When Bankruptcy Appeals Attack: Refining the Flexible Approach to Finality in Bankruptcy Proceedings

Six years ago, an article in a legal journal called bankruptcy appeals the “ninjas of the appellate world.” It means they come out of nowhere and have different rules and standards. Since then, the U.S. Supreme Court has made two important decisions about which orders in bankruptcy cases can be appealed. Some lower courts have interpreted these decisions in different ways. This article explains what the Supreme Court said and how lower courts have applied it. It also gives some practical tips for dealing with potential bankruptcy appeals. Before we dive into the nitty-gritty of Supreme Court rulings on bankruptcy finality, we need to remember that bankruptcy appeals are different from other types of appeals. First, they go to federal district courts, which usually act as trial courts. This means that lawyers are presenting their arguments to just one judge, who may not be as used to hearing appeals. Second, because appeals start in district court, there can be a lot of local rules and procedures to pay attention to. Third, bankruptcy cases often involve multiple lawsuits within the overall bankruptcy, and events in the case build on each other. This can make it tricky to figure out when orders in the case can be appealed. It’s these unique aspects of bankruptcy appeals that the Supreme Court has recently looked at. In bankruptcy court, the rules for when you can appeal a decision are different from regular court. In a recent case, the Supreme Court said that a decision in bankruptcy court is only final and can be appealed if it completely finishes that part of the case and there’s nothing left for the court to do. In this case, the Court said that a decision denying a person’s proposed repayment plan in bankruptcy court wasn’t final because it didn’t completely finish that part of the case. Some other types of decisions in bankruptcy court might be final and able to be appealed, though. In Ritzen Group v. Jackson Masonry, the Supreme Court ruled that orders denying a creditor’s request to continue collecting debt outside of bankruptcy are considered final and can be appealed. This is important because it allows creditors to appeal sooner and avoids wasting time and money. The ruling also lays out a clear framework for determining the finality of orders in bankruptcy cases. First, we need to figure out if the order is separate from the rest of the bankruptcy case and has its own process and consequences. Then, we have to see if the order definitively ends the proceeding and if there’s anything else for the bankruptcy court to do. If the order is final, it can be appealed, but if it’s not, appealing it could be a waste of time and money. The Supreme Court’s decision in Ritzen allows for arguments about the finality of other types of orders, but there’s not a lot of case law yet. Two court decisions after the Ritzen case discussed whether certain orders in bankruptcy cases were final or not. In one case, the court found that the orders were not final because they were closely connected to other parts of the bankruptcy process. In another case, the court decided that an order denying dismissal of a bankruptcy case was final because it resolved a specific issue and had a big impact. This shows that figuring out if an order is final in bankruptcy cases can be complicated, and different courts may have different opinions. The 11th Circuit hasn’t dealt with this issue yet, but it probably will in the future. The Supreme Court may have to step in again to clarify things. So, we’ll have to keep an eye out for more developments in this area of law.

Source: https://www.floridabar.org/the-florida-bar-journal/when-bankruptcy-appeals-attack-refining-the-flexible-approach-to-finality-in-bankruptcy-proceedings/