Ries v. VEC Technology, L.L.C. et al

Filing 3

ORDER granting in part and denying in part 1 Motion Leave to Appeal. (Written Opinion) Signed by Judge Susan Richard Nelson on 10/01/2012. (jmf)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

In re: Genmar Holdings, Inc.,
Debtor.

Bankr. Nos. 09-43537, 09-33775
Civil No. 12-2038 (MJD)
Civil No. 12-2039 (MJD)
Civil No. 12-2040 (SRN)
Civil No. 12-2041 (PAM)
Civil No. 12-2042 (MJD)
ORDER

This matter is before the Court on Motions for leave to appeal these related cases
arising out of the bankruptcy of Debtor Genmar Holdings, Inc. and related entities. The
basis for the request to take an interlocutory appeal is an Order of Judge Dennis D.
O’Brien of the United States Bankruptcy Court that granted the Bankruptcy Trustee’s
motion to strike the creditors’ demands for a jury trial as to the Trustee’s state-law
fraudulent transfer claims against the creditors. The creditors also ask for permission to
appeal the Bankruptcy Court’s denial of their motion to strike the Trustee’s disallowance
claim as premature.
The decision to allow an interlocutory appeal from an order of the Bankruptcy
Court is a discretionary one. In re M&S Grading, Inc., 526 F.3d 363, 368 (8th Cir. 2008);
see also 28 U.S.C. § 158(a)(3) (providing for interlocutory appeals to the district court
from orders of bankruptcy court). Section 1292(b) outlines the relevant considerations
for determining whether an interlocutory appeal is appropriate: when the “order involves
a controlling question of law as to which there is substantial ground for difference of

opinion” and “an immediate appeal from the order may materially advance the ultimate
termination of the litigation.” 28 U.S.C. § 1292(b).
There is little question that the creditors’ right to a jury trial is a controlling
question of law. Nor can there be any doubt that there are “substantial ground[s] for
difference of opinion” as to whether the creditors have a right to a jury trial on these
claims. Indeed, the cases the parties cite for their respective arguments provide a clear
indication that this question is both important and highly unsettled. Compare Pearson
Educ., Inc. v. Almgren, 685 F.3d 691, 694 (8th Cir. 2012) (creditors’ adversary action to
determine dischargeability of copyright infringement damages is part of Bankruptcy
Court’s equity jurisdiction to which jury trial rights do not apply) with Picard v. Katz, 825
F. Supp. 2d 484, 487 (S.D.N.Y. 2011) (trustee’s fraudulent transfer claims not part of
“hierarchical reordering of creditors’ claims” and thus not part of Bankruptcy Court’s
equity jurisdiction). Finally, a determination on the issue will advance the ultimate
termination of the litigation because if the creditors are entitled to a jury trial on the
fraudulent transfer claims, it is inefficient to have the bankruptcy court decide those
claims first. It is a more efficient use of judicial resources to determine this important
issue and have the claims resolved accordingly.
These same considerations, however, do not weigh in favor of granting an
interlocutory appeal on the second issue the creditors raise, whether the Bankruptcy Court
erred in striking the creditors’ disallowance claims as premature. That decision does not

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involve a controlling question of law, and the creditors have not established that a
decision on this issue will materially advance the ultimate termination of the litigation.
Thus, the only issue on which an interlocutory appeal will be granted is the issue of the
creditors’ right to a jury trial on the Trustee’s fraudulent transfer claims.
Based on the foregoing, and all the files, records and proceedings herein, IT IS
HEREBY ORDERED that:
1.

The Motion for Leave to Appeal in 12-2038 [Doc. No. 1] is GRANTED in

part, and DENIED in part;
2.

The Motion for Leave to Appeal in 12-2039 [Doc. No. 1] is GRANTED in

part, and DENIED in part;
3.

The Motion for Leave to Appeal in 12-2040 [Doc. No. 4] is GRANTED in

part, and DENIED in part;
4.

The Motion for Leave to Appeal in 12-2041 [Doc. No. 1] is GRANTED in

part, and DENIED in part; and
5.

The Motion for Leave to Appeal in 12-2042 [Doc. No. 1] is GRANTED in

part, and DENIED in part.

Dated: October 1, 2012

s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge

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