Cox v. Nostaw, Inc., No. 16-1389 (7th Cir. 2017)

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Cox, the trustee in the Central Illinois Energy Cooperative bankruptcy, appealed a bankruptcy court ruling after it was affirmed by the district court. In the meantime, the parties mediated a settlement and the bankruptcy court stated that it would approve that settlement, subject to the disposition of any objection filed by a creditor or Cox. Cox then moved for dismissal of the appeal. The Seventh Circuit denied the motion. When, as in this case, an appeal is from the district court’s affirmance of a bankruptcy court order, a remand to the bankruptcy court for approval of settlement requires coordination between three courts. Rules 12.1 and 57 both authorize relief only after the district court has said that it is inclined to grant a motion barred by the pending appeal. Although the parties obtained an indicative ruling from the bankruptcy court, there is no record that they sought or obtained an indicative ruling from the district court. The proper procedure is to obtain an indicative ruling from both courts that will need to act.

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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 16 1389 IN RE: CENTRAL ILLINOIS ENERGY COOPERATIVE, Debtor, A. CLAY COX, Trustee Appellant, v. NOSTAW, INC., Appellee. ____________________ Appeal from the United States District Court for the Central District of Illinois, Peoria Division. No. 15 1118 — James E. Shadid, Chief Judge. ____________________ ON MOTION TO DISMISS AND REMAND ____________________ DECIDED FEBRUARY 8, 2017 ____________________ RIPPLE, Circuit Judge (in chambers). Appellant A. Clay Cox, the bankruptcy trustee for Central Illinois Energy Coopera tive, asks this court to dismiss his appeal and remand in light 2 No. 16 1389 of the bankruptcy court’s statement that it would approve a settlement between the parties. After mediation the parties agreed to settle this case, but the settlement is contingent on approval by the bankruptcy court. The parties filed a joint motion in the bankruptcy court asking for an indicative ruling whether it would approve their proposed settlement. On November 7, 2016, the bankruptcy court issued an order saying that it would approve the settle ment agreement, subject to the disposition of any objection filed by a creditor or the trustee, if the case was remanded for that purpose. In light of this order, Mr. Cox moves this court pursuant to Federal Rule of Appellate Procedure 12.1 to dis miss his appeal and remand to the district court with instruc tions to remand to the bankruptcy court for proceedings con sistent with its indicative ruling. Rule 12.1 provides that if a district court says it would grant a motion that is barred by a pending appeal, “the court of appeals may remand for further proceedings but retains ju risdiction unless it expressly dismisses the appeal.” This court’s Circuit Rule 57 provides similar relief, but says that this court “will remand” if the district court is inclined to modify its judgment. See Boyko v. Anderson, 185 F.3d 672 (7th Cir. 1999). These rules allow for coordination of proceedings between a district court and a court of appeals. See FED. R. APP. P. 12.1 advisory committee’s note (2009). When, as in this case, an appeal is from the district court’s affirmance of a bankruptcy court order, a remand to the bank ruptcy court for approval of settlement requires coordination between three courts. Further, Rule 12.1 and Rule 57 both au thorize relief only after the district court has said that it is in No. 16 1389 3 clined to grant a motion barred by the pending appeal. Alt hough the parties obtained an indicative ruling from the bankruptcy court, there is no record that they sought or ob tained an indicative ruling from the district court. To ensure that each of the coordinating courts agree, the proper procedure when asking this court to remand to the district court and then to the bankruptcy court is to obtain an indicative ruling from both courts that will need to act. Be cause Mr. Cox has not done this, his motion is DENIED with out prejudice to renewal after obtaining an indicative ruling from the district court.

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