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The Delaware Bankruptcy Insider is a premier blog designed to bring its readers a comprehensive analysis of the latest Delaware corporate bankruptcy news and rulings.  Brought to you by Ashby & Geddes, P.A.

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Showing 10 posts in Appeals.

Stern Requires More Than Subject Matter Jurisdiction, Bankruptcy Court Must Also Have Constitutional Adjudicatory Authority to Approve Nonconsensual Third-Party Releases in a Plan

Opt-Out Lenders v. Millennium Lab Holdings II, LLC, No. 16-110-LPS, --- F.Supp.3d ----, 2017 WL 1032992 (D. Del. Mar. 17, 2017) corrected and superseded by 2017 WL 1064997 (D. Del. Mar. 20, 2017)

In this Opinion, the United States District Court for the District of Delaware (the “District Court”) examines the bankruptcy court’s authority post-Stern v. Marshall, 131 S. Ct. 2594 (2011), to enter a final order releasing and permanently enjoining a non-debtor’s state law fraud and federal RICO claims against non-debtors absent consent.  Following two recent United States Supreme Court cases—Stern and Wellness Int’l Network, Ltd. v. Sharif, 135 S. Ct. 1932 (2015)—it is clear that parties have a constitutional right to have state law claims adjudicated by an Article III court.  “Despite the District Court’s general referral of bankruptcy matters to the Bankruptcy Court, the extent of the Bankruptcy Court’s adjudicatory authority depends on the type of proceeding before it and is subject to the bounds of [these] constitutional limitations . . . .”  Op. at 3.  For core proceedings (i.e., those that “arise under title 11” or “arise in a case” under title 11), bankruptcy judges can enter final orders.  When a matter is non-core (i.e., “related to” the bankruptcy case), however, absent consent of the parties, bankruptcy judges have authority only to hear the matter and submit proposed findings of fact and conclusions of law to the district court. Read More ›

“One Nortel” Inches Closer to Final Adjudication of the Allocation Decision—Direct Certification to the Third Circuit Granted

In re Nortel Networks Inc., No. 15-624 (LPS), 2016 WL 2899225 (D. Del. May 17, 2016)

After the Court of Appeal for Ontario denied any further appeal to the Allocation Decision in the Canadian proceeding as a “barrier to progress”, the Delaware District Court, acting sua sponte, directed the parties to submit letter briefs on the issue of whether the District Court should grant direct certification to the Third Circuit.  Having both the benefit of the Ontario Court’s denial of further appeals, and the appeals themselves, Chief Judge Stark granted certification of an appeal of the Allocation Decision to the Third Circuit because the case involves a matter of public importance and certification will materially advance the case. Read More ›

Non-Consensual Third Party Releases Certified Directly to the Third Circuit

In re Millennium Lab Holdings II, LLC, No. 15-12284 (LSS), 2016 WL 155500 (Bankr. D. Del. Jan. 12, 2016)

[Update - Despite the Bankruptcy Court's ruling, the Third Circuit Court of Appeals denied the petition for direct certification in an order issued February 24, 2016.  The appeal will now head to the Delaware District Court.]

The Delaware Bankruptcy Court has granted direct certification of a hot-button issue surrounding confirmation of plans in bankruptcy to the Third Circuit Court of Appeals—namely, whether a bankruptcy court has the authority to release a non-debtor’s direct clams against other non-debtors without the consent of the releasing non-debtor. Read More ›

District Court Grants Direct Certification on Question of Whether Bankruptcy Courts Have Power to Transfer Cases under 28 U.S.C. § 1631

Troisio v. Erickson (In re IMMC Corp.), Civ. No. 15-1043 (GMS), 2016 WL 356026 (D. Del. Jan. 28, 2016)

The District of Delaware in this case granted direct certification to the Third Circuit on the question, “whether bankruptcy judges have the authority to order a transfer of an adversary proceeding pursuant to 28 U.S.C. § 1631.”  Op. *4-5.  The issue is whether a bankruptcy court is a “court” as defined in 28 U.S.C. § 610 that is authorized under 28 U.S.C. § 1631 to transfer a civil action to another court for want of jurisdiction.  Determining that the definition of “court” in this circumstance was a pure question of law with no controlling decision of the Third Circuit or United States Supreme Court, Judge Sleet held that certification was required under 28 U.S.C. § 158(d)(2). Read More ›

Third Circuit Takes Rare Opportunity to Explore the Four Factors Balanced When Ruling on a Stay Pending Appeal Request

In re Revel AC, Inc., No. 15-1253, 2015 WL 5711358 (3d Cir. Sept. 30, 2015)

Although seemingly clear cut and established under controlling law, the Third Circuit Court of Appeals recently took the opportunity it is so seldom given to focus on how to balance the four factors that determine whether to grant a stay pending appeal under Bankruptcy Rule 8007.  See Fed. R. Bankr. P. 8007.  As a reminder to our readers, the four factors relevant to a stay pending appeal analysis are:  (1) whether the stay applicant has made a strong showing that it is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.  Following an in-depth examination into these factors and the case precedent addressing their balancing, the Court set forth the following principles: Read More ›

“Ain’t Over Till It’s Over”: SCOTUS Holds Denial of Plan Confirmation Absent Dismissal of the Case Not a Final, Appealable Order

Bullard v. Blue Hills Bank, 575 U.S. ___ (2015)

On May 4, 2015, the Supreme Court of the United States delivered a unanimous Opinion, penned by Chief Justice Roberts, holding that an order denying confirmation but not dismissing a bankruptcy case is not a “final” order that the debtor can immediately appeal.  In so holding, the Supreme Court held that the relevant “proceeding” is the entire process of considering plans for confirmation and if the debtor has the opportunity to propose another plan, the order denying confirmation is not final and not immediately appealable as a matter of right.  Op. at 5. Read More ›

Don’t Forget To File An Appeal If You Wish To Take Advantage Of One

In re Visteon Corp., Nos. 12-3352, 12-3353, 2014 WL 4244022 (3d Cir. Aug. 28, 2014)

In this Opinion, filed on August 28, 2014, the Third Circuit reaffirmed a general legal principle:  with limited exception, in order to reap the benefit of a favorable appeal, you must first file one.  Additionally, the Third Circuit reiterated the principle that “changes in the law after settlement do not affect the validity of the agreement and do not provide a legitimate basis for rescinding the settlement.” Read More ›

Fisker’s Capped Credit Bidder is Denied Interlocutory Appeal and Direct Certification to the Third Circuit

Hybrid Tech Holdings, LLC v. Official Committee of Unsecured Creditors (In re Fisker Automotive Holdings, Inc.), No. 14-99 (GMS), 2014 WL 546036 (D. Del. Feb. 7, 2014); Hybrid Tech Holdings, LLC v. Official Committee of Unsecured Creditors (In re Fisker Automotive Holdings, Inc.), No. 14-99 (GMS), 2014 WL 576370 (D. Del. Feb. 12, 2014)

The Delaware District Court has denied Hybrid's emergency request for leave to appeal the Bankruptcy Court's order limiting its credit bid rights for cause under section 363(k) of the Bankruptcy Code as well as Hybrid's request for direct certification to the Third Circuit. Read More ›

District Court Certifies Estimation Appeal to the Third Circuit – Highlights Its Limited Role in Estimation Appeals

Specialty Products Holding Corp. v. Official Committee of Asbestos Personal Injury Claimants (In re Specialty Products Holding Corp.), No. 13-1244 (SLR), 2014 WL 545780 (D. Del. Feb. 7, 2014)

On February 7, 2014, Judge Sue L. Robinson of the District Court granted a motion for certification of an order entered by the Bankruptcy Court, estimating liability for present and future asbestos claims asserted against bankruptcy estates, for immediate appeal to the Third Circuit.  In doing so, the District Court highlighted its limited role in estimation appeals, noting that “the Third Circuit precedent gives the bankruptcy courts wide-ranging discretion in making their estimation determinations, leaving the district courts unhelpful at best, impotent at worst, in any attempts to promote the resolution of these complex cases.”  Read More ›

District Court Affirms Bankruptcy Court’s Approval of a Settlement and Structured Dismissal in the Face of an Absolute Priority Challenge

Czyzewski v. Jevic Holding Corp. (In re Jevic Holding Corp.), No. 13-104 (SLR), 2014 WL 268613 (D. Del. Jan. 24, 2014)

On January 24, 2014, Judge Sue L. Robinson affirmed a Bankruptcy Court order approving a settlement and structured dismissal of the chapter 11 cases of Jevic Holding Corp. and its affiliated debtors in the face of a challenge that such settlement, among other things, violated the absolute priority rule of section 1129 of the Bankruptcy Code.  Among other things, the Court determined that the absolute priority rule did not apply to the settlement given that it was presented outside a plan of reorganization.  Moreover, even if it did apply, the appeal was equitably moot. Read More ›