In re Sisk, Candalla and Mercado
- Summarized by Laura Coordes , Sandra Day O'Connor College of Law Arizona State University
- 2 years 9 months ago
- Case Type:
- Case Status:
- Affirmed in part and Reversed in part
- 18-17445; 18-17446; 18-17447; 18-17448 (9th Circuit, Jun 22,2020) Published
- When there is no objection, a chapter 13 plan need not include a fixed duration, because chapter 13 does not expressly prohibit plans with estimated lengths.
- Procedural context:
- Appeal from the Bankruptcy Appellate Panel for the Ninth Circuit; reviewed de novo.
- Debtors filed petitions for chapter 13 bankruptcy and proposed plans with estimated time periods rather than fixed durations. Debtors also sought to provide unsecured creditors with a dividend of $0. Neither the trustee nor any unsecured creditors objected. Rather than confirm the debtors' plans, the bankruptcy court transferred them to the Trustee's Pending List. After debtors filed motions requesting confirmation, the court scheduled additional hearings to determine whether debtors' plans could be confirmed. Several of the debtors also objected to the length of the bankruptcy court's confirmation process. Ultimately, the bankruptcy court refused to confirm debtors' plans, on the grounds that they were impermissibly "self-modifying" in violation of §§1328(a) and 1329(b). The bankruptcy court also ruled that the debtors' plans were not proposed in good faith. On appeal, the BAP affirmed. After the Ninth Circuit denied the debtors' certifications for direct appeal as interlocutory, debtors removed the estimated duration provisions from their plans, re-filed them, and had them confirmed with a fixed duration. Debtors filed certifications for direct appeal to the Ninth Circuit.
The Ninth Circuit panel held that it had jurisdiction to consider the debtors' appeal because they had "injury in fact" sufficient to confer standing. In addition to reversing the bankruptcy court with respect to the requirement of a fixed duration in a bankruptcy plan, the panel also vacated the BAP's ruling that the debtors had proposed their initial plans in bad faith. The panel affirmed the BAP with respect to the bankruptcy court's confirmation procedures, holding that the bankruptcy court had held a confirmation hearing within the Code's timeframe and had properly exercised its discretion when it deferred consideration of debtors' plan provisions until it could adequately address them.
- Wardlaw, Smith, Bumatay
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