First Circuit: Approval of Disclosure Statement Is Not Immediately Appealable

First Circuit: Approval of Disclosure Statement Is Not Immediately Appealable

The First Circuit dismissed an appeal of the Title III court’s approval of the disclosure statement for PREPA's Plan of Adjustment. The Court of Appeals concluded that the approval of the disclosure statement was an interlocutory order that could not be appealed.

On the merits, the real issue in this case seems to have been not whether the disclosure statement contained adequate information, but rather whether the Plan of Adjustment is patently non-confirmable. If it was (as the appellants argued), the Title III court should not have approved the disclosure statement since, as other courts have said, it would have amounted to an exercise in futility.

The Title III court deferred most of the substantive objections to the Plan to the confirmation hearing and held that it could not, on the existing record, rule the plan unconfirmable as a matter of law.

The First Circuit found that such ruling, was “not discrete from the issues of plan confirmation that remain pending, the resolution of which either way will likely moot any professed need to challenge the ruling on the adequacy of the disclosure. Further, in this case any fees and time claimed to be saved by an interlocutory appeal are not great in comparison to what is at stake under the plan.” #bankruptcy #appeals #PROMESA