However, the district court (where the litigation was pending) erred in dismissing the lawsuit when the bankruptcy trustee was not substituted as the real party in interest.  The court failed to consider: (i) whether the debtor/plaintiff had a reasonable amount of time to add the trustee, (ii) the fact that limitations had run and (iii) the fatal effect of dismissal on the debtor/plaintiff's creditors.

A creditor's appeal of the bankruptcy court's erroneous ruling was not moot even though one-half of the assets had been distributed.  Relief on appeal could still be fashioned, since: (1) the case could be converted to one under Chapter 7 with the attendant appointment of a trustee, (2) the case could be dismissed, or (3) it could be maintained in its current mode as a Chapter 11, with or without the appointment of a trustee. A trustee, if appointed, might discover additional assets, perhaps in the form of avoidable transfers, or the trustee might seek disgorgement, particularly from professionals, of disbursements that have already been made.  Mootness on appeal is not established merely by proof that the appellate court cannot return the parties to the status quo ante.  If it is conceivable that an appellant could improve its position if it prevails, mootness cannot thwart the appeal.

The bankruptcy court erred in entering a new monetary judgment in a dischargeability action in which a prepetition State court judgment was declared nondischargeable.  The bankruptcy court's judgment was properly vacated, and because the applicable State statute of limitations for enforcement of judgments had expired, no further collection could occur with respect to the nondischargeable judgment.