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In re E.C. Morris Corp.

United States Bankruptcy Appellate Panel of the Sixth Circuit

December 10, 2014

In re: E.C. MORRIS CORP., Debtor.

Appeal from the United States Bankruptcy Court for the Northern District of Ohio at Akron No. 12-50982.

COUNSEL

ON BRIEF:

Ronald N. Towne, LEIBY, HANNA, RASNICK, TOWNE, EVANCHAN, PALMISANO & HOBSON, LLC, Akron, Ohio, for Appellants.

Rodd A. Sanders, RODERICK LINTON BELFANCE, LLP, Akron, Ohio, Matthew R. Duncan, BUCKINGHAM DOOLITTLE & BURROUGHS, LLC, Akron, Ohio, for Appellees.

Before: HARRISON, HUMPHREY, and LLOYD, Bankruptcy Appellate Panel Judges.

OPINION

MARIAN F. HARRISON, Bankruptcy Appellate Panel Judge.

ECM Chemicals, LLC, and Edward C. Morris ("Appellants") appeal the order of the United States Bankruptcy Court for the Northern District of Ohio ("Bankruptcy Court") denying their Motion to Enforce Order Approving Compromise of Claims. Specifically, the Appellants seek to stop Ergon Refining, Inc., and Rentwear, Inc. ("Appellees")[1] from pursuing successor liability claims against them based on the Chapter 7 Trustee's compromise of the estate's claims against the Appellants. For the reasons that follow, the Panel AFFIRMS the Bankruptcy Court's denial of the Appellants' motion.

I. ISSUE ON APPEAL

The issue in this case is whether the Bankruptcy Court correctly denied the Appellants' motion for lack of jurisdiction.

II. JURISDICTION AND STANDARD OF REVIEW

The United States District Court for the Northern District of Ohio has authorized appeals to the Panel, and no party has timely elected to have this appeal heard by the district court. 28 U.S.C. § 158(b)(6), (c)(1).

A final order of the bankruptcy court may be appealed as of right pursuant to 28 U.S.C. § 158(a)(1). For purposes of appeal, a final order "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Midland Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S.Ct. 1494, 1497 (1989) (citation omitted). "'[T]he concept of finality applied to appeals in bankruptcy is broader and more flexible than the concept applied in ordinary civil litigation.'" Millers Cove Energy Co., Inc. v. Moore (In re Millers Cove Energy Co., Inc.), 128 F.3d 449, 451 (6th Cir. 1997) (citations omitted). "This finality requirement is considered 'in a more pragmatic and less technical way in bankruptcy cases than in other situations . . . . In bankruptcy cases, a 'functional' and 'practical' application [of Section 158] is to be the rule.'" Lindsey v. O'Brien, Tanski, Tanzer & Young Health Care Providers of Connecticut (In re Dow Corning Corp.), 86 F.3d 482, 488 (6th Cir. 1996) (citations omitted).

The Appellees make the argument that the Bankruptcy Appellate Panel lacks jurisdiction because the order dismissing the adversary proceeding was "without prejudice." However, the Appellants are not appealing the order dismissing the adversary. Instead, the Appellants are appealing the Bankruptcy Court's denial of their "Motion to Enforce Order Approving Compromise of Claims" based on a lack of subject matter jurisdiction, and the denial of a motion for lack of jurisdiction constitutes a final order and may be appealed as of right. See Thickstun Bros. Equip. Co., Inc. v. ...


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