Sixth Circuit: Denial of a Bankruptcy Reorganization Plan Is Not a Final Order
The Sixth Circuit Court of Appeals recently held that a district court's denial of a Chapter 11 reorganization plan in bankruptcy proceedings is not a "final appealable order." The Court began its analysis by reaffirming the general principle that a district court order remanding a case to a bankruptcy court is not final for appellate purposes unless the remand is "ministerial." The Court then noted, "Far more than a few ministerial tasks remain to be done" after a court rejects a confirmation plan. The debtor may propose another confirmation plan or abandon the petition entirely. Additionally, any new plan may require further fact finding, and the creditors may accept the revised plan without further litigation. No order can be considered "final" before some of these decisions are made. The court also stated that if a debtor prefers immediate appellate review, the debtor may seek certification of the interlocutory order rejecting the plan. The Sixth Circuit joins four other federal circuits holding that denial of a reorganization plan is not a final order, while three other circuits have held the opposite. A widening divide among the circuits may increase the likelihood of forum shopping, and correspondingly increase the likelihood that the United States Supreme Court may eventually decide the issue. The case is In re William Edwin Lindsey (Lindsey v. Pinnacle National Bank, et al.), Case No. 12-6362 (E.D. Mich. August 13, 2013).