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190.

Bankruptcy Jurisdiction -- Appellate Jurisdiction

1.District Courts
2.Bankruptcy Appellate Panels
3.Courts of Appeals
4.Stay Pending Appeal
5.Effect of Appeal
6.Standing To Appeal
7.Procedural Requirements

1.   District Courts.

     a.    District courts have appellate authority over dispositive orders 
           and judgments of the bankruptcy court.  28 U.S.C. § 158(a).

           i.    Final orders, judgments and decrees are appealable as of 
                 right;

           ii.   Interlocutory orders and decrees increasing or reducing the 

                 time periods for filing a chapter 11 plan under § 1121 

                 are appeals as of right [added by Section 102 of the 
                 Bankruptcy Reform Act of 1994];

           iii.  Other interlocutory orders are appealable by leave of 
                 court.  Id.; see Masters, Mates & Pilots Plans v. 

                 Lykes Bros. S.S. Co. (In re Lykes Bros. S.S. Co.), 200 
                 B.R. 933 (M.D. Fla. 1996) (court should grant 
                 discretionary, interlocutory review if order involves 
                 controlling issue of law, there is substantial ground for 
                 difference of opinion, and immediate appeal would 
                 materially advance ultimate termination of the litigation); 

                 Robinson v. Johns-Manville Corp. (In re Johns-Manville 
                 Corp.), 45 B.R. 833 (S.D.N.Y. 1984) (leave should be 
                 liberally granted if it facilitates expeditious resolution 
                 of the case); see also Brandt v. Wand 
                 Partners, 242 F.3d 6 (1st Cir. 2001) (bankruptcy 
                 court's interlocutory orders preceding withdrawal of 
                 reference were not properly before court of appeals on 
                 appeal from district court's final judgment).

     b.    Concept of "finality" for bankruptcy appeals. Compare 
           United States Trustee v. Bloom (In re Palm Coast, Matanza 
           Shores L.P.), 101 F.3d 253 (2d Cir. 1996) (concept of 
           finality is more flexible in bankruptcy; orders may be 
           immediately appealable if they finally dispose of discrete 
           disputes within larger case) with Stanley v. Crossland, 

           Crossland, Chambers, MacArthur & Lastreto (In re Lakeshore Vill. 
           Resort, Ltd.), 81 F.3d 103 (9th Cir. 1996) (questioning use 
           of a flexible approach to finality of district court decisions in 

           bankruptcy).  See Law Offices of Nicholas A. Franke v. 
           Tiffany (In re Lewis), 113 F.3d 1040 (9th Cir. 1997) 
           (bankruptcy court order is "final" and, thus, appealable where it 

           (1) resolves, seriously affects substantive rights; (2) finally 
           determines discrete issue); Jove Eng'g, Inc. v. IRS (In re 
           Jove Eng'g, Inc.), 92 F.3d 1539 (11th Cir. 1996) (remand 
           order appealable where bankruptcy court need only perform 
           ministerial duty of offsetting up to $500 against IRS' claim 
           without exercising any discretion or making any further 
           findings); Masunaga v. Stoltenberg (In re Rex Montis Silver 
           Co.), 87 F.3d 435 (10th Cir. 1996) (order remanding to 
           bankruptcy court for determination of amount of sanctions was not 

           final); Westbury Real Estate Ventures, Inc. v. Bradlees, Inc. 
           (In re Bradlees Stores, Inc.), 210 B.R. 506 (S.D.N.Y. 1997) 
           (dismissal of creditor's breach of contract action was not final 
           when bankruptcy court had not resolved creditor's proofs of claim 

           based on same breach).

     c.    Timeliness of Appeal Failure to file notice of appeal within 10 
           days deprives district court of subject matter jurisdiction to 
           review bankruptcy court's order.  Veltman v. Whetzal, 93 
           F.3d 517 (8th Cir. 1996); see Fed. R. Bankr. P. 8002; 
           see also United States ex rel. Rudd v. Schimmels (In re 

           Schimmels), 85 F.3d 416 (9th Cir. 1996) (failure to file 
           timely notice of appeal from summary judgment order was not 
           excused by court's alleged failure to enter separate judgment); 
           United States v. Henry Bros. P'ship (In re Henry Bros. 
           P'ship), 214 B.R. 192 (B.A.P. 8th Cir. 1997) (exceptional 
           circumstances doctrine did not apply to extend time for filing 
           notice of appeal).

     d.    Does district court have authority  -- if the parties consent -- 
           to refer bankruptcy appeal to magistrate for report and 
           recommendation?  Yes.  Hall v. Vance, 887 F.2d 1041 

           (10th Cir. 1989); accord In re Apex Oil Co., 146 
           B.R. 821 (Bankr. E.D. Mo. 1992).  No.  In re Elcona 
           Homes Corp., 810 F.2d 136 (7th Cir. 1987).

      
2. Bankruptcy Appellate Panels.

     a.    Creation of Bankruptcy Appellate Panels

           Changing prior law which made the creation of bankruptcy 
           appellate panels discretionary with each circuit council (and 
           resulted in the existence of a BAP in only one circuit, the 
           Ninth), the Bankruptcy Reform Act of 1994 directs circuit 
           councils to establish BAPs unless a council finds (i) 
           insufficient judicial resources or (ii) establishment of a BAP 
           would result in undue delay or increased cost to parties.  A BAP 
           cannot hear appeals in a district unless a majority of the 
           district judges for that district authorize such service.  Once 
           authorized, the BAP, upon consent of the parties, can hear and 
           determine appeals otherwise directed to district court.  28 
           U.S.C. § 158(b).  BAP's exist in the 1st, 6th, 8th, 9th and 
           10th Circuits.  (Note, however, a majority of the judges 
           in a district must authorize use of a BAP; therefore, you must 
           determine whether the circuit and the specific district 
           permits its use [e.g., in the 10th Circuit, cases in the District 

           of Colorado are not appealable to the 10th Circuit BAP]).  The 
           DC, 3d, 4th, 5th, and 11th Circuits do not intend to create BAPs 
           at this time.  The 7th Circuit has deferred its decision on 
           whether to create a BAP.  The 2d Circuit abolished its BAP.

     b.    Procedure

           Once authorized in a district, appeals will be heard by a panel 
           of three sitting bankruptcy judges unless (i) the appellant 
           elects when filing the appeal, or (ii) any other party elects 
           within thirty days after service of the notice of appeal, to have 

           the appeal heard by the district court. 28 U.S.C. § 
           158(c)(1).

     c.    BAP opinions are regarded as "highly persuasive though not 
           binding, precedent."  Daly v. Septula (In re Carrozzella & 
           Richardson), 255 B.R. 267, 273 (Bankr. D. Conn. 2000); 
           accord In re Akram, 259 B.R. 371, 374 (Bankr. C.D. 
           Cal. 2001).

      
3. Courts of Appeals.

     a.    Appeal from the district court is governed by 28 U.S.C. 
           §§ 158(d) and 1291-92 and the Federal Rules of 
           Appellate Procedure.  See Conn. Nat'l Bank v. 
           Germain, 503 U.S. 249 (1992) (courts of appeals are 
           authorized by 28 U.S.C. § 1292 to review orders of district 
           courts or bankruptcy appellate panels entered upon review of 
           interlocutory bankruptcy court order; such jurisdiction is not 
           limited by 28 U.S.C. § 158(d) permitting review of "final" 
           orders); see also In re Forty-Eight Insulations, 
           Inc., 115 F.3d 1294, 1300 (7th Cir. 1997) (refusal to grant 
           stay pending appeal of order authorizing interim distribution had 

           effect of denying injunction and provided jurisdiction in court 
           of appeals under 28 U.S.C. § 1292(a)(1)); Adams v. First 
           Fin. Dev. Corp. (In re First Fin. Dev. Corp.), 960 F.2d 23 
           (5th Cir. 1992) (court of appeals lacks jurisdiction to hear 
           appeal of order overruling objections to disclosure statement); 
           Sonnax Indus., Inc. v. Tri-Component Prods. Corp., 907 
           F.2d 1280 (2d Cir. 1990) (denial of relief from automatic stay is 

           equivalent to permanent injunction and is final, appealable 
           order).  But see Lievsay v. W. Fin. Sav. Bank 
           (In re Lievsay), 118 F.3d 661, 663 (9th Cir. 1997) (28 U.S.C. 

           §§ 1291 and 1292 do not apply to appeals from BAPs), 
           cert. denied, 522 U.S. 1149 (1998).

     b.    Unlike former law, parties no longer may agree to proceed 
           directly to court of appeals, by-passing district court appellate 

           review.

     c.    Courts are split on whether court of appeals has jurisdiction of 
           appeal from district court's order remanding final order back to 
           bankruptcy court.  Compare Pizza of Haw., Inc. v. 
           Shakey's, Inc. (In re Pizza of Haw., Inc.), 761 F.2d 1374 
           (9th Cir. 1985) with Buckner v. FmHA (In re 
           Buckner), 66 F.3d 263 (10th Cir. 1995), and In re 
           Fox, 762 F.2d 54 (7th Cir. 1985).  See Millers Cove 

           Energy Co. v. Moore (In re Millers Cove Energy Co.), 128 F.3d 

           449 (6th Cir. 1997); In re Nichols, 21 F.3d 690 (5th Cir. 
           1994) (district court order reversing bankruptcy court decision 
           on conversion claim and remanding for significant further 
           proceedings not appealable); Schneider v. FmHA (In re 
           Schneider), 873 F.2d 1155 (8th Cir. 1989) (district court's 
           reversal and remand of bankruptcy court's order overruling FmHA 
           objection to confirmation of chapter 12 held not to be final, 
           appealable order).  Cf. Things Remembered, Inc. v. 
           Petrarca, 516 U.S. 124 (1995) (under the bankruptcy removal 
           statute, 28 U.S.C. § 1452, court of appeals lacks 
           jurisdiction to review an order remanding a bankruptcy case to 
           state court).

     d.    District court's denial of United States' sovereign immunity 
           defense to debtor's preference action is not immediately 
           appealable.  Pullman Constr. Indus. v. United States (In re 
           Pullman Constr. Indus.), 23 F.3d 1166 (7th Cir. 1994).
        
      
4. Stay Pending Appeal.

     a.    Obtaining a stay pending appeal is critical in the bankruptcy 
           context.  See, e.g., § 363(m) (validity of sale of 
           property not affected by subsequent reversal on appeal unless 
           stay obtained); § 364(e) (reversal of order approving 
           obtaining credit does not affect extension of credit, absent 
           stay); Ginther v. Ginther Trusts (In re Ginther), 238 F.3d 

           686 (5th Cir. 2001) (rejecting attempt to challenge purchaser's 
           good faith to avoid having appeal dismissed as moot under 
           363(m)), petition for cert. filed, 69 U.S.L.W. 9730 (U.S. 
           Apr. 30, 2001) (No. 00-1666); 255 Park Plaza Assocs. L.P. v. 
           Conn. Gen. Life Ins. Co. (In re 255 Park Plaza Assoc. L.P.), 
           100 F.3d 1214 (6th Cir. 1996) (failure to obtain stay of order 
           approving sale of estate's only assets renders appeal moot); 
           Cargill, Inc. v. Charter Int'l Oil Co. (In re Charter 
           Co.), 829 F.2d 1054 (11th Cir. 1987) (failure by disappointed 

           bidder to obtain stay as required by § 363(m) caused appeal 
           from order approving sale of debtor's subsidiary to become moot); 

           Plotner v. AT&T, 172 B.R. 337 (W.D. Okla. 1994) (appeal of 

           § 363 decision moot after good faith purchaser consummated 
           sale); Whatley Ranch Joint Venture, Ltd. v. Whatley (In re 
           Whatley), 169 B.R. 698 (D. Colo. 1994), aff'd, 54 F.3d 

           788 (10th Cir. 1995) (same); In re Tempo Tech. Corp., 202 
           B.R. 363 (D. Del. 1996) (district court can review bankruptcy 
           court's finding that buyer was in fact "good faith purchaser"); 
           Mellon Bank v. Del. & Hudson Ry. (In re Del. and Hudson 
           Ry.), 129 B.R. 388 (D. Del. 1991) (same); Farmers Bank v. 
           Kittay (In re March), 988 F.2d 498 (4th Cir. 1993) (appeal of 

           foreclosure issue rendered moot by sale of property); Official 

           Comm. of Unsecured Creditors of LTV Aerospace & Def. Corp. v. 
           Official Comm. of Unsecured Creditors of LTV Steel Co. (In re 
           Chateaugay Corp.), 988 F.2d 322 (2d Cir. 1993) 
           (implementation of order authorizing payment to pension plan 
           rendered appeal of order moot); Dahlquist v. First Nat'l 
           Bank, 737 F.2d 733 (8th Cir. 1984) (appeal of cash collateral 

           order moot where collateral spent during appeal); Holywell 
           Corp. v. Bank of N.Y. (In re Holywell Corp.), 901 F.2d 931 
           (11th Cir. 1990) (absent stay, appeal of substantially 
           consummated plan is moot); Manges v. Seattle-First Nat'l Bank 
           (In re Manges), 29 F.3d 1034 (5th Cir. 1994) (same); In re 

           Specialty Equip. Cos., 3 F.3d 1043 (7th Cir. 1993) (same); 
           Ronit, Inc. v. Stemson Corp. (In re Block Shim Dev. 
           Co.-Irving), 939 F.2d 289 (5th Cir. 1991) (same); RTC v. 
           Best Prods. Co. (In re Best Prods. Co.), 177 B.R. 791 
           (S.D.N.Y.), aff'd, 68 F.3d 26 (2d Cir. 1995) (same);  
           Clarke v. Duck (In re Clarke), 98 B.R. 979 (B.A.P. 9th 
           Cir. 1989), app. dismissed, 914 F.2d 261 (9th Cir. 1990) 
           (same); In re Olive St. Invs., Inc., 106 B.R. 183 (E.D. 
           Mo. 1989) (appeal from unstayed order lifting stay was rendered 
           moot by foreclosure sale), app. dismissed, 972 F.2d 214 
           (8th Cir. 1992); White Rose Food v. Gen. Trading Co. (In re 
           Clinton St. Food Corp.), 170 B.R. 216 (S.D.N.Y. 1994) (appeal 

           of § 364 financing order granting super priority lien to 
           another creditor was moot); In re CGI Indus., Inc., 27 
           F.3d 296 (7th Cir. 1994) (same).  But see S. St. 
           Seaport LP v. Burger Boys, Inc. (In re Burger Boys, Inc.), 94 

           F.3d 755 (2d Cir. 1996) (debtor's assumption of lease did not 
           render moot landlord's appeal where no third party relied on 
           assumption and court could fashion effective relief by deeming 
           lease rejected); Arnold & Baker Farms v. FmHA (In re Arnold & 
           Baker Farms), 85 F.3d 1415 (9th Cir. 1996) (appeal moot only 
           when court can no longer provide effective relief or it would be 
           inequitable to grant relief as where third party's rights have 
           intervened).  See generally "Circuit Court Review Of 
           Orders On Stays Pending Bankruptcy Appeals," 62 Am. Bankr. L.J. 
           353 (1988).

           The doctrine of equitable (or prudential) mootness provides that 
           "an appeal should . . . be dismissed as moot when, even though 
           effective relief could conceivably be fashioned, implementation 
           of that relief would be inequitable."  In re Cont'l Airlines, 
           Inc., 91 F.3d 553, 558-59 (3d Cir. 1996)(en banc). 
           Five factors when applied to plan confirmation orders: (1) 
           whether the plan has been substantially consummated; (2) whether 
           a stay has been obtained; (3) whether the relief requested would 
           affect the rights of parties not before the court; (4) whether 
           the relief requested would affect the success of the plan; and 
           (5) the public policy of affording finality to bankruptcy 
           judgments.  Nordhoff Invs., Inc. v. Zenith Elecs. Corp. (In re 

           Zenith Elecs. Corp.), 250 B.R. 207 (D. Del. 2000), 
           aff'd, 2001 WL 698000 (3d Cir. Jun. 21, 2001) (No. 
           00-2250, 00-2249); see also United States ex rel. FCC 
           v. GWI PCS 1 Inc. (In re GWI PCS 1 Inc.), 230 F.3d 788 (5th 
           Cir. 2000) (where temporary stay expired and plan was 
           substantially consummated before court heard appeal, appeal was 
           equitably moot), cert. denied 121 S. Ct. 2623 (2001); 
           In re PWS Holding Corp., 228 F.3d 224 (3d Cir. 2000) 
           ("equitable mootness" is limited in scope and should be 
           cautiously applied; here, where only narrow releases provided 
           under a plan were being challenged, a reversal or unraveling of 
           the entire plan would not occur and dismissal based on equitable 
           mootness would not be required).

     b.    Note:  boilerplate language that closing is conditioned 
           upon entry of final nonappealable order may constitute a 
           consensual stay.  See In re Brookfield Clothes, 
           Inc., 31 B.R. 978 (S.D.N.Y. 1983).

     c.    Right of U.S. to stay pending appeal might not be considered 
           automatic in the bankruptcy context.  See In re 
           Westwood Plaza Apts., 150 B.R. 163 (Bankr. E.D. Tex. 1993), 
           aff'd in part, 192 B.R. 693 (E.D. Tex. 1996).

      
5. Effect of Appeal.

Appeal from order does not deprive bankruptcy court of jurisdiction over all 

aspects of the case.  [See discussion at pp. 66-67 below.]

      
6. Standing To Appeal.

Appellate standing is not defined by the Bankruptcy Code.  The courts have 
applied the "person aggrieved" standard, i.e., one who is "directly and 
adversely affected pecuniarily" by the challenged ruling.  Kabro Assocs. 
of W. Islip, LLC v. Colony Hill Assocs. (In re Colony Hill Assocs.), 111 

F.3d 269, 273 (2d Cir. 1997).

      
7. Procedural Requirements.

See Durkin v. Shea & Gould, 92 F.3d 1510 (9th Cir. 1996) 
(circuit court lacked jurisdiction to address issues not certified to it by 
district court); United States Trustee v. Hayes (In re Bishop, Baldwin, 
Rewald, Dillingham & Wong, Inc.), 104 F.3d 1147 (9th Cir. 1997) 
(appellant not precluded from raising issues on appeal merely because they 
were not included in statement of issues on appeal submitted pursuant to 
Fed. R. Bankr. P. 8006).