{"id":2166,"date":"2024-08-06T17:37:21","date_gmt":"2024-08-06T17:37:21","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/bankruptcy-fee-motion-untimeliness\/"},"modified":"2024-08-06T17:37:21","modified_gmt":"2024-08-06T17:37:21","slug":"bankruptcy-fee-motion-untimeliness","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/bankruptcy-fee-motion-untimeliness\/","title":{"rendered":"Bankruptcy \u2013 Fee motion \u2013 Untimeliness"},"content":{"rendered":"\n
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Where a debtor filed a motion for fees and costs following the dismissal of an involuntary Chapter 11 petition, the fee motion was untimely, so an order denying that motion should be affirmed.\n<\/p>\n

\u201cThese consolidated appeals stem from a Chapter 11 involuntary bankruptcy petition that appellee Banco Popular de Puerto Rico (\u2018Banco Popular\u2019) filed in 2006 seeking to compel appellant Edgar Reyes-Colon into bankruptcy. The procedural posture of each appeal is slightly different, although both are appeals from district court decisions connected to the underlying bankruptcy case. First, Reyes-Colon appeals from the district court\u2019s decision affirming the bankruptcy court\u2019s determination that it did not have subject-matter jurisdiction over Reyes-Colon\u2019s post-dismissal motion for fees and costs (Case No. 22-1706). Second, Reyes-Colon appeals from the district court\u2019s decision denying his motion for withdrawal of reference filed in a separate adversary proceeding (Case No. 22-1715). With respect to the first case, we conclude that the bankruptcy court had jurisdiction over the fee motion but that the fee motion was untimely, and accordingly, we affirm. As to the second case, we conclude that the district court erred in denying the motion for withdrawal of reference as untimely and therefore vacate and remand to the district court for further consideration of Reyes-Colon\u2019s motion for withdrawal of reference. \u2026\n<\/p>\n

\u201cReyes-Colon argues that the bankruptcy court had post-dismissal jurisdiction over the \u00a7303(i) motion while Banco Popular argues that the bankruptcy court could only have such jurisdiction if it provided a jurisdiction-retention statement in its dismissal order. Contrary to the parties\u2019 assertions, there is no directly on-point case law to guide us in resolving this particular issue. The question of whether a bankruptcy court has jurisdiction over post-dismissal \u00a7303(i) motions without first providing a specific statement retaining jurisdiction over such motions is a matter of first impression in this Circuit. \u2026 We hold that a bankruptcy court has post-dismissal jurisdiction over \u00a7303(i) motions in these circumstances. In other words, although the bankruptcy court in this case did not provide an explicit jurisdiction-retention statement in its order dismissing the involuntary petition, it still had jurisdiction over Reyes-Colon\u2019s attorney\u2019s fees motion made pursuant to \u00a7303(i)(1).<\/p>\n

\u201cBanco Popular insists that dismissal or closure of an underlying bankruptcy petition necessarily results in the termination of the bankruptcy court\u2019s jurisdiction over all future matters, including \u00a7303(i) motions. We adopt no blanket rule providing that all jurisdiction terminates at dismissal of the underlying bankruptcy petition. Rather, the question of post-dismissal (or post-closure) jurisdiction is a case- and fact-specific inquiry. Post-dismissal jurisdiction depends on the basis for jurisdiction over the proceeding and the specific circumstances and nature of the proceeding itself. \u2026\n<\/p>\n

\u201cFor these reasons, a bankruptcy court need not provide a jurisdiction-retention statement referring to \u00a7303(i) claims to later exercise subject-matter jurisdiction over the same post dismissal. Thus, the bankruptcy court erred in concluding that it did not have subject-matter jurisdiction over the post-dismissal \u00a7303(i) attorney\u2019s fees motion. \u2026\n<\/p>\n

\u201cAlthough the bankruptcy court did not address timeliness of the fee motion, because the district court included timeliness in its affirmance, we address timeliness to clarify the law and affirm on this basis. \u2026<\/p>\n

\u201c\u2026 Because his motion was filed 365 days after mandate issued, it was undeniably untimely. Accordingly, we affirm the dismissal of Reyes-Colon\u2019s attorney\u2019s fees motion. \u2026\n<\/p>\n

\u201cAs an initial matter, we have jurisdiction over Reyes-Colon\u2019s appeal from the district court\u2019s decision to deny the motion for withdrawal. \u2026\n<\/p>\n

\u201cHere, Reyes-Colon first initiated the claim on June 18, 2020, when he filed the bad-faith complaint in the involuntary-petition case. Eleven days later, he initiated the adversary proceeding, and one day after that he filed the motion for withdrawal. Thus, a mere twelve days after first raising his bad-faith claim, before any litigation over the complaint had begun, Reyes-Colon requested that the case be transferred to district court. On these facts, we are confident that the motion for withdrawal was timely.\n<\/p>\n

\u201cAccordingly, the district court\u2019s denial of the motion for withdrawal on the basis of timeliness is vacated and the case is remanded for the court to assess whether there is cause to withdraw the reference. \u2026 Finally, we note that the district court also erred in dismissing the adversary proceeding with prejudice after denying the motion for withdrawal. As explained above, the motion for withdrawal of reference relates only to which court will adjudicate an issue, not the underlying merits of the case. \u2026 If a district court denies a motion for withdrawal of reference, the case remains in bankruptcy court. Thus, if, on remand, the district court determines that there is no cause for withdrawal and again denies the motion for withdrawal, the district court\u2019s work ends and the adversary proceeding must return to the bankruptcy court. \u2026\n<\/p>\n

\u201cFor the foregoing reasons, we affirm<\/i> the bankruptcy court\u2019s denial of the motion for attorney\u2019s fees, vacate<\/i> the district court\u2019s denial of the motion for withdrawal of reference, and remand<\/i> to the district court for further consideration of the motion for withdrawal consistent with this opinion. The parties shall bear their own costs on appeal.\u201d\n<\/p>\n

Reyes-Col\u00f3n v. Banco Popular de Puerto Rico, et al. (Lawyers Weekly No. 01-158-24) (27 pages) (Montecalvo, J.) Appealed from the U.S. District Court for the District of Puerto Rico (Docket Nos. 22-1706 and 22-1715) (Aug. 1, 2024).<\/i>\n<\/p>\n

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