January 31, 2020

MONTH-IN-BRIEF: Bankruptcy & Finance

Janet M. Nadile, Taryn Darling

Bankruptcy Law

File That Appeal Before It’s Too Late

By Michael Enright

The Supreme Court has held that the time to file an appeal starts running even though the lower court has not yet ruled on requests for attorneys' fees or costs incurred in litigating the case. Ray Haluch Gravel Co. v. Cent. Pension Fund of Int'l Union of Operating Eng'rs & Participating Emp'rs, 571 U.S. 177, 186 (2014); Budinich v. Becton Dickinson & Co., 486 U.S. 196, 202 (1988). Also, FRCP 58(e) provides that "[o]rdinarily, the entry of judgment may not be delayed, nor the time for appeal extended, in order to tax costs or award fees." Nonetheless, problems continue to arise when a court enters an order disposing of the merits but continues to consider fees and costs in connection with the underlying dispute. Most recently, in In re Empresas Martinez Valentin Corp., Case No. 18-2103 (1st Cir. Jan. 28, 2020), the Court of Appeals held that the time for appeal started to run from the Bankruptcy Court’s entry of its order that a creditor had willfully violated the automatic stay.  The fact that months of continuing litigation ensued over the amount of fees and costs to be awarded for the stay violation did not extend the deadline to appeal. As the Court noted “[t]he bankruptcy court's April 4 ruling otherwise disposed of all claims and issues in the case, save for [the debtor’s] request for costs and attorneys' fees ‘incurred in the prosecution of this adversary proceeding,’ with the amount to be determined by further submissions by the parties.” Therefore, an appeal filed 237 days later, after the fee and cost issues ultimately were decided, was too late.  The Court explored a variety of means to bridge that gap, but it ultimately dismissed the appeal as untimely. The decision is a good reminder that a party dissatisfied with a ruling will want to carefully consider filing an immediate appeal if there is any argument that all that remains is the determination of fees and costs.

Janet M. Nadile

Counsel; Simpson, Thacher & Bartlett LLP

Janet M. Nadile is Counsel at Simpson, Thacher & Bartlett LLP.  Her practice focuses on a broad array of commercial law with an emphasis on issues regarding Articles 8 and 9 of the Uniform Commercial Code.  She advises lenders and borrowers on all aspects of drafting and negotiating collateral security documents in a wide variety of secured transactions, including credit facilities, asset based lending, secured bond transactions, project finance and funds finance.  She also advises on all matters involving collateral subject to the UCC and other statutes, frequently for the technology, media, telecommunications, automotive, healthcare and natural resources industries.  Janet created and conducts the Firm-wide CLE seminars on various aspects of secured lending.

Taryn Darling

Board Member, William H. Dwyer Inns of Court

Taryn began her career as a bankruptcy lawyer almost ten years ago. Her practice includes reorganization, insolvency, receivership, work-outs, and bankruptcy and all related litigation. Taryn has litigated at the trial level and appellate level on behalf of her clients in a number of adversary proceedings and in consumer protection litigation. Taryn’s clients include individuals, business owners, and closely held corporations and businesses. Her breadth of experience in the area of bankruptcy and insolvency enables her to take a preventive approach when clients come to her at the outset of a problem. Taryn develops creative solutions to mitigate the impact or consequences when it becomes clear that a bankruptcy or receivership is the best course of action.