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The Bankruptcy StrategistFeaturesBankruptcyLitigationUnited States Supreme Court

Move Quickly: Supreme Court Holds that Bankruptcy Court's Denial of Motion for Relief from the Automatic Stay Is a Final Appealable Order

By Louis F. Solimine, James J. Henderson and Andrew L. Turscak, Jr.
February 01, 2020

In a recent, unanimous opinion authored by Justice Ginsburg, the United States Supreme Court affirmed lower court decisions holding that a bankruptcy court order denying a motion for relief from the automatic stay constitutes a final order that must be appealed within the time provided under Federal Rule of Bankruptcy Procedure 8002. Ritzen Group, Inc. v. Jackson Masonry, LLC, 598 U.S. ___ (2020). As a result, creditors and other parties in interest now must carefully assess, even more so than before, if and when to file in the bankruptcy court a motion for relief from the automatic stay given the finality and ensuing consequences of an adverse ruling.

The Automatic Stay and Appeals of Bankruptcy Decisions

The filing of a bankruptcy petition immediately stays almost all actions against the debtor, and it prohibits a creditor from continuing or commencing acts that would impact the debtor or its estate. See, 11 U.S.C. §362(a). This is commonly referred to as the "automatic stay." A party in interest who wishes to continue or commence an action against the debtor may file a motion with the bankruptcy court seeking relief from the automatic stay to allow the party to do so. See, 11 U.S.C. §362(d). After a relief from stay motion is filed, the court will conduct a hearing and determine whether cause exists to grant the relief sought in the motion.

Decisions of a bankruptcy court are appealable by right following entry of "final judgments, orders and decrees." 28 U.S.C. §158(a). An order of the bankruptcy court is considered final if the order definitively disposes of "discrete disputes within the overarching bankruptcy case." Ritzen Group, 598 U.S. at ___ (citing Bullard v. Blue Hills Bank, 575 U.S. 496, 501 (2015)). A party must appeal a final order within fourteen days of entry of such an order by the bankruptcy court. Fed. R. Bankr. P. 8002(a). If a party files a notice of appeal of a final order outside the time period set forth in Federal Rule of Bankruptcy Procedure 8002, the appeal is untimely. The question in Ritzen Group was whether an order denying a motion for relief from the automatic stay is a final, appealable order, thus triggering the 14-day appeal period.

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