On 12/14/14, the US Supreme Court Granted Petitions for Certiorari (ie has agreed to review) in Two Different Bankruptcy Cases, Agreeing to Review Two Different Bankruptcy Issues
There is no right to appeal a bankruptcy issue from a US Court of Appeals, to the US Supreme Court. Instead, a party requests the US Supreme Court to review a bankruptcy decision (and most other kinds of decisions) of a US Court of Appeals, by filing a Petition for Certiorari with the US Supreme Court. Thousands of Petitions for Certiorari are filed each year, with the US Supreme Court, in various subject matters of cases. The US Supreme Court only grants certiorari (agrees to review the US Court of Appeals decision) in a tiny percent of those petitions for certiorari, granting certiorari in approximately 80 to 90 cases per year. As a result, conflicting decisions, by various US Courts of Appeal, can exist for years, before the US Supreme Court grants certiorari.
On 12/14/15, the US Supreme Court granted petitions for certiorari in two different bankruptcy appeals, thereby agreeing to review the US Court of Appeals decisions, on two different bankruptcy issues.
First, the U.S. Supreme Court on 12/15/14, granted certiorari (ie, agreed to review), the question of whether those who fail to win confirmation of their bankruptcy-exit plans, whether consumers or businesses, can appeal the loss, immediately, or whether orders denying confirmation of a proposed Chapter 11, 12 or 13 plan are interlocutory orders, which cannot be appealed until the end of the case. The appeal where the US Supreme Court granted certiorari was a chapter 13 bankruptcy case, of an individual homeowner Louis Bullard, who failed to win court approval of his proposed Chapter 13debt-repayment plan, then lost again when he asked an appeals court to review the decision. Denial of confirmation isn’t a final order, it is an interlocutory order, the First Circuit Court of Appeals ruled, so it can’t be appealed immediately. Bullard’s lawyers asked the high court to weigh in on the question, to clear up the split of opinion among the nation’s appeals courts, and to reverse rulings that they say feed an “inefficient and wasteful” process.
Second, in a different Chapter 13 case, converted from Chapter 13 to Chapter 7, the US Supreme Court, on 12/15/14, granted certiorari, to review what should happen to the pool of money that accumulates from a Chapter 13 debtor making monthly Chapter 13 plan payments, where, instead of continuing in Chapter 13, the debtor converts the debtor’s Chapter 13 case to Chapter 7. In Chapter 13, the debtor makes the monthly plan payment, called for by debtor’s proposed Chapter 13 plan, starting 30 days after the debtor’s Chapter 13 bankruptcy case is filed, and monthly, each month thereafter. However, before the Chapter 13 plan is confirmed, the Chapter 13 trustee does not distribute the monthly plan payments to the creditors. Instead, the Chapter 13 Trustee holds all those monthly plan payments, until if and when the Bankruptcy Court confirms (approves, so it goes into effect) debtor’s proposed Chapter 13 plan. The question is, who is entitled to receive the accumulated plan payments, where the debtor’s case is converted from Chapter 13 to Chapter 7, before/without a Chapter 13 plan being confirmed? Is the Chapter 13 Trustee required to return all undistributed plan payments to the debtor? Or are the creditors entitled to be paid those accumulated plan payments, as specified in the (not confirmed) proposed Chapter 13 plan? Or is the Chapter 13 Trustee required to turn that accumulated plan payments over to the Chapter 7 Trustee. In the US Court of Appeals for the Ninth Circuit, at present, the paid to Chapter 13 Trustee, but not yet distributed, Chapter 13 plan payments are returned to debtor, by the Chapter 13 Trustee, if debtor’s Chapter 13 plan is not confirmed, and debtor’s Chapter 13 case is converted to Chapter 7.
Two certiorari grants are reported in the 12/15/14 ABI (American Bankruptcy Institute) e-newsletter