In re: Armstrong World Industries, Inc v. Cohen, 392 U.S. 83, 95 1968 . See California v. San Pablo & T.R. Co., 149 U.S. 308…

*Honorable William W Schwarzer, Senior District Judge, Northern District of
California sitting by designation.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-1057
IN RE: ARMSTRONG WORLD INDUSTRIES, INC.,
Debtors
ARMSTRONG WORLD INDUSTRIES, INC.,
Appellant
___________________
On Appeal from the United States
District Court for the District of Delaware
District Court Number: 00-04471
District Judge: Hon. Joseph J. Farnan, Jr.
Submitted Pursuant to Third Circuit LAR 34.1(a)
February 13, 2003
BEFORE: ALITO, McKEE, Circuit Judges & SCHWARZER District Judge*
(Filed July 20, 2004)
OPINION
McKee, Circuit Judge
Armstrong World Industries, Inc. (“AWI”) appeals from the December 10, 2001
Memorandum Order (“December Order”) of the United States District Court for the

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District of Delaware, granting relief from the automatic stay set forth in 11 U.S.C. § 362.
The December Order permitted the “Maertin Plaintiffs” to proceed with their action
against AWI outside of the bankruptcy court process based upon the findings the court set
forth in its December Order. This appeal eventually followed.
I.
Inasmuch as we write only for the parties who are familiar with the factual
background and procedural intricacies of this case, we will not reiterate the facts or
procedural posture except as may be necessary to our brief discussion.
AWI raises three issues on appeal. It argues that the District Court erred in
granting relief from the automatic stay by misapplying the applicable standard under §
362(d)(1) and concluding that AWI was solvent. Second, it argues that the court erred as
a matter of law in granting relief from the automatic stay; and third, it argues that the
court “abuse[d] its discretion or commit[ted] a plain error of law in making ostensible
factual findings . . . without an evidentiary record . . . and without permitting the parties
to make such a record [].” Appellant’s Br. at 5.
II.
Although AWI’s brief sets forth three separate issues on appeal, the arguments are,
in reality, alternative statements of AWI’s contention that the District Court erred in
granting relief from the automatic stay.
After the District Court granted the plaintiffs’ motion for relief from the automatic

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stay, and following additional proceedings in Delaware and New Jersey, the parties
entered into a stipulation before the Bankruptcy Court, and that court entered an order
approving that stipulation on May 3, 2002 (the “Stipulation”). Pursuant to the terms of
that Stipulation, the parties agreed that “The Maertin Plaintiffs may proceed with the
Civil Action and pursue any rights that they may be permitted under applicable state and
federal law in connection with that action, in state or federal court.” App. I-A72. The
Stipulation further provided that “notwithstanding [the aforementioned agreement], the
automatic stay shall remain in effect with respect to, . . . any claims, judgment or
settlement against AWI . . . other than with respect to the Insurance Policies or the
Insurance Proceeds.” Id. Thus, the Maertin Plaintiffs must first seek approval of the
Bankruptcy Court before attempting to collect “any claims against AWI . .. other than
insurance policies.”
AWI’s challenge to the December Order is grounded on AWI’s contention that the
Maertin Plaintiffs should not be allowed to attempt to collect their prepetition, unsecured
claims against AWI’s estate outside of the bankruptcy process. The May 3 Stipulation
resolves that issue. By agreeing that the plaintiffs may proceed against the insurance
proceeds at issue with a reservation that they must seek approval of the Bankruptcy Court
for any other relief, AW I’s appeal is mostly mooted as the Maertin Plaintiffs quite
correctly note in their brief. See Brief at 4-5. See also Flast v. Cohen, 392 U.S. 83, 95
(1968). See California v. San Pablo & T.R. Co., 149 U.S. 308 (1893).

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We can, for the most part, dispose of any remaining issues by noting that the District
Court explained why relief from the automatic stay was appropriate as well as the findings of
fact supporting that relief in its December Order. We can affirm substantially for the reasons
set forth therein. AWI does not allege that the District Court applied the wrong standard, only
that it misapplied the appropriate standard by finding “cause” to lift the stay under the three
prong inquiry set forth in Int’l Business Machines v. Fernstrom Storage and Van Co., 938
F.2d 731, 734-37 (7th Cir. 1991) without a proper evidentiary record. The Maertin Plaintiffs
represent, without contradiction that “AWI acquiesced throughout the entire proceedings
below to limit the record to legal argument[.]” Brief at 28. The Martin Plaintiffs therefore
argue that AWI can not now complain about insufficient support for the equitable inquiry
under In re Wilson, 116 F.3d 87, 89 (3d Cir. 1997), and similar cases cited in AWI’s brief.
See AWI’s Brief at 16. We agree.
When the court afforded AWI an opportunity to present witnesses, the court was
informed that the parties were working toward an agreement that would allow the Maertin
Plaintiffs to collect the prepetition claims from AWI’s insurance policies. See App. Vol II,
A65-6, and A73. Accordingly, the court acquiesced and allowed additional time for the
parties to enter into a stipulation that would satisfy the settlement agreement from those
policies outside of the bankruptcy proceedings. We will not now allow AWI to hoist the
Maertin Plaintiffs on the petards of the very settlement the parties negotiated to resolve the

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1Although AWI’s appeal seeks to reverse the December Order, the Stipulation that
AWI knowingly entered into with the M aertin Plaintiffs has precisely the same result
insofar as the insurance policies are concerned. Plaintiffs are attempting to satisfy the
settlement agreement from the proceeds of those policies and only those policies. Thus,
AWI is inviting this court to void the Stipulation it willingly negotiated. That is an
invitation we must enthusiastically decline.
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issues raised in this appeal and before the Bankruptcy Court.1
III.
Before concluding we need to briefly address one remaining issue. In its January 16,
2003 letter brief, AWI attempts to suggest that the Stipulation does not render its appeal moot
because it does not address the appropriate standard of review “the Bankruptcy Court should
apply” if the Maertin Plaintiffs apply for relief beyond the scope of the insurance policies.
That “argument” appears, at best, disingenuous. No such issue was raised in AWI’s brief to
us, nor could it have been. To the extent that any such issue exists, it is best resolved by the
Bankruptcy Court if, and when, the Maertin Plaintiffs apply for such relief. We can not, and
will not, allow AWI to breathe life into this largely mooted appeal by raising that specter for
the first time before us. See In re Rickel Home Centers, Inc., 209 F.3d 291, 307 (3d Cir.
2000).
IV.
Accordingly, for all the reasons set forth herein, we will affirm the December Order.

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