St. Charles Preservation Investors, Ltd., In re
Decision Date | 19 October 1990 |
Docket Number | No. 90-7058,90-7058 |
Citation | 286 U.S. App. D.C. 312,916 F.2d 727 |
Parties | In re ST. CHARLES PRESERVATION INVESTORS, LTD. Appeal of A.D. ADAIR, Jr., et al., Appellants. |
Court | U.S. Court of Appeals — District of Columbia Circuit |
Before WALD, Chief Judge, RUTH BODER GINSBURG and WILLIAMS, Circuit Judges.
Opinion for the Court filed PER CURIAM.
This appeal requires the court to consider whether a district court order remanding a case to bankruptcy court for significant further proceedings constitutes a final order appealable under 28 U.S.C. Sec. 158(d). In accord with the view adopted by a majority of circuit courts, we now hold that such an order is not final for purposes of court of appeals review. We therefore dismiss this appeal for lack of jurisdiction.
In 1983, St. Charles Preservation Investors, Ltd. ("St. Charles"), a Georgia limited partnership formed to acquire the St. Charles Hotel in Washington, D.C., issued limited partnership interests denoted as "Class A" and "Class B." Class A limited partners were required to make a one-time cash payment of $19,000 per unit and were entitled to receive two "guaranteed" payments equaling the payback of their purchase price plus monthly interest payments on their investment at a rate of 18% per year. Class B limited partners made contributions of $62,000 per unit, with $12,000 payable upon subscription and the balance payable over four years ending March 1, 1987.
In January 1985, the St. Charles Hotel suffered substantial operating losses and was sold in foreclosure. Beginning in March 1985, Class B limited partners defaulted on their payment obligations. On December 22, 1987, St. Charles filed a Chapter 7 petition in bankruptcy court. See 11 U.S.C. Sec. 701 et seq. (1990). Because the hotel property was owned through another limited partnership which also declared bankruptcy, the estate has no assets other than the money owed by Class B partners.
At a meeting of creditors, Class A limited partners, acting through counsel, elected Joseph R. Whaley as permanent trustee. An objection was made and a motion to confirm Whaley's election filed. The bankruptcy court denied the motion, holding that the right of Class A limited partners to acquire interest on their invested capital was not a debt conferring creditor status within the meaning of 11 U.S.C. Sec. 101(9) (1989), and therefore these partners were not entitled to participate in the election of a trustee. See 11 U.S.C. Sec. 702. Class A limited partners appealed to the district court pursuant to 28 U.S.C. Sec. 158(a) (1984).
The district court reversed the bankruptcy court's ruling, concluding that the entitlement of Class A limited partners to guaranteed payments confers "creditor" status under the statute, permitting those partners to participate in the election of a trustee. The district court remanded the case to bankruptcy court for further proceedings 112 B.R. 469. Class B limited partners thereupon sought to appeal that decision to this court.
The courts of appeals have jurisdiction over all final decisions entered by district courts in appeals from bankruptcy courts. See 28 U.S.C. Sec. 158(d) (1984). A majority of circuit courts have held that a district court order is not final if "[it] remands the case to the bankruptcy judge for significant further proceedings." Matter of Riggsby, 745 F.2d 1153, 1155 (7th Cir.1984). See In re Dixie Broadcasting Inc., 871 F.2d 1023, 1028 (11th Cir.), cert. denied, --- U.S. ----, 110 S.Ct. 154, 107 L.Ed.2d 112 (1989); Bowers v. Connecticut National Bank, 847 F.2d 1019, 1023 (2d Cir.1988); Matter of Greene County Hospital, 835 F.2d 589, 596 (5th Cir.), cert. denied, 488 U.S. 820, 109 S.Ct. 64, 102 L.Ed.2d 41 (1988); In re Commercial Contractors, Inc., 771 F.2d 1373, 1375 (10th Cir.1985). Under this view, a district court order of remand to a bankruptcy court may be considered final, for purposes of court of appeals jurisdiction, only where the remand leaves solely "ministerial" proceedings to be conducted by the bankruptcy court. See In re Gould & Eberhardt Gear Machinery Corp., 852 F.2d 26 (1st Cir.1988) ( ); In re Lift & Equipment Service, Inc., 816 F.2d 1013, modified on reh'g, 819 F.2d 546 (5th Cir.1987) ( ).
This view commends itself to us for the reasons discussed by the Seventh Circuit in Matter of Riggsby, 745 F.2d at 1155-56. For purposes of determining court of appeals jurisdiction, we see no logical distinction between a district court order remanding a case to a bankruptcy court and one remanding a case to an administrative agency. See id. at 1156. It is well settled that, as a general rule, a district court order remanding a case to an agency for significant further proceedings is not final. See, e.g., WMATA v. Director, Office of Workers' Compensation Programs, 824 F.2d 94, 95 (D.C.Cir.1987). See also American Hawaiian Cruises v. Skinner, 893 F.2d 1400 (D.C.Cir.1990). But see Occidental Petroleum Corp. v. SEC, 873 F.2d 325 (D.C.Cir.1989) ( ). The same practical considerations militating against piecemeal court of appeals review in agency matters apply with equal force in the bankruptcy context.
This approach best serves the interests of judicial economy and efficiency. By deferring consideration of an appeal until bankruptcy proceedings on remand are completed, a court of appeals avoids the prospect of entertaining two appeals, one from the order of remand and one from entry of a district court order reviewing the remanded proceedings. Such a deferral also leaves open the possibility that no appeal will be taken, in the event that proceedings on remand are satisfactory to all parties. Moreover, because bankruptcy proceedings are often summary, a remand may require little time to complete and thus it may be more efficient for a court of appeals to adjudicate the case after a bankruptcy court has terminated its proceedings. See Matter of Riggsby, 745 F.2d at 1155-56. For these reasons, we conclude, in accord with a majority of our sister circuits, that a district court order remanding a case to bankruptcy court for significant further proceedings is not final in the 28 U.S.C. Sec. 158(d) context. 1
Applying this approach to the instant case, we hold that the district court's order remanding this case to bankruptcy court is not final. The district court's order requires the bankruptcy judge not only to confirm the election of a trustee,...
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