A critical bankruptcy litigation issue has finally been resolved by the U.S. Supreme Court. Until recently, litigants had been faced with the dilemma of whether to immediately appeal a denial with prejudice of a request for stay relief or wait until the underlying matter had been fully adjudicated. Given the uncertainty, parties remained unsure if they risked losing the ability to challenge the denial of stay relief by a bankruptcy court if they waited to appeal. Now it is clear that they will. In Ritzen Group v. Jackson Masonry, 589 U.S. ____ (2020), the Supreme Court affirmed a U.S. Court of Appeals for the Sixth Circuit decision and ruled that “a creditor’s motion for relief from the automatic stay initiates a distinct proceeding terminating in a final, appealable order when the bankruptcy court rules dispositively on the motion.”

Before Jackson Masonry’s bankruptcy, Ritzen Group and Jackson were parties to an agreement for Ritzen to purchase land from Jackson. Closing never occurred due to mutual allegations of contract breach. Ritzen then brought suit against Jackson in state court, however, immediately prior to trial, Jackson entered Chapter 11, which triggered the automatic stay. Ritzen sought stay relief from the bankruptcy court so that Ritzen could proceed with its state court action. Although the stay relief motion was denied, Ritzen did not immediately file an appeal.