Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

BankruptcyThe Bankruptcy StrategistFeatures

Third Circuit Sides With Magistrates On Bankruptcy Appeals

By Michael L. Cook
June 30, 2025

“We hold that, upon consent of the parties and referral by a district court, a magistrate judge may enter a final judgment in a bankruptcy appeal.” In re MTE Holdings LLC, 2025 WL 5682927*4 (3d Cir. May 7, 2025). This holding represents a split with the Fifth and Seventh Circuits. See, e.g., In re Elcona Homes Corp., 810 F. 2d 136, 140 (7th Cir. 1987) (“… the district court did not have the authority to refer the appeal from the bankruptcy court to a magistrate….”); Minerex Erdoel, Inc. v. Sina, Inc., 838 F. 2d. 781, 785 (5th Cir. 1988) (“… reference by District Court to a magistrate of an appeal from a bankruptcy court decision was not proper.”) See also, Virginia Beach Fed’l. Sav. and Loan Ass’n. v. Wood, 901 F.2d 849, 851 (10th Cir. 1990) (dicta) (“… magistrates are not permitted to enter final decisions in bankruptcy appeals.”). Most significant, MTE effectively overrules In re Morrissey, 717 F. 2d 100, 101 (3d Cir. 1983), an earlier Third Circuit decision relied on by the Seventh and Fifth Circuits in Elcona and Minerex.

Procedural Facts


The bankruptcy court had awarded summary judgment for the defendant in an adversary proceeding over withheld royalties. The plaintiff appealed to the district court, but the parties on the appeal had “consented to proceed before a magistrate judge for all proceedings, including final judgment.” Id., at *1. Relying on 28 U.S.C. §636(c), the magistrate judge (hereinafter “magistrate”) affirmed the bankruptcy court’s judgment, but the Court of Appeals affirmed in part and remanded on the merits after disposing of the jurisdictional issue. But the appellate jurisdictional analysis here is important.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs Image

A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.

Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Blockchain Domains: New Developments for Brand Owners Image

Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.

Coverage Issues Stemming from Dry Cleaner Contamination Suits Image

In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.