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U.S. Bankruptcy Judge David A. Scholl announced in open court last week that he is “challenging” the decision of a 12-judge appeals panel to deny his reappointment to a second 14-year term. Scholl’s lawyer, Cletus P. Lyman of Philadelphia, confirmed that Scholl has demanded a hearing before the 3rd Circuit. But Lyman said the request was denied last week in a letter from the general counsel of the Administrative Office of the U.S. Courts. When asked if Scholl is planning to file suit in court to challenge his non-reappointment, Lyman said, “No decision has yet been made.” One lawyer who was present in court and heard Scholl’s remarks from the bench said the judge made the disclosure as a “side comment” while scheduling a hearing. Since Scholl is currently scheduled to end his tenure on the bench in August, the lawyer said that much of the activity in Scholl’s courtroom these days is aimed at wrapping up cases. At times, the lawyer said, Scholl is forced to schedule a hearing for a date beyond his scheduled departure date. For those, the lawyer said, Scholl informs the lawyers that they will be appearing before Senior U.S. Bankruptcy Judge William H. Gindin, a retired bankruptcy judge from the District of New Jersey who was specially recalled to take over Scholl’s cases. It was in the context of mentioning the transfer to Gindin that Scholl made the remark about his “challenge,” the lawyer said. Immediately after saying that an October hearing would be handled by Gindin, the lawyer said that Scholl said, “I am challenging my reappointment [sic], so I may still be here.” The courtroom was packed at the time, the lawyer said, and “business simply went on as usual.” In an interview, Lyman confirmed that he has been retained by Scholl, and that he sent a letter to the 3rd Circuit on June 28, requesting a hearing “where he could be informed of the reasons for his non-retention and he could challenge their sufficiency.” Lyman said he received a response on July 19 from William R. Burchill Jr., the general counsel for the Administrative Office of the U.S. Courts, which said the 3rd Circuit has denied the request for a hearing. Scholl’s remarks from the bench, Lyman said, were made before the judge had been informed of Burchill’s letter. Lyman said he and Scholl are now “reviewing” the letter and that no decision has been made about whether to take any additional steps in challenging the appellate court’s decision. Chief U.S. Circuit Judge Edward R. Becker said in a brief interview that Scholl has “given indication” that he has retained counsel and is challenging the court’s decision not to reappoint him and confirmed that the matter was referred by the court to Burchill. But Becker said he would not comment any further on the matter. If Scholl proceeds with a lawsuit, he is sure to have high hurdles to clear before winning any relief. Sources said the statute that governs reappointments of bankruptcy judges grants broad discretion to the appellate courts and doesn’t mandate any specific procedure, such as a hearing. The 3rd Circuit’s decision is likely to survive any court challenge, the source said, since it solicited input from hundreds of lawyers and litigants who appeared before Scholl by sending a questionnaire asking for comments about the judge’s performance. The source also said that the most Scholl could possibly win is an opportunity to plead his case and persuade the court to change its mind. Since the court voted 11 to 1 against reappointment, the chances are slim at best that Scholl will succeed in changing the decision, the source said.

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