Following a sale hearing which approved "the largest, most expedited and probably the most dramatic asset sale that has ever occurred in bankruptcy history," the debtor and seller executed, and filed on the docket, a "clarification letter." Although the clarification letter was referred to in general terms during the sale hearing, the terms of the final clarification letter were never disclosed to, or approved by, the court. The clarification letter was a critically important transaction document which contains provisions that are either radically different from anything presented at the sale hearing or in actual conflict with statements made during that hearing. The clarification letter entitled the buyer to billions of dollars of cash from the seller.

A year after the sale, the debtors, committees and SIPA trustee brought Rule 60 motions seeking to invalidate the buyer's rights under the clarification letter. Although, in retrospect, the clarification letter resulted in a glaring problem of flawed disclosure, Rule 60 relief was not warranted, since movants failed to prove that full disclosure would have changed the outcome of the sale hearing or altered the form and content of the sale order in any material respect

Following the free and clear bankruptcy sale of a golf course, the buyer began using the property for purposes other than a golf course. Surrounding landowners sued in State court to enforce restrictive covenants requiring the property to be used only as a golf course. The State Supreme Court ultimately ruled that: (i) the covenants required that the property could only be used as a golf course and (ii) bankruptcy sale law could not vitiate that restriction. The buyer then moved to reopen the bankruptcy case for the purpose of seeking a different answer to the bankruptcy question (i.e., voiding the State Supreme Court's ruling on the effect of the free and clear bankruptcy sale). The bankruptcy court did not err in denying the motion to reopen. The State court judgment was entitled to full faith and credit protection and the bankruptcy court would have been bound to follow it.

In general, a judgment is entitled to full faith and credit — even as to questions of jurisdiction — when the second court's inquiry discloses that those questions have been fully and fairly litigated and finally decided in the court which rendered the original judgment. Interests of finality and comity preclude a collateral attack on the first court's decision as to jurisdiction, even if incorrect. A bankruptcy exception to this rule exists where the bankruptcy court has exclusive jurisdiction over a controversy. However, in this case, the State court had concurrent jurisdiction, along with the bankruptcy court, to interpret the meaning and effect of the sale order.