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An Appealing Proposition

By William Choslovsky
July 31, 2006

Let's face it, bankruptcy can be frustrating, not to mention costly and lengthy. First is the sober reality that in almost all cases, creditors ' and unsecured creditors especially ' will not be paid in full. Second is the fact that making sure your client's rights are protected, and recoveries maximized, takes time, money, and involvement in the bankruptcy process, all of which can be disruptive to its ongoing operations. The frustration factor, however, reaches its zenith with bankruptcy appeals. Unlike 'normal' appeals in state and federal courts, bankruptcy appeals provide for two levels of automatic appeal. Bankruptcy orders are first appealed to the district court or, in certain jurisdictions, to the bankruptcy appellate panel (BAP), and thereafter each party has the automatic right to appeal anew to the circuit court.

This article briefly reviews the existing two-tier bankruptcy appeal process and its attendant problems. It then summarizes the new, 'direct appeal to circuit court' alternative and highlights some of the opportunities ' and problems ' the new mechanism poses.

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