Monday, September 08, 2014

Both Sides Support Cert in Appeal of Order Denying Chapter 13 Plan

The Supreme Court may add another bankruptcy case to its agenda this term in a case where both the Petitioner and the Respondent support the grant of cert.    No. 13-1416, Gordon v. Bank of America.   The Petition can be found here and the Response in Support is here.   Of course, the parties want to reverse the Tenth Circuit for very different reasons.

The case involves a chapter 13 debtor who included an "object or forfeit" provision in his plan stating that if a creditor did not object to the plan, it would be bound to the amount of its claim listed in the plan.   No creditors objected to the plan nor did the Chapter 13 trustee object.   The Bankruptcy Court requested briefing but ultimately found the provision allowable and confirmed the Plan.   Bank of America appealed.    The District Court found that the object or forfeit provision was invalid and reversed.   The Debtor then appealed to the Tenth Circuit which found that an order denying confirmation of a plan was not appealable.  It dismissed the appeal for lack of jurisdiction.  Bank of America v. Gordon, 743 F.3d (10th Cir. 2014).   Instead, the Tenth Circuit said that the Debtor could propose a new plan without the offending provision and appeal that order or allow the case to be dismissed and appeal.    

The Debtor filed a petition for cert in which it requested that the Supreme Court rule that an order denying confirmation of a chapter 13 plan is appealable.   It noted that there is presently a 6-3 split among the circuits.   Bank of America responded and said that orders denying confirmation on a legal ground should be appealable.  It said that it wanted an order from the Tenth Circuit striking down the object or forfeit provision and that it could not get that ruling because of the Tenth Circuit's approach to appellate jurisdiction.   

It will be interesting to see whether the Supreme Court takes a case where both parties want to see cert granted and where there is a clear circuit split.

There is a Texas connection to this case.   Douglas Kiel, the Chapter 13 Trustee, previously worked for Al Olson and Deborah Langehennig, two Chapter 13 Trustees in the Western District of Texas.

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