Petition for Cert. On Appealability of Confirmation Denial

The issue of whether denial of confirmation is a final, appealable, order has made its way to the Supreme Court in a petition for certiorari filed by the debtors. Gordon v. Bank of Amer., S. Ct. No. ____ (filed May 22, 2014). Petitioners challenge the Tenth Circuit’s finding that once the district court reversed and remanded the bankruptcy court’s decision confirming their plan, and ordered further proceedings related to a new plan, the district court decision was not a final, appealable, order under section 158(d). Gordon v. Bank of Am., N.A. (In re Gordon), 743 F.3d 720 (10th Cir. 2014). The Tenth Circuit adhered to its 1990 precedent, Simons v. F.D.I.C. (In re Simons), 908 F.2d 643, 645 (10th Cir.) (per curiam), that held that “a district court order is not final if it contemplates significant further proceedings in the bankruptcy court.”

The petition points to an entrenched conflict in nine circuits, with the Third, Fourth and Fifth Circuits finding that denial of confirmation is directly appealable. See Mort Ranta v. Gorman, 721 F.3d 241, 250 (4th Cir. 2013); In re Armstrong World Indus., 432 F.3d 507, 511 (3d Cir. 2005); In re Bartee, 212 F.3d 277, 283 (5th Cir. 2000). And six circuits, including the Tenth, finding that a denial of confirmation is an interlocutory order not appealable as of right. See In re Bullard, No. 13-9009, 2014 WL 1910868 at *3 (1st Cir. May 14, 2014); In re Lindsey, 726 F.3d. 857, 859 (6th Cir. 2013); In re Lievsay, 118 F.3d 661, 662 (9th Cir. 1997); In re Pleasant Woods Assocs. Ltd. P’ship, 2 F.3d 837, 838 (8th Cir. 1993); Maiorino v. Branford Savings Bank, 691 F.2d 89 (2d Cir. 1982).

Petitioners argue that the Tenth Circuit’s reliance on the principle that an order denying confirmation is not final because it contemplates further merits proceedings, is misguided because the “same thing is true of grants of plan confirmation, which [the Supreme] Court and others have uniformly held appealable.” Rather, petitioners point to a long line of cases that treat bankruptcy orders broadly with respect to finality. This flexibility harmonizes with the broad language of section 158(d)(1) which refers to “final decisions, judgments, orders, and decrees,” in contrast with section 1291 which applies to appeals from district courts in all cases and applies to “final decisions.” As things currently stand in many jurisdictions, a debtor must engage in cumbersome and time-wasting procedures such as objecting to his or her own plan, or dismissing then appealing from the grant of the debtor’s own motion. Petitioners argue that denials of confirmation are appealable because “[t]hey finally resolve a discrete dispute that frequently is decisive for the balance of the bankruptcy case.”

Gordon USSCt Petition