Supreme Court Concludes That Orders Denying Confirmation Of A Bankruptcy Plan Are Not Final For Purposes Of Appeal, Resolving Circuit Split

As previously reported, on December 12, 2014, the Supreme Court granted certiorari on an appeal from the decision of the First Circuit Court of Appeals in Bullard v. Hyde Park Savings Bank, to resolve a circuit court split regarding whether an order denying confirmation of a bankruptcy plan is a final order appealable as of right under 28 U.S.C. § 158(d)(1). On May 4, 2015, the Supreme Court issued its opinion, concluding that a bankruptcy court's order denying confirmation of a chapter 13 debtor's proposed repayment plan is not a final order that the debtor can immediately appeal. Chief Justice Roberts wrote the opinion for a unanimous Court. The Court's decision in Bullard resolves a circuit split, affirming the approach of the majority of Circuit Courts; the First, Second, Sixth, Eighth, Ninth and Tenth Circuits had each previously ruled that an order denying confirmation of a reorganization plan is not final if the case has not been dismissed and the debtor remains free to propose another plan.1 In contrast, the Third, Fourth and Fifth Circuits had held that such an order could be final, even if the underlying bankruptcy case had not been dismissed.2

Chief Justice Robert's opinion recognizes that the concept of finality in the bankruptcy context differs from ordinary civil litigation. Bullard v. Blue Hills Bank, 135 S.Ct. 1686, 1691 (2015). "A bankruptcy case involves 'an aggregation of individual controversies,' many of which would exist as stand-alone lawsuits but for the bankrupt status of the debtor." Id. at 1692 (internal citation omitted). Accordingly, appeals as of right from orders of the bankruptcy court are authorized from "final judgments, orders and decrees . . . in cases and proceedings." Id. (emphasis added) citing 28 U.S.C. § 158(a). His opinion concludes that for the purposes of determining whether a court's order is final and immediately appealable, the relevant proceeding is the "entire process" of attempting to arrive at an approved plan that would allow the bankruptcy case to move forward, "culminating in confirmation or dismissal." Id. at 1693. As a result, only plan confirmation or case dismissal alters the status quo and fixes the parties' rights and obligations. Id. At 1692. In contrast, denial of confirmation with leave to amend "changes little." Id. At 1693. The opinion likens this state of affairs to the finality of "a car buyer's declining to pay the sticker price," noting "[i]t ain't over till it's over."...