Bankruptcy Remoteness Going to a Court of Appeals (Progress Report No. 3)
Our February 22 post reported that the Franchise Services of North America, Inc. decision of Bankruptcy Judge Edward Ellington of the Southern District of Mississippi dismissing a Chapter 11 petition because a shareholder had not approved the filing as required by the debtor’s charter was going directly to the U.S. Court of Appeals for the Fifth Circuit on an expedited basis. It is the first case concerning the merits of contractual or structural bankruptcy-remoteness in my memory to reach a Court of Appeals since the adoption of the Bankruptcy Code in 1978. We promised to report on developments as they occur and reported on the filing of the debtor-appellant’s brief on March 19 and the appellees’ brief on April 16.
The debtor-appellant filed its reply brief on April 23. As might be expected of a reply brief, it does not break new ground but seeks to rehabilitate arguments made in the debtor-appellant’s initial brief that were seemingly undermined by arguments made in the appellees’ brief on both federal bankruptcy policy and Delaware law.
Oral argument is scheduled for May 2.