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November 4, 2008

Florida Bankruptcy Court Certifies Question of First Impression under BAPCA for Interlocutory Appeal

28 U.S.C. § 158(d)(2)(A), I have learned, is the bankruptcy equivalent of 28 USC 1292(b), and allows a bankruptcy district court to certify certain questions for interlocutory, immediate appeal. The bankruptcy court for the middle district of Florida recently certified a question of first impression for immediate appeal to the Eleventh Circuit. In In re Bluestone Real Estate & Constr. Co., __ F.Supp.2d __ (Bankr. M.D. Fla. 2008), the court had first, and repeatedly, asked the parties to seek certification, but -- sounding somewhat exasperated -- eventually did it on its own. (It also provides a useful roadmap for this seldom used bankruptcy-specific procedure). The issues the court certified:

1. Whether a bankruptcy court is prohibited from approving a change in management of a Chapter 11 debtor by permitting the debtor in possession to engage a chief restructuring officer (“CRO”) under 11 U.S.C. §§ 327, when a motion to appoint a Chapter 11 trustee under 11 U.S.C. § 1104(a) is then pending before the bankruptcy court.
2. Whether, pursuant to 11 U.S.C. § 1107(a), a bankruptcy court may impose limitations or conditions upon a debtor in possession in order to supplement the debtor in possession’s rights, powers, and duties, which are performed by natural persons charged with managing the business of the debtor in possession, such that the CRO has sole authority to manage the debtor in possession.

As with 1292(b), the question whether to accept the appeal is a matter of discretion with the appellate court, so stay tuned.

November 4, 2008 | Permalink


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