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United States Supreme Court, Docket: 14-116 Opinion Date: May 4, 2015

Appellant Bullard filed a Chapter 13 Bankruptcy case and proposed Plan. The Debtor’s mortgage lender objected to the treatment of its claim under the Plan and the Bankruptcy Court sustained that objection, denying confirmation of the Plan with leave to amend.

First Appeal

The Debtor appealed the denial of confirmation to the 1st Circuit Bankruptcy Appellate Panel, which concluded that denial of confirmation was not a final, appealable order under 28 U.S.C.158(a)(1). Nonetheless, the BAP heard the issue as an interlocutory appeal – the operative provision in the Bankruptcy Code requiring “with leave of the court.” Tha BAP agreed that Bullard’s proposed Plan did not accord proper treatment to the mortgage company and upheld the ruling of the Bankruptcy Court.

Second Appeal

The Debtor then appealed his denial of confirmation to the 1st Circuit Court of Appeals, which dismissed for lack of jurisdiction. The 1st Circuit found that the Bankruptcy Court’s denial of confirmation was not final so long as the Debtor was not foreclosed from filing an amended Plan.

The Supreme Court

The Debtor finally appealed to the Supreme Court, which affirmed the ruling of the 1st Circuit unanimously in its Opinion. According to the Court the relevant process of purposes of determining whether or not denial of confirmation decision constitutes a “final and appealable” decision is the process of arriving at a confirmable Plan, so only confirmation of the Plan or dismissal of the case could alters the status quo and fixes the parties’ rights and obligations. In other words, denial of confirmation with leave to amend changes little. Additional considerations—that the statute defining core bankruptcy proceedings lists “confirmations of plans,” but omits any reference to denials; that immediate appeals from denials would result in delays and inefficiencies; and that inability to immediately appeal a denial encourages the debtor to work with creditors and the trustee to develop a confirmable plan—bolster this conclusion.

The Takeaway

Whether the issue is a judgment in State Court or confirmation of a Bankruptcy Plan of Reorganization, only “final and appealable” decisions may be overturned by a higher Court. Maybe we all know that, but once in a while we need to be reminded just what is and is not final.

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