FAIRCHILD, Circuit Judge.
Appeals from an order of the district court approving a sale in a chapter X reorganization proceeding. The appellants are bidders whose bids were rejected.
The debtor, H. R. Weissberg Corporation owns several hotels, including the Edgewater Beach Hotel at Chicago. The trustee concluded and the court decided that sale of the Edgewater Beach property other than pursuant to a plan of reorganization is appropriate. No one challenges this conclusion nor the underlying evaluation of circumstances.
The Edgewater Beach property is subject to encumbrances totalling about $7,000,000, including three mortgages, a furniture security agreement, mechanics’ liens, and taxes. The property had been damaged by fire. The trustee has brought action against the insurer in which the trustee claims in excess of $350,000. The insurer appears to have offered some $72,000. In September, 1968 the trustee received an offer of $100,000 for his equity, if the trustee kept the insurance claim; $200,000, if the buyer got it. The buyer would also indemnify the trustee from lienholders’ claim for deficiency.
The court ordered a sale October 9; it was widely advertised and bidding took place before the court. There was no bid for the property free and clear of encumbrances. The highest bid received was $410,000 for the equity, with the buyer receiving the insurance claim, but without the buyer’s agreement to indemnify. The court rejected all bids and authorized the trustee to sell at public or private sale, subject to court approval.
The trustee elected to invite sealed bids, to be opened at a hearing before the court November 22. Counsel for the trustee announced that after he opened and read the bids there would be a recess, after which a further bid could be made, followed by evaluation of the bids. Later in the hearing he said: “I think the spirit and the basis upon which these bids are being offered today are with finality.”
During the course of the transactions referred to, from September 6 to November 22, the bids were for the trustee’s equity in the property, except for one bid (Rosenthal and Dunbar) for the property free and clear of encumbrances. Some of the bids for the equity contemplated that the purchaser would receive the fire insurance claim, but some did not. Some of the bids for the equity included an agreement by the bidder to indemnify the estate from claims for deficiency on behalf of holders of encumbrances. Trustee’s counsel had indicated that the indemnity agreement had significant value to the estate. The variations just referred to made comparison of bids difficult.
The bid which the court approved and ordered the trustee to accept is referred to as the Holleb bid, since Attorney Marshall M. Holleb is the nominee for the bidders. As presented after the recess November 22, it was an offer of $800,000 for the trustee’s equity, and included an agreement to indemnify. With respect [1184]*1184to the insurance claim, it was in the alternative: the trustee could keep the insurance claim, or could transfer it to Holleb at a price to be mutually agreed upon. By letter dated November 27, the Holleb bidders agreed to pay the trustee’s price of $200,000 for the insurance claim. Letters dated December 2 further supplemented or clarified the Holleb offer in respects which need not be considered here. He had deposited $100,000 November 22.
Appellant Shlensky, whose last November 22 bid was $960,000 for the equity and the insurance claims, without an agreement to indemnify, asserts that his bid, as made or modified December 6, should have been deemed highest and best. He asks that we reverse, with directions to orcor his December 6 bid accepted. It was an offer of $960,000 for the equity, with the trustee permitted to retain the insurance claim, and with an agreement by Shlensky to indemnify. He had deposited $25,000 November 22, but increased it to $100,000 December 6.
Appellants Rosenthal and Dunbar do not assert that their free and clear bid, made November 22, was highest and best. They argue that under the circumstances the sale was not fair and impartial; that we should reverse with directions to reopen the sale “subject to firm and specific guide lines.”
Four bids were submitted November 22: Holleb, Shlensky, Rosenthal-Dunbar, and D’Angelo. It is unnecessary to consider the details of the latter two. Rosen-thal and Dunbar bid $8,150,000, free and clear, with the final payment in four years. D’Angelo bid $878,000 for the equity, would receive the insurance claim, and would indemnify. He announced withdrawal at the hearing on confirmation. No one challenges the conclusion that Rosenthal-Dunbar and D’Angelo were inferior to the other two. Holleb’s November 22 bid was better than Shlensky’s of the same date with respect to the indemnity provision and the deposit of earnest money. One can only determine whether the Holleb offered price was higher by assigning a liquidation figure to the insurance claim. If one chooses the $72,000 insurance company offer, the Shlensky price was higher. If one assigns any figure above $160,000 to the insurance claim, the Holleb price was higher.
