Don’t Hesitate to Appeal an Order Denying Relief from an Automatic Stay

In Ritzen Group, Inc. v. Jackson Masonry, LLC, the Court held that “[a] bankruptcy court’s order ruling on a stay-relief motion disposes of a procedural unit anterior to, and separate from, claim-resolution proceedings.” For this reason, the Court upheld the lower courts’ rulings that under Bankruptcy Code section 158(c)(2) and Bankruptcy Rule 8002(a) the time to appeal an order denying relief from the automatic stay expires 14 days after the Bankruptcy Court’s entry of such order. Prior to this decision, the First and Third Circuits held that an order denying stay relief could lack finality and depended on whether the issues underpinning the decision were “fully developed.” Eight other circuit courts held that denial of a motion for relief from stay was categorically appealable. This decision provides clarity for practitioners. If you wish to appeal an order denying a motion for relief from stay, you must immediately do so.  However, the Supreme Court declined to decide whether an order denying a motion for stay without prejudice would be immediately appealable as that issue was not in front of the Court. 

Susan Golden is a partner at Kirkland & Ellis in New York, New York.

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