May 31, 2016 Practice Points

District Court Certifies Appeal Regarding Fee Claim to Third Circuit

The case is Wilmington Trust Company v. Tribune Media Company.

By Rachel L. Biblo

In a memorandum opinion and order (Wilmington Trust Company v. Tribune Media Company, No 15-1116 (D. Del. Apr. 12, 2016)), Judge Gregory M. Sleet of the United States District Court for the District of Delaware granted Wilmington Trust Company’s motion seeking direct certification to the United States Court of Appeals for the Third Circuit of an appeal regarding whether a creditor with a prepetition, contractual entitlement to recover professional fees is entitled to an allowed, unsecured claim for those fees under section 502(b)(1) of title 11 of the United States Code where those fees are incurred post-petition. Pursuant to its claim, among other amounts, Wilmington Trust Company seeks $30,289,093.33 in fees and expenses. Judge Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware issued a memorandum and order sustaining the objection of Tribune Media Company and its affiliated reorganized debtors to the Fee Claim, and subsequently, Wilmington Trust Company filed a notice of appeal. Section 158(d)(2) of title 28 of the United States Code governs motions for direct appeal to the court of appeals. Sections 158(d)(2)(A)(i) provides that a district court must certify a final order for immediate appeal if the court determines that, among other things, the order involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United States. A “controlling decision” of the Third Circuit for purposes of Section 158(d)(2)(A)(i) is a decision that “admits of no ambiguity in resolving the issue.” The district court determined that the issue set forth in Wilmington Trust Company’s motion was a question of law and found no controlling third circuit or Supreme Court decision on such issue. Accordingly, the district court determined that Section 158(d)(2)(A)(i) required certification of the appeal to the Third Circuit.

As of the date hereof, the Third Circuit has not ruled on the fee claim.

Rachel L. Biblo – May 31, 2016