November 27, after the close of the hearing, Holleb agreed to a $200,000 figure for the insurance claim. At least in form, he could argue that this was merely a filling in of his November 22 offer.
On December 6, Shlensky changed his November 22 offer by permitting the trustee to keep the insurance claim, giving an agreement to indemnify, and increasing his deposit. Comparing Shlensky’s December 6 bid with Holleb’s November 22-27 bid, the two are the same with respect to indemnity and deposit. In order to compare the price, it is again necessary to assign a liquidation figure to the insurance claim. Assigning the $72,000 figure, the Shlensky price is higher by $32,000, and assigning higher figures will produce a greater difference in favor of the Shlensky bid.
On December 11, the trustee’s attorney, at the request of the court, asked each bidder to state the use it intended to make of the property and to give evidence of the bidder’s ability to perform on approval of the bid. Holleb was the only bidder who replied. His letter named the architects who had been engaged, described their preferred concept for development of the site for residential use, and estimated the times at which portions of the project would be started and completed. Shlensky’s counsel stated orally at the hearing on confirmation that he had been unable to reach a conclusion as to the best use for the property.
The December 6 Shlensky bid would produce a higher price than the November 22 Holleb alternative under which the trustee would keep the insurance claim. It seems probable that the December 6 Shlensky bid would also produce a higher price than the Holleb alternative under which Holleb would take the insur-[1185]*1185anee claim in return for $200,000 (the bid which the district court approved).
The trustee had sought to make November 22 the final bidding day, and takes the position that this maneuver was responsible for bringing out much better bids than previously obtained. The district court was faced with the question of how much weight to give to the concept of finality as against the improvement in price represented by Shlensky’s tardy offer, and the question whether the same concept of finality would prevent considering Holleb’s specification, on November 27, of the amount in the alternative which he had left open to negotiation November 22.
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FAIRCHILD, Circuit Judge.
Appeals from an order of the district court approving a sale in a chapter X reorganization proceeding. The appellants are bidders whose bids were rejected.
The debtor, H. R. Weissberg Corporation owns several hotels, including the Edgewater Beach Hotel at Chicago. The trustee concluded and the court decided that sale of the Edgewater Beach property other than pursuant to a plan of reorganization is appropriate. No one challenges this conclusion nor the underlying evaluation of circumstances.
The Edgewater Beach property is subject to encumbrances totalling about $7,000,000, including three mortgages, a furniture security agreement, mechanics’ liens, and taxes. The property had been damaged by fire. The trustee has brought action against the insurer in which the trustee claims in excess of $350,000. The insurer appears to have offered some $72,000. In September, 1968 the trustee received an offer of $100,000 for his equity, if the trustee kept the insurance claim; $200,000, if the buyer got it. The buyer would also indemnify the trustee from lienholders’ claim for deficiency.
The court ordered a sale October 9; it was widely advertised and bidding took place before the court. There was no bid for the property free and clear of encumbrances. The highest bid received was $410,000 for the equity, with the buyer receiving the insurance claim, but without the buyer’s agreement to indemnify. The court rejected all bids and authorized the trustee to sell at public or private sale, subject to court approval.
The trustee elected to invite sealed bids, to be opened at a hearing before the court November 22. Counsel for the trustee announced that after he opened and read the bids there would be a recess, after which a further bid could be made, followed by evaluation of the bids. Later in the hearing he said: “I think the spirit and the basis upon which these bids are being offered today are with finality.”
During the course of the transactions referred to, from September 6 to November 22, the bids were for the trustee’s equity in the property, except for one bid (Rosenthal and Dunbar) for the property free and clear of encumbrances. Some of the bids for the equity contemplated that the purchaser would receive the fire insurance claim, but some did not. Some of the bids for the equity included an agreement by the bidder to indemnify the estate from claims for deficiency on behalf of holders of encumbrances. Trustee’s counsel had indicated that the indemnity agreement had significant value to the estate. The variations just referred to made comparison of bids difficult.
The bid which the court approved and ordered the trustee to accept is referred to as the Holleb bid, since Attorney Marshall M. Holleb is the nominee for the bidders. As presented after the recess November 22, it was an offer of $800,000 for the trustee’s equity, and included an agreement to indemnify. With respect [1184]*1184to the insurance claim, it was in the alternative: the trustee could keep the insurance claim, or could transfer it to Holleb at a price to be mutually agreed upon. By letter dated November 27, the Holleb bidders agreed to pay the trustee’s price of $200,000 for the insurance claim. Letters dated December 2 further supplemented or clarified the Holleb offer in respects which need not be considered here. He had deposited $100,000 November 22.
