Law Review: Jonathan M. Seymour, Bankruptcy Appeal Barriers, 82 Wash. & Lee L. Rev. 87 (2025).

Available at:   https://scholarlycommons.law.wlu.edu/wlulr/vol82/iss1/4

Abstract:

Appeals in bankruptcy do not look like appeals elsewhere in the federal court system. In particular, bankruptcy appeal barriers are strikingly distinctive. These barriers serve outright to block an appeal from being decided. An appellate court may dismiss an appeal, rather than consider the merits, if facts on the ground have changed so much since the original decision that providing a remedy to an appellant, even if victorious, would not be prudent. Take ongoing litigation in the Boy Scouts bankruptcy case. A plan of reorganization was confirmed fixing the entitlements of victims to compensation. Dissenting creditors argued bitterly the plan was unlawful and have appealed. And they have been proven right: The Supreme Court recently found in its Purdue Pharma decision that bankruptcy courts lack the authority to approve the plan’s central legal device. Even so, those outraged creditors may receive nothing. The Boy Scouts argue that their appeal should be dismissed without reaching the merits because the plan is, in key respects, already implemented. And the existing case law surrounding bankruptcy appeal barriers offers considerable support for this outcome.

This Article attempts both to assess the significance of bankruptcy appeal barriers and to evaluate potential justifications for them. These barriers matter deeply to affected litigants but also have systemic consequences. The constitutional legitimacy of the bankruptcy courts is predicated on their supervision by Article III judges. This supervision is substantially eroded by bankruptcy appeal barriers. Nor are these concerns wholly abstract. Bankruptcy judges are powerful. Appeal subjects the insular world of bankruptcy to outside scrutiny from generalist judges who do not necessarily buy into the precepts of bankruptcy culture and are not presented with the same in-the-moment incentives as bankruptcy judges. This Article additionally finds troubling the degree to which some appellate courts seem ready to resort to appeal barriers as an escape hatch to avoid deciding appeals even in quite simple cases, often involving unsophisticated parties. The justifications for bankruptcy appeal barriers, therefore, require a careful look.

Normatively, this Article suggests that bankruptcy appeal barriers are on shaky ground. To make the case that bankruptcy appeal barriers could be sharply constrained or even abolished, this Article draws analogies both to the more general federal law of remedies, and to instances under state law—such as Delaware corporate law—where appellate courts must grapple with how to engage in an after-the-fact evaluation of an already consummated transaction.

Commentary:

One notable and conspicuous omission in Bankruptcy Appeal Barriers is its near-total silence on appeals arising in Chapter 13 cases, writing with the assumption that "bankruptcy"  means "corporate bankruptcy".   While Prof.  Seymour’s analysis of equitable and statutory mootness is incisive and thorough for Chapter 11—particularly large corporate reorganizations—the article does not meaningfully engage with how appeal barriers affect individual debtors, whether under Chapter 7 or Chapter 13, who constitute the vast majority of bankruptcy filers. This omission is significant for several reasons:

• Numerical Importance: Chapter 7 and Chapter 13 consumer filings vastly outnumber Chapter 11 cases by at least an order of magnitude, not only in terms of numbers of cases,  but arguably even in terms of the amount of debt involved. The appellate issues that arise—such as plan confirmation denials, feasibility, good faith findings, and motions to dismiss—are not only common but carry enormous practical consequences for consumer debtors, creditors and the economy as a whole.
• Unique Appeal Dynamics: The issues that trigger appeals in Chapter 13 are often final for debtors in practical terms, yet not considered final orders under Bullard v. Blue Hills Bank, leading to additional procedural confusion. The article references Bullard but does not explore its chilling effect on Chapter 13 appeals or how it interacts with equitable mootness.
• Barriers Without Doctrinal Support: While Equitable mootness is rarely explicitly invoked in Chapter 13 appellate rulings, its same bases—finality, reliance, disruption—are sometimes used informally to dismiss appeals as moot or futile, with the effects of this  informal "mootness creep" in  Chapter 13 cases unexplored.

In overlooking consumer cases,  particularly under Chapter 13, the article misses a critical point: Bankruptcy appeal barriers are not only a threat to the integrity of Chapter 11 practice but also to the fairness of consumer bankruptcy outcomes. If courts can dismiss consumer appeals—particularly over denied confirmations, claim disputes, or plan modifications—as moot or disruptive without examining the merits, then Chapter 13 becomes not just procedurally burdensome, but structurally biased against debtors.  

Further,  while decisions in Chapter 13 or other consumer cases are often overlooked and ignored  by the small subsection of the bankruptcy bar involved in Chapter 11,  those very opinions often have serious ramifications in corporate bankruptcies,  including Bullard and  Till v. SCS Credit Corp.,  until those also creep into their cases.
 

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