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Bankruptcy Law Research at NYLI: District Court Review

Issues

There are 4 types of bankruptcy cases filed in district court:

  •   Appeals of final bankruptcy court orders
  •   Motions for Leave to Appeal (interlocutory orders of the BR court)
  •   Motions for Withdrawal of Reference
  •   Motions for judicial review

 

Some of the issues considered include:

  • is the judgment or order final?
  • does the appellant have standing to appeal?
  • was the notice of appeal timely filed?
  • does the notice of appeal substantially conform to the Official Form?
  • did the bankruptcy court provide certification and did the district court grant leave for the appeal of interlocutory orders?

Bankruptcy Court Decisions - Core / Non-core Proceedings

28 USC §157 details the proceedings in which bankruptcy courts are authorized to issue final decisions. 

CORE proceedings, which could have only been brought as a result of the bankruptcy petition, including:

  • administration of the bankruptcy estate
  • allowance of claims
  • objections to discharge
  • confirmation of plans
  • actions to recover preferential & fraudulent transfers (see Executive Benefits Insurance Agency v. Arkison for discussion)

NONCORE proceedings, which could have been brought in the absence of the bankruptcy petition, if:

  • the parties consent, and
  • the matter is "otherwise related" to a title 11 case 

If parties do not consent to the jurisdiction of the bankruptcy court over non-core proceedings, the bankruptcy court can hear the matter and issue proposed findings of fact and conclusions of law.  The district court will review these matters de novo and issue an order which can be appealed to the court of appeals.

 

Bankruptcy Court Decisions - Final / Interlocutory

28 USC §158(a) confers jurisdiction on the district courts to hear appeals from:

  • final judgments of bankruptcy judges
  • interlocutory orders issued under Title 11 §1121(d) dealing with time periods referred to in that section
  • other interlocutory orders entered in proceedings referred to bankruptcy judges under 28 USC §157 (with consent of the district court).

FINAL JUDGMENTS: 

Because final judgments may be appealed as of right to the district court, it is important to determine if an order is final. There is no statutory definition of "final judgment."  In ordinary civil litigation, final orders resolve litigation, settle liability or otherwise impair a party's rights.  The "finality" doctrine in bankruptcy appeals is more flexible than in other civil litigation.  A bankruptcy case is an aggregation of individual controversies, the resolution of which must be reached before bankruptcy distribution can be made. 

"In recognition of these factors, finality of bankruptcy orders cannot be limited to the last order concluding the bankruptcy case as a whole. This circuit and others reviewing bankruptcy decisions have freely applied the collateral order doctrine and the Forgay-Conrad Rule to escape such results ... . Some courts, including our own, have also concluded that any order within a bankruptcy case which concludes a particular adversary proceeding should be deemed final and reviewable. "

In re Martin Bros. Toolmakers, Inc., 796 F.2d 1435, 1437-38 (11th Cir. 1986)



INTERLOCUTORY JUDGMENTS:

 Judgments that are not final are interlocutory.  One way to appeal an interlocutory order from the bankruptcy court is to seek leave to appeal from the district court under Bankruptcy Rule 8003.  28 USC §1292(b) governs discretionary interlocutory appeals.  Many courts have adopted this standard to decide whether to grant leave to appeal.  Thus, a district court may grant leave to appeal if there is a controlling question of law to which there is substantial ground for difference of opinion and an immediate appeal may materially advance the termination of the litigation.  Other standards are discussed in the Collier on Bankruptcy site below. 

See the CIRCUIT COURT REVIEW tab for more information.

 

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