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How Many Bankruptcy Appeals?

posted by Bob Lawless

Classes started today. This semester I am teaching Business Bankruptcy, which principally covers chapter 11. We were talking about the bankruptcy court system, a topic that does not always get covered in great detail in the other bankruptcy courses, and the appellate steps in the bankruptcy system. A student asked how many U.S. Court of Appeals cases each year involve bankruptcy.

That was a good question, so I looked it up. What's your guess for the number of U.S. Court of Appeals cases, as reported by the U.S. judiciary, that involve bankruptcy each year? Answer after the jump.

864

That is for the twelve months ended March 31, 2009, the most recent period for which data are available. . See Table B-5 here. I knew the number was small, but that was even lower than I expected. In contrast there were about 880,000 total bankruptcy petitions in the period from April 2007 - March 2008, which would roughly be the time during which the cases involving the 864 appeals were filed. With bankruptcy filings rising, there probably will be more appeals, but I bet it's not a 1:1 rise.

Comments

Wow! That's low. I saw quite a few of those this past year in the 5th Cir.

It might be because (on the consumer side)there is very little incentive to appeal. Consumer BK firms keep in the black by creating a system. I can see a big wig getting big bucks for an appeal in an 11 but in a consumer 13 or 7 there is almost nothing in it unless it is for fees/damages in an Adversary for violation of Stay or Discharge. I don't want to jinx us but we may have one of those as we just heard a matter of first impression before our bk judge just last week(dischargability). I mean most 13 and 7 debtors are.... well.... poor. 11 Attorneys get big $$ for putting up a fuss. Its clear that in 7s especially its all but impossible get anymore fees from the debtor or estate post-petition. (unless the trustee abandons a cause of action and you take it over) In 13s there is a little room to recoup Attys fees but usually very very little especially on say something like appealing the constitutionality of Agencies like Consumer Credit Counseling holding the keys to the Bankruptcy system. Absolutely no money in stuff like that. That's why no one has appealed that provision..... I think,.,.

Table C-2 shows another 1,800+ bankruptcy appeals to the District Courts, and another 399 withdrawals to the District Court from Bankruptcy Courts. I practice in the Eastern District of Michigan, where bankruptcy appeals go across the street to District Court, especially in 7's and 13's.

Of course I now feel pretty silly because I just noticed that the previous poster, Greg Jones, pointed out where the number of bankruptcy appeals can be found. So apparently the data are indeed available. Still -- it would be nice to know reversal rates. I didn't notice those.

Make that "the number of bankruptcy appeals heard by the district courts." (Clearly, I'm not having a good day!)

I didn't study this in detail, but one of the last columns lists the reversal rate--looks like about 14% for bankruptcy cases generally.

That's a dramatic change from many years ago when I conducted some anecdotal review of 6th Circuit reversals. As I recall it was more like 40% for bankruptcy appeals in the Sixth.

And, 50-60% of appeals go to BAPs in those circuits that have them. The intermediate appellate level means that it can take 2-3 years to get a decision on the merits from a circuit court. Many cases will become moot in that time (especially chapter 13 issues). As noted above, the double layer of appeal also makes it more expensive to prosecute an appeal up to the circuit. This makes it harder for consumer debtors, who have little ability to pay, to keep pushing appeals up to the circuit.

Somehow my original post -- in which I wrongly said that there were no data on the number of bankruptcy appeals heard in district courts -- got deleted or didn't get posted or something. Not only are there are such data but the previous poster had pointed them out. That was why I said I felt pretty silly.

I see information on rates at which courts of appeals reverse district courts, but I see no information on rates at which district courts reverse bankruptcy courts. I've asked the clerk of our court of appeals (7th Cir.) about this in the past, since he regularly makes a statistical presentation at our annual circuit conference. He is unaware of any information on district court reversals of bankruptcy court decisions. It would be interesting to know.

Liked your brief in Espinosa T.. That was you right?.. One of the few 13 appeals to make it all the way up. Liked the whole Res Judicata argument finality of Discharged plans.. Why wouldn't it be Moot as well? I mean whenever I see those appeals the Cir's struggle with "unscrambling the egg" in reversing Equitable Mootness findings. You probably addressed it, I just cant remember right now... See them in 11s and 7s mostly though. But there is a plan that you would have to unscramble, Student loans getting if reversed more than they should have in the plan???.......

Bit off subject sorry. I get a little geeky about this stuff... and its a pleasant distraction from the battles we fight every day.. plus this is the only distraction my employer lets me enjoy during work besides Pandora Radio...:)

Not me. I haven't written a brief in years. I'm out of the business.

Thanks Ben... I should have been more clear. Tara Twormey. One of the posts right in between yours.... I get that problem sometimes with my posts. Sometimes they even post twice...lol.. Katie and Tara do some great research pubs. on consumer bk issues..

It may be statistically surprising there are so few bankruptcy appeals, but it is understandable.
After incurring the rare privilege as an unsecured creditor of being incarcerated for 42 days for contempt after being unable to pay a $3K sanction for accusing estate counsel of fraud for gorging on the dividend after promising it for creditors I think I understand why there are so few bankruptcy appeals.
Even Justice Rhinquest complained he couldn’t get a handle on the bankruptcy code.
It’s all equity, not law.
Almost all bankruptcy appeals are left challenging the bankruptcy court’s discretion - an impossible standard.
And, every bankruptcy attorney will at some time face the court with a request for fees.
A criminal attorney can battle the court to the street and the judge is powerless to control fees - but not so in bankruptcy court.
Bankruptcy judges exercise the most awesome summary powers of any jurist to accuse, prosecute, rule, sentence, and reward or punish parties and their attorneys.
That threat is how bankruptcy judges protect their decisions.
Such power is also why attorneys litigate to settlement so an appeal is avoided.
Raising the court’s summary ire is counterproductive to a bright career.
I could go on and on mentioning the unmentionable, which is what this Blog and my experience in bankruptcy court has taught me to look for.

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  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless (rlawless@illinois.edu) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.

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