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Should a bankruptcy court’s preliminary injunction be subject to appellate review? Taking the negative position, the U.S. District Court for the Eastern District of New York recently held that it had the “discretion … to decline to hear” an appeal from a bankruptcy court’s preliminary injunction. Navient Solutions, LLC et al. v. Homaidan et al., 2022 WL 17252459, *4 (E.D.N.Y. Nov. 28, 2022), quoting In re Kassover, 343 F.3d 91, 95 (2d Cir. 2003) (Note: The author succeeded in losing the appeal in Kassover.) The court’s unremarkable findings purported to support its position: a) the preliminary injunction was not a final order; b) leave to appeal was not warranted; and c) the appellant failed to show why the “extraordinary remedy” of mandamus was warranted. But the court conceded that district courts are split on the important issue of whether bankruptcy court preliminary injunctions, admittedly interlocutory, are appealable to the district court as of right under 28 U.S.C §1292(a)(1) (courts of appeals have jurisdiction, and appellate review exists as of right over “interlocutory orders … granting [or] refusing … injunctions”). In the court’s view, 28 U.S.C. §158(a)(1) required the court to review only “final” orders and “does not mention preliminary injunctions.” Id. at *2. Besides, said the court, the bankruptcy court will eventually “revisit the merits and appropriate parameters of the Preliminary Injunction.” Id. at *3.
By Amanda Bronstad
On Jan. 30, the U.S. Court of Appeals for the Third Circuit reversed a bankruptcy judge's decision, concluding that Johnson & Johnson subsidiary LTL Management was not in financial distress at the time it filed its Chapter 11 case in 2021.
Eleventh Circuit Stops Plan Confirmation Stampede
By Michael L. Cook
In a recent ruling, the Eleventh Circuit upended a hastily confirmed reorganization plan. Its holding should stop the stampede known as the “confirmation express.”
Treating Student Loan Debt Relief By Standardizing 'Undue Hardship' In Bankruptcy Code
By Rudolph J. Di Massa and Diane J. Kim
On Aug. 24, 2022, President Joe Biden announced the plan to forgive up to $10,000 in federal student debt for qualifying borrowers. This relief, however, was challenged in the courts and is now pending before the U.S. Supreme Court.
Duties of and Risks to Directors and Officers of Insolvent Enterprises
By Marshall S. Huebner and Amber Leary
Traditionally, the bankruptcy risk for D&Os has been fairly low. Several recent developments have, however, shifted the landscape somewhat and altered the risk profile.