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Appeals Under American Bankruptcy Code.

Historically appeals from the bankruptcy court have gone to the district court where the bankruptcy court sits. For a brief period between 1978 and 1984, a large share of such appeals would go directly to the Court of Appeals or bankruptcy appellate panels established in each of the circuits. Because most of the circuits did not set bankruptcy appellate panels and because the direct appeal possibility was substantially reduced in the 1984 act. We are back roughly where we started before 1978, with most appeals going to the district court judge.

To the extent that a bankruptcy judge’s decision is on a non-core, related matter and thus constitutes only proposed findings on fact and conclusions of law to the district court, there is, in effect, a direct appeal. And a “de novo”  (appellate standard for review in legal issues) review under section 157 © (1). In core proceedings, section 158 9a) states that the district shall hear appeals.” from final judgments, orders, and decrees.

Section 158 (b) authorizes the establishment of bankruptcy appellate panels by the judicial council of a circuit. If such a panel is established, appeals may be taken to it, but only if all the parties consent and only if the district judges in a particular district within the circuit authorize an appeal to the panels. At this writing, only the Ninth Circuit has such a panel.

Appeals from the district court’s decision and the bankruptcy appellate panel’s decision are taken to the court of Appeals.

In Bankruptcy practice, the more troubling question is what orders and decisions can be appealed rather than what court appeals are. Section 158 explicitly authorizes appeals of “final judgments, orders. and decrees”. Volumes could be written about whether a decision is interlocutory or final. It may be even more challenging to tell the difference between final interlocutory orders in bankruptcy law than in general. Any orders that merely delay the decision on or realization of a right are interlocutory. Because many orders in a bankruptcy case involve postponement rather than an immediate foreclosure of ownership, the line between finality and interlocutory status is significantly blurred.

On the other hand, the courts in bankruptcy cases have been liberal in finding the order final. This is partly due to a history of providing more incredible opportunities to appeal in bankruptcy during a pending case. The first circuit stated:

Were this not a bankruptcy case, we doubt that the kind of order before us would be considered Final. Congress has long provided that it may immediately appeal rulings in a bankruptcy case if it finally disposed of a discrete dispute within the large case.

Another test that the courts apply is whether the order requires further proceedings before the court thoroughly evaluates its outcome. For example, the order is final if the order requires no other action than simple” managerial” or “mechanical” proceedings. Still, if significant further proceedings are needed, the charge is interlocutory.

Some examples of final orders are an order of allowing the claim, even if the actual amount to be realized by the lawsuit is undetermined, an order dismissing an objection to discharge, an order to sell the property of the estate, an order disallowing or allowing homestead exemption, and order for the turnover of property, an order granting relief from the automatic stay, and an order fixing venue.

Examples of orders which are not final include an order granting summary judgment for the debtor against a city for post-petition service, a ruling by the bankruptcy court permitting the debtor in possession to recover amounts paid on a mortgage, an order denying a motion to bar experts, and bankruptcy court’s determination on the validity of a disclosure statement.