Appellant Shlensky, whose last November 22 bid was $960,000 for the equity and the insurance claims, without an agreement to indemnify, asserts that his bid, as made or modified December 6, should have been deemed highest and best. He asks that we reverse, with directions to orcor his December 6 bid accepted. It was an offer of $960,000 for the equity, with the trustee permitted to retain the insurance claim, and with an agreement by Shlensky to indemnify. He had deposited $25,000 November 22, but increased it to $100,000 December 6.
Appellants Rosenthal and Dunbar do not assert that their free and clear bid, made November 22, was highest and best. They argue that under the circumstances the sale was not fair and impartial; that we should reverse with directions to reopen the sale “subject to firm and specific guide lines.”
Four bids were submitted November 22: Holleb, Shlensky, Rosenthal-Dunbar, and D’Angelo. It is unnecessary to consider the details of the latter two. Rosen-thal and Dunbar bid $8,150,000, free and clear, with the final payment in four years. D’Angelo bid $878,000 for the equity, would receive the insurance claim, and would indemnify. He announced withdrawal at the hearing on confirmation. No one challenges the conclusion that Rosenthal-Dunbar and D’Angelo were inferior to the other two. Holleb’s November 22 bid was better than Shlensky’s of the same date with respect to the indemnity provision and the deposit of earnest money. One can only determine whether the Holleb offered price was higher by assigning a liquidation figure to the insurance claim. If one chooses the $72,000 insurance company offer, the Shlensky price was higher. If one assigns any figure above $160,000 to the insurance claim, the Holleb price was higher.
November 27, after the close of the hearing, Holleb agreed to a $200,000 figure for the insurance claim. At least in form, he could argue that this was merely a filling in of his November 22 offer.
On December 6, Shlensky changed his November 22 offer by permitting the trustee to keep the insurance claim, giving an agreement to indemnify, and increasing his deposit. Comparing Shlensky’s December 6 bid with Holleb’s November 22-27 bid, the two are the same with respect to indemnity and deposit. In order to compare the price, it is again necessary to assign a liquidation figure to the insurance claim. Assigning the $72,000 figure, the Shlensky price is higher by $32,000, and assigning higher figures will produce a greater difference in favor of the Shlensky bid.
On December 11, the trustee’s attorney, at the request of the court, asked each bidder to state the use it intended to make of the property and to give evidence of the bidder’s ability to perform on approval of the bid. Holleb was the only bidder who replied. His letter named the architects who had been engaged, described their preferred concept for development of the site for residential use, and estimated the times at which portions of the project would be started and completed. Shlensky’s counsel stated orally at the hearing on confirmation that he had been unable to reach a conclusion as to the best use for the property.
The December 6 Shlensky bid would produce a higher price than the November 22 Holleb alternative under which the trustee would keep the insurance claim. It seems probable that the December 6 Shlensky bid would also produce a higher price than the Holleb alternative under which Holleb would take the insur-[1185]*1185anee claim in return for $200,000 (the bid which the district court approved).
The trustee had sought to make November 22 the final bidding day, and takes the position that this maneuver was responsible for bringing out much better bids than previously obtained. The district court was faced with the question of how much weight to give to the concept of finality as against the improvement in price represented by Shlensky’s tardy offer, and the question whether the same concept of finality would prevent considering Holleb’s specification, on November 27, of the amount in the alternative which he had left open to negotiation November 22.
Counsel for the Securities and Exchange Commission, whose recommendations had been invited by the court, took the position while the matter was under consideration in the district court that the December 6 Shlensky bid “is $160,-000 more than the Holleb bid (assuming the $200,000 value for the insurance claim agreed upon by the Trustee and Holleb)” and that “We know of no reason * * * why [the court] may not, in its discretion, accept modifications of the earlier bids which result in a higher price and greater benefit to the estate.” The commission has taken no position in this court on appeal.
