In the on-going saga of the Conex v. Car-Ber Testing, Inc. adversary proceeding , Judge Leonard P. Stark, of the United States District Court for the District of Delaware, denied the Chapter 7 Trustee’s request to allow a direct appeal to the Third Circuit Court of Appeals of the Bankruptcy Court’s opinion that permitted the defendant in a preference action to use the new value defense – even though the “new value” had been paid post-petition.  Stanziale v. Car-Ber Testing, Inc., Civ. No. 14-cv-179-LPS (D. Del. Mar. 23, 2015)

The basis of the underlying opinion was the Third Circuit’s opinion in the case of Friedman’s Litigation Trust v. Roth Staffing Companies LP, Case. No. 13-1712 (see our Friedman’s blog post here).

In ruling that a direct appeal to the Third Circuit was unwarranted, the District Court’s opinion concluded that there is no conflicting law on the issue.  Rather, the Friedman’s decision “squarely applie[d] to this case.”  Op. at 6.  “Appellant is not arguing the absence of controlling law; rather he is arguing the absence of a decision that adopts his position.”  Op. at 5-6.

The Court also found lacking the Trustee’s argument that public interest was invoked because the underlying opinion could affect 16 other pending adversaries.  “The fact that an appeal will affect other parties to Debtors’ bankruptcy does not establish an issue of public importance.”  Op. at 6.

Finally, the Court was not persuaded that allowing a direct appeal would materially advance the case.  [T]here is nothing extraordinary or urgent about this situation that recommends departing from the standard appellate process. The matter is primed for briefing before this Court; whereas, the Third Circuit must first review and accept a certification request before the appeal can proceed in that Court.”  Op. at 7.  “The Court does not find that certification will materially advance this case.”  Op. at 7.