The debtors’ claim against lenders for charging improper fees during their bankruptcy belonged to the bankruptcy estate, but the lenders’ appeal of the bankruptcy court’s order of abandonment was dismissed because they lacked a direct financial stake in the outcome of the bankruptcy court’s decision and, therefore were not “persons-aggrieved.” In so holding, the Sixth Circuit indicated that had the lenders challenged the “person-aggrieved” standard it would likely have been found to have been abrogated by subsequent Supreme Court precedent and congressional action. Schubert v. Litton Loan Servicing, No. 21-3969 (6th Cir. March 28, 2023). Read More
Tag Archive: appeal jurisdiction
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Sixth Circuit Questions “Person-Aggrieved” Standard for Appeal
Posted by NCBRC - April 14th, 2023
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Denial of Motion for Relief from Stay is Final and Appealable
Posted by NCBRC - January 16th, 2020
In a unanimous decision, the Supreme Court held that a bankruptcy court’s denial of a motion for relief from stay constitutes a final, appealable order under section 158(c)(2). Ritzen Group, Inc. v. Jackson Masonry, LLC, No. 18-938, 589 U.S. ___ (2020). NACBA filed an amicus brief in support of the Respondent.
Ritzen Group and Jackson Masonry entered into a land-sales contract. The deal fell through and Ritzen filed suit against Jackson in Tennessee state court for breach of contract. On the eve of trial, Jackson filed for chapter 11 bankruptcy. Ritzen sought relief from stay to allow the state civil trial to go forward. The court denied the motion, and Ritzen did not appeal. After a hearing in which it found Ritzen at fault for the failure of the contract, the bankruptcy court also disallowed Ritzen’s claim against the bankruptcy estate. Ritzen then appealed to the district court challenging both the denial of the motion for relief from stay and the ruling on the contract dispute. The district court found the relief from stay appeal was untimely, and ruled against Ritzen on the merits of the contract appeal. The Sixth Circuit affirmed. In re Jackson Masonry, LLC, 906 F. 3d 494 (2018). Read More
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Denial of Motion to Dismiss for Abuse Final Appealable Order
Posted by NCBRC - December 9th, 2011
In McDow v. Dudley, No. 10-1732 (4th Cir. Nov. 30, 2011) the fourth circuit found that an order denying a trustee’s motion to dismiss a debtor’s chapter 7 case as abusive under section 707(b) is a final, appealable order under section 158(a). In the bankruptcy court, the trustee sought dismissal based on a means test calculation that the debtors had $2,000/month available to pay creditors. The bankruptcy court granted debtors’ motion for summary judgment finding that section 707(b) applies only to cases filed originally under chapter 7 and does not encompass cases converted from chapter 13, as debtors’ case was. The district court dismissed the trustee’s appeal as interlocutory.
The circuit court vacated and remanded. The court reasoned that when Congress enacted BAPCPA and added the means test it created a presumption of abuse when debtor’s income exceeded a statutory threshold. Because BAPCPA imposed a strict deadline for the trustee to raise the issue of bad faith the court found that resolution of that issue was essential to the continuation of the case and therefore constituted a conclusion of a discrete dispute which was an appealable order. The court further noted that pragmatic considerations, including the possible liquidation of assets and depletion of resources if the case goes forward, militated in favor of treating the denial of dismissal for abuse as a final appealable order.
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