After a hearing, at which the district court announced its decision to approve the Holleb bid, detailed findings, conclusions and order were filed. It is apparent that in exercising his discretion the district judge gave weight to the concept of finality as tending to maintain the sanctity and integrity of a judicial sale. He concluded, however, that the Holleb communication subsequent to November 22 could reasonably be deemed a clarification of the Holleb November 22 bid, so that the bid as so supplemented could be considered consistently with the concept of finality; Shlensky’s December bid, however, was reasonably deemed a new bid, consideration of which would undermine the concept of finality. The district judge also gave weight to the fact that only Holleb had responded to the request for a plan of development and showing of ability to perform, and had supplied evidence of a commitment of a responsible life insurance company to provide required funds.
No claim has been made that the November 22 bids were inadequate. Indeed, as noted by the district court, an appraisal made during the chapter XI proceeding which immediately preceded the chapter X proceeding had valued the property, apparently after the fire loss, at $5,100,000, considerably less than the encumbrances.
The sale, having been confirmed, can only be set aside for an abuse of discretion.1 We are unable to find an abuse of discretion under the circumstances disclosed by this record.
The policy of giving great weight to observing the finality of the bidding day has long been recognized.
In England, it was formerly the rule that bidding would be reopened until confirmation upon an offer to advance the price.
“But Lord Eldon expressed much dissatisfaction with this practice of opening biddings upon a mere offer of an advanced price, as tending to diminish confidence in such sales, to keep bidders from attending, and to diminish the amount realized.”2
Parliament responded to the problem noted by Lord Eldon by passing the Sale of Land by Auction Act which provided that the highest bidder at a sale by auction would be declared the purchaser in the absence of fraud or other improprieties.3 This rule was adopted by the great majority of American courts. The rule is an expression of the general [1186]*1186policy that the setting of cut-off dates for the receipt of bids will, in the long run, produce better bids with the least delay.
A number of cases do hold that the district court has discretion to reopen the bidding where the highest bid before the cut-off date is inadequate and a later higher bid is made. In such situations, the district court may order the property sold to the later, higher bidder.4 These cases do not hold that the court must order the property sold to the later, higher bidder. They merely say that the court may order the property sold to him.
Appellants have argued that the district judge should not have given weight to the fact that he was favorably impressed by the type of project described by Holleb as the “preferred concept” of the architects engaged by his group. The judge did express enthusiasm for the type of project described in view of the fact that the Edgewater Beach property is a choice location on Chicago’s lake front. There are some circumstances under which a court may consider the fact that a particular bidder will make a use of the property which serves community interest.5 We think favorable consideration of the type of development under consideration by the Holleb group was no more than a “make weight” here, and did not exceed proper bounds.
We can not agree that the fact that the bidders were not required, by advance prescription, to make offers on identical, or alternative sets of, conditions, nor the fact that the Holleb November 22 offer had an alternative subject to later negotiation, which was carried out, so undermine the integrity or dignity of the sale that it was an abuse of discretion not to reopen it under more specific preconditions.
The record discloses that in September the trustee received an offer (from Holleb) of $100,000 for the equity, the trustee keeping the insurance claim, or $200,000, the purchaser taking it, with an indemnity by the purchaser in either event. A sale before the court on October 9 was widely advertised. It was conducted as an auction. The high bid was $410,000 for the equity, the purchaser taking the insurance claim, but without indemnity. Shlensky and Holleb were the only bidders, but several others expressed an interest. The trustee explained his interest in an indemnity provision.
The Rosenthal-Dunbar free and clear offer ($8,000,000, with final payment in four years) was thereafter received and was considered November 22. The three original sealed bids for the equity were: D’Angelo — $400,000, the purchaser taking the insurance claim and giving indemnity; Holleb — $775,000 on the same conditions; and Shlensky $700,-000, the purchaser taking the insurance claim, but not giving indemnity. After the recess the Holleb and Shlensky bids were revised as already stated; D’Angelo’s bid was raised to $878,000 and Rosenthal-Dunbar to $8,150,000.
The hotel operation ceased some time ago, the property is expensive to maintain, and a lease to a temporary tenant (Loyola University) expired January 31.
The results of the efforts from September 6 to November 22 were highly successful for the estate. Although only a few serious bidders came forward, there appears to have been full opportunity for interested persons to bid. We think the district court resolved the questions presented in a manner which can not be said to be an abuse of discretion.
When the urgency of these appeals was brought to the attention of this court by motion, this court expedited the filing of briefs, heard oral argument April 2 and entered its judgment affirming the order [1187]*1187April 4, 1969, noting that this opinion would be filed.