Excerpt:
Capital providers, whether they are buyers or lenders, are indispensable to the function of our bankruptcy system. Section 363(m)3 of the Bankruptcy Code4 protects a “good faith” buyer of property under Sections 363(b) or 363(c)5 of the Bankruptcy Code. Section 364(e)6 protects a “good faith” lender with respect to an extension of credit made under any of several sub-sections of Section 364 of the Bankruptcy Code. Sections 363(m) and 364(e) each operate to reward a party providing capital to a bankruptcy estate by limiting the ability of an aggrieved party to upset an approved transaction on appeal, once the non-debtor party has funded. Sections 363(m) and 364(c) of the Bankruptcy Code accomplish this through the doctrine known as “statutory mootness.”