see Pelican Prod. Corp. v. Marino

, 893 F.2d 1143,

1146 (10th Cir. 1990), something more than that was involved here. In the spring
of 1993, Kenan was actively discharging the trust, seeking to obtain the highest
price for the contested properties, and he so notified the court in his first Motion
to Approve Sale.

The court, while this motion to approve a sale of estate

properties was still pending, nevertheless told Kenan to enter a request for a final
decree, and then itself entered that decree prior to hearing the pending motion. In
hindsight, Kenan likely wishes he had waited until after the sale to enter his
request for a final decree; perhaps at the time he expected the court to wait to act
on the request until after it had heard his motion. In any event, Kenan made his
The Woods argue that [t]here was clearly no inadvertence or neglect in
the Trustees actions to close this case, and that it is obvious that the Trustee
was fully aware of the consequences of his actions in filing an application to
close this Chapter 11 case. Appellants Br. at 33, 36. The record indicates that
neither the trustee nor the Woods nor even the court were so enlightened. Given
the fact that the trustee attempted a post-closing sale to Packard, which the
bankruptcy court approved (with the Woods present and silent as to the effect of
the case closing, see Appellees App. at 3), their present arguments on the issue
of inadvertence do not appear to be made in good faith and are not well taken.
7

Thus this was not a case where inadvertence resulted from lack of
diligence. See 12 James Wm. Moore et al., Moores Federal Practice
60.41[1][c][ii] (3d ed. 1998).
8

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unfortunate filing at the courts behest, in a period in which, as the bankruptcy

court found, the clerk was pushing to close cases such as this one.

In these

circumstances, any neglect by the trustee was excusable. Furthermore, we note

that the bankruptcy court has power under Rule 60(b)(1) to correct its own
inadvertent errors.

See 12 James Wm. Moore et al.,

60.41[3] (3d ed. 1998);

Moores Federal Practice

see also Fed. R. Civ. P. 60(b) advisory committees note

(1946). We think the bankruptcy courts exercise of Rule 60(b)(1) power was
most appropriate.
We also uphold the bankruptcy courts reliance on Rule 60(b)(6), a grand
reservoir of equitable power to do justice in a particular case.

Pierce v. Cook &

Co. , 518 F.2d 720, 722 (10th Cir. 1975) (en banc). Rule 60(b)(6) relief is

Apparently the court, the trustee, and the debtors initially treated the case
closing as of little consequence; and the bankruptcy court reasoned, in its order
reopening the case, that [c]losing a case is basically a matter of administration
allowing the clerk to close the files and ship them off to the archives.
Appellees App. at 9. One circuit court has noted that
9

there is some confusion at the bankruptcy court regarding the closing

of cases. We are told that the clerk has been delegated the authority
to close cases, but that the clerk only does so when it is deemed that
a reasonable time has passed without case activity. . . . It is also
suggested that the closing of a case is ministerial at times. . . . On the
other hand, in this matter it is quite clear that the bankruptcy judges
did not consider the case to be closed at all, and the parties did not
consistently behave as if it were.
Schwaber v. Reed (In re Reed), 940 F.2d 1317, 1321-22 n.4 (9th Cir. 1991).
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appropriate . . . when it offends justice to deny such relief,

Cashner v. Freedom

Stores, Inc. , 98 F.3d 572, 580 (10th Cir. 1996), and will be reversed only if we
find a complete absence of a reasonable basis and are certain that the . . . decision
is wrong, State Bank of S. Utah v. Gledhill (In re Gledhill)
(10th Cir. 1996).

, 76 F.3d 1070, 1080

Here it would have been unjust to allow the June 3, 1993, final

decree and the resulting technical abandonment to stand, because it would have
allowed the Woods to benefit from their own delay at the trustees expense. The
Woods did not raise a claim of technical abandonment at the August 18, 1993,
hearing or for a considerable time thereafter. In the meantime, Kenan transferred
the contested properties to Packard and distributed the proceeds to the Woods
creditors. To award the properties to the Woods at this late date would most
certainly be contrary to the principles of equity. Appellees App. at 10.
The authority to revoke an abandonment under Rule 60(b) is circumscribed,
of course, by the standards governing Rule 60(b) relief. Specifically, because
Rule 60(b) is inherently equitable,

see In re Gledhill , 76 F.3d at 1078, the

granting of Rule 60(b) relief may be challenged on equitable grounds. For

example , revocation may not be warranted where it would unfairly prejudice the
purported owner of the property.
The Woods raise claims of laches and estoppel. They emphasize the fact
that at some point the trustee apparently believed and made statements to the
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effect that a technical abandonment had occurred. They claim that they
detrimentally relied on the trustees actions, that they were prejudiced by their
receipt of oil and gas revenues from producers to whom they had written, and
were prejudiced in believing that the Trustee would not be challenging the
Woods assertions. Appellants Br. at 26.
We conclude that the Woods have no equitable claim to these properties.
Under the confirmed plan, the properties were supposed to be sold to pay
creditors; the estate was far from having a surplus to return to the Woods.
Furthermore, as we have emphasized, the Woods themselves failed to raise the
issue of abandonment for many months after the case was closed, and when they
did raise the issue, it was not with the court or the trustee or even the purchasers.
Rather, the Woods wrote to the oil and gas producers in dogged attempts to obtain
the very revenues which they now claim prejudiced them. The Woods have
attempted to take every potential advantage of the inadvertent closing of this case.
We discern no equitable principle that would allow the Woods any further benefit
from that mistake. For similar reasons, we do not sympathize with the Woods
claims that the bankruptcy courts rulings threaten finality and deny the Woods a
fresh start. Appellants Br. at 38. If finality has been disrupted, we do not
think it is the court that is to blame.

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We therefore conclude that the bankruptcy court acted appropriately in

reopening the Woods case under 350(b), and that under Fed. R. Civ. P. 60(b)
the courts order vacating the prior closing order was not an abuse of discretion.
The vacatur of the closing order effectively revoked the prior abandonment and
enabled the court to approve Kenans March 7, 1995 motion to sell the properties
to Packard, finalizing what was required by the confirmed plan of
reorganization.

10

B. Bond
The Woods claim that Kenans March 7, 1995 motion was void because he
did not have a bond in place. They argue that the bankruptcy court erred by not
granting their request under 11 U.S.C. 322(a) to require a $200,000 bond of Mr.
Kenan upon reopening of the case. We agree with the BAP and the bankruptcy
court that at the time the case was reopened, Kenan was serving not as Chapter 11
trustee, but as post-confirmation trustee under the terms of the confirmed plan,
which did not require him to post a bond.

See 11 U.S.C. 1141(a) ([T]he

Because we uphold the courts approval of Kenans March 7, 1995,

motion, the Woods argument that they are entitled to properties not described in
previous motions or notices must fail. That the March 7, 1995, motion included
properties not described in previous documents is irrelevant.
10

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provisions of a confirmed plan bind the debtor . . . .). By its very terms,
322(a) does not govern the appointment of a post-confirmation trustee:
[A] person selected under section . . . 1104 . . . of this title to serve
as trustee in a case under this title qualifies if before five days after
such selection, and before beginning official duties, such person has
filed with the court a bond in favor of the United States conditioned
on the faithful performance of such official duties.
11 U.S.C. 322(a) (emphasis added). Section 1104 governs the appointment of
trustees [a]t any time after the commencement of the case but

before

confirmation of a plan . 11 U.S.C. 1104(a). Thus the Woods argument fails.

C. Abandonment Order
The Woods assert that [i]ncluded within the list of oil and gas properties
ordered sold by the Bankruptcy Court on May 20, 1997 were some properties
previously ordered abandoned to the Woods on August 19, 1987. Appellants
Br. at 30. Contrary to this assertion, the BAP and the bankruptcy court both
determined that the 1987 order abandoned only the causes of action disclosed by
Mr. Woods, not the underlying properties. Reviewing only for clear error,
Rowe Intl, Inc. v. Herd (In re Herd)

see

, 840 F.2d 757, 759 (10th Cir. 1988), we

uphold this finding. That the 1987 order abandoned only causes of action is
evident from the closing paragraphs of Kenans brief in support of his motion to
abandon:
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Accordingly, the trustee believes that these claims should be

abandoned to Maurice G. Woods in order that he might pursue them
as he might deem fit. Some of the claims may be facing the
expiration of a period during which they must be brought, and
Maurice Woods should be given the opportunity to persuade another
attorney to file these claims at this time on a contingency fee basis.
Accordingly, because of the burden to the estate of paying for
this uncertain litigation, the trustee believes he is justified in
abandoning these claims to the debtor, Maurice G. Woods.
Appellants App. Vol. I at 164.
We must agree with the Woods that [c]ertainly, had the Woods been
forced to litigate those claims and been given a judicial award of those property
interests, the Bankruptcy Court could not have then reacquired them for the
estate. Appellants Br. at 31. Yet at every stage of the present litigation, the
Woods have chosen not to explain when or how they acquired the properties.
They have produced no evidence of a settlement agreement or anything of the
kind. The bankruptcy court determined that the properties were subject to sale by
the trustee because there was no evidence that they were acquired as a result of
the abandoned causes of action. The BAP agreed with this conclusion. So do we.

D. Disallowance of Bid
The Woods argue that the Bankruptcy Courts May 21, 1997, Order violates
due process by disallowing them the opportunity to bid under 363 during the

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sale of their oil and gas properties. This is a meritless argument. We agree with
the BAPs resolution of this issue:
Debtors clearly had adequate notice and the opportunity to be heard.
They waited until the Bankruptcy Court had ruled on the second
11
] The
motion to sell before voicing a desire to bid on the property.[
Bankruptcy Courts refusal to entertain this request at this stage of
the proceeding did not deprive the Debtors of due process.
Appellees App. at 37.
Accordingly, we AFFIRM.

Counsel for the Woods admitted at the hearing, I was hoping my

objection would be sustained; and, therefore, we wouldnt need to try to purchase
[the properties], you would abandon them to us. Appellants App. Vol. I at
115-16.
11

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