This paper discusses the finality of judgments in bankruptcy litigation. In general, a final decision is one that terminates the litigation on the merits, and leaves nothing for the court to do but execute the judgment. However, in contrast to other actions in federal litigation, a bankruptcy proceeding is often “a conglomeration of separate adversary proceedings that, but for the status of the bankrupt party which enables them to be consolidated in one proceeding, would be separate, stand-alone lawsuits.” In re James Wilson Assoc., 965 F.2d 160, 166 (7th Cir.1992). The parties to these separate proceedings “should not have to wait for the end of the entire bankruptcy proceeding before they can appeal.” Id. As a result, finality in bankruptcy has been interpreted to embrace the final decision in any adversary proceeding that, but for its bankruptcy setting, would be a separate suit. Id.
There is not a statute that defines the term “final judgment,” therefore it has been left to common law to determine the definition. There are problems in applying the final judgment rule used in federal civil litigation to bankruptcy litigation, because there are multiple parties in interest, adversary proceedings, and contested matters, all which make the “question of finality in bankruptcy appeals…a thorny one.” The Seventh Circuit, along with many courts, takes a “relaxed view of ‘finality’ for bankruptcy orders as compared with district court orders.” Rady v. Roberts, 2003 U.S. Dist. LEXIS 8485, *2 (S.D. Ind.2003).
There are generally “two routes which a party can take in appealing a bankruptcy court’s ruling to a district court.” Central Illinois Savings & Loan Assoc. v. Rittenberg Co., Ltd., 85 B.R. 473, 476 (N.D. Ill. 1988). First, final judgments, orders and decrees may be appealed as of right, whereas interlocutory orders and decrees may only be appealed with leave of the district court.” Id. When adversary proceedings are being appealed, Bankruptcy Rule 7054 states that Rule 54(a)-(c) of the Federal Rules of Civil Procedure apply. The paper further discusses the nuances in appealing adversary proceedings, as well as the importance of the entry of an order for judgment.
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