Suppose you have an appeal in the circuit court from an order originally entered in bankruptcy court. If the parties agree to settle, what’s the proper procedure?
Although it may seem unduly cumbersome, Seventh Circuit Judge Kenneth Francis Ripple described the required procedure in an opinion on Feb. 8. In substance, three courts must be on board with the settlement.
In mediation following an appeal to the circuit, the parties agreed to settle. The settlement was contingent on approval by the bankruptcy court. The bankruptcy court, of course, could not simply approve the settlement, because it lacked jurisdiction while the case was on appeal.
On the parties’ motion, the bankruptcy court said it would approve the settlement if the appeal were remanded. Back in the circuit, Judge Ripple said the appeals court could not remand because the parties had not fully complied with Rule 12.1 of the Federal Rules of Appellate Procedure.
Rule 12.1(b) provides, “If the district court states that it would grant the motion [for relief that it lacks jurisdiction to grant] . . . , the court of appeals may remand for further proceedings . . . .”
When the appeal is from a bankruptcy court’s order, Judge Ripple said that “remand for approval of settlement requires coordination between three courts.” Because the rule authorizes remand after the district court has said it is inclined to grant the relief, he said the proper procedure for winning a remand to the district court “is to obtain an indicative ruling from both courts.”
Suppose you have an appeal in the circuit court from an order originally entered in bankruptcy court. If the parties agree to settle, what’s the proper procedure?