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In re SK Foods

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA


February 26, 2010

IN RE: SK FOODS, L.P., A CALIFORNIA LIMITED PARTNERSHIP, AND RHM INDUSTRIAL /SPECIALTY FOODS, INC., A CALIFORNIA CORPORATION, D/B/A COLUSA COUNTY CANNING CO., DEBTORS.
SS FARMS, LLC., SSC FARMING, LLC, SSC FARMING 1, LLC, SSC FARMING 2 LLC AND SCOTT SALYER, APPELLANTS,
v.
BRADLEY D. SHARP, CHAPTER 11 TRUSTEE, APPELLEE.

The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

ORDER

Through the present Motions,*fn1 Bankruptcy Trustee Bradley D. Sharp ("Trustee") seeks to dismiss the appeal brought by SS Farms, LLC, SSC Farming LLC, SSC Farming 1, LLC, SSC Farming 2, LLC, and Scott Salyer (collectively referred to as "Appellants") of the Bankruptcy Court's order denying Appellants' motion to remove the Trustee.*fn2

The Trustee's Motions are premised on the contention that the Bankruptcy Court's order declining, to remove the trustee is not a final appealable order under 28 U.S.C. § 158(a)(1). The Trustee goes on to argue that the order cannot satisfy the standard for interlocutory review even if not deemed final. Because the Court concludes that the order does indeed qualify as a final order for purposes of appeal, the Trustee's Motions fail on that ground alone, and the Court need not consider whether the underlying order could have supported appeal on an interlocutory basis.

The Ninth Circuit, in In re AFI Holding, Inc., 530 F.3d 832, 837 (9th Cir. 2008) found explicitly that an order removing a bankruptcy trustee is a final order over which jurisdiction attaches pursuant to 28 U.S.C. § 158.

In support of that conclusion, the AFI Holding court cited to law from its sister circuits, including a Seventh Circuit case which, like the motion now before this Court, dealt with the question of whether a denial of a motion to remove a bankruptcy trustee is a final order. Id., citing Matter of Schultz Mfg. Co., 956 F.2d 868, 691-92 (7th Cir. 1992). As the Ninth Circuit favorably noted, the Schultz court specifically answered that question in the affirmative. Consequently, while AFI Holding may be distinguishable on its facts from the instant matter inasmuch as that case dealt with an order removing a bankruptcy trustee as opposed to the denial of a removