Supreme Court rules denial of proposed bankruptcy repayment plan not final action News
Supreme Court rules denial of proposed bankruptcy repayment plan not final action

[JURIST] The US Supreme Court [official website] ruled [opinion, PDF] Monday in Bullard v. Blue Hills Bank [SCOTUSblog materials] that a bankruptcy court’s order denying confirmation of a debtor’s proposed repayment plan is not a final order that the debtor can immediately appeal. Chief Justice Roberts wrote the opinion for a unanimous court. In the opinion, the court stressed the unique characteristics of bankruptcy proceedings, in comparison to ordinary civil litigation and grappled with the appropriate limits of an immediately appealable proceeding in the context of Chapter 13 bankruptcy [US Courts backgrounder] plans. The petitioner, Bullard, asked the court to view each proposed repayment plan submitted to the bankruptcy court as a unique proceeding. Whereas, the respondent viewed each proposed plan as a part of the larger proceeding that is subject to a final action only when a plan is confirmed, or alternatively, if the debtor fails to offer any confirmable plan resulting in the dismissal of the case. The court held in favor of the bank, stating:

The relevant proceeding is the process of attempting to arrive at an approved plan that would allow the bankruptcy to move forward. This is so, first and foremost, because only plan confirmation—or case dismissal—alters the status quo and fixes the rights and obligations of the parties. When the bankruptcy court confirms a plan, its terms become binding on debtor and creditor alike.

The court heard oral arguments [JURIST report] in the case in early April. At oral arguments, the court evaluated the practical implications of whether debtors would have an adequate opportunity to seek appellate review [SCOTUSblog op-ed] if the plan denial itself is not treated as an appealable order. The justices addressed three mechanisms for appeal that would remain if the denial itself could not be appealed: interlocutory appeal, refuse to accept the rejected plan and appeal following dismissal of the action, or propose a plan that is eventually accepted by the bankruptcy court and appeal the accepted plan. In Monday’s opinion, the court held that a debtor whose proposed repayment plan was rejected is not without means to appeal its decision through an interlocutory appeal and an order denying confirmation of a proposed repayment plan is not a final action.