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District Court Dismisses Interlocutory Appeal for Lack of Jurisdiction

On May 21, 2012, Judge Leonard P. Stark of the United States District Court of Delaware dismissed an appeal from a portion of an order that had granted in part and denied in part a creditor’s amended motion for leave to file a late proof of claim, because the order was not final and interlocutory review was not warranted.

Appellant, Imperial Tobacco Canada Limited (“ITCAN”), sought reversal of a portion of an order issued by Judge Judith K. Fitzgerald in the In re Flintkote Company bankruptcy case that denied ITCAN’s motion for leave to file an out-of-time proof of claim with respect to its alleged alter ego contribution and indemnity claim. According to ITCAN, it had failed to file a formal proof of claim during the course of the Flintkote bankruptcy because it only held a demand for future payment or contribution if the Court determined it wasFlintkote’s alter ego. Relying on the change in applicable law effected by the Third Circuit’s decision in Jeld-Wen, Inc. v. Van Brunt (In re Grossman’s Inc.), 607 F.3d 114 (3d. Cir. 2010), ITCAN argued that the expansion of the definition of “claim” set forth in Grossman’s gave rise to its right to file an out-of-time proof of claim. The Bankruptcy Court disagreed.

On appeal, ITCAN argued that the Bankruptcy Court misunderstood Grossman’s and abused its discretion by not granting leave to file a late claim for its potential future demand for contribution and indemnification. The appellees, the Debtors, Official Committee of Asbestos Personal Injury Claimants, and the Future Claimants Representative (collectively, the “Plan Proponents”), responded that the Bankruptcy Court had not committed error or abused its discretion and that the appeal must be dismissed for lack of jurisdiction, because the order appealed from was interlocutory having resolved only one aspect of ITCAN’s broader claims and disputes with the estate.

The Court agreed with the Plan Proponents and held that the order in question was not final because it only partially denied ITCAN’s motion for leave to file a late proof of claim and ITCAN’s related disputes with the estate were not adjudicated. The Court also determined that the order was not worthy of interlocutory review pursuant to 28 U.S.C. § 158(a)(3). Analyzing the criteria set forth in 28 U.S.C. § 1292(b) and as adopted by many other courts in the Third Circuit, the Court held the order did not (1) involve a controlling question of law upon which there was (2) substantial grounds for a difference of a opinion as to its correctness and, (3) if appealed immediately, may materially advance the ultimate determination of the litigation.

A copy of the Court’s opinion can be found here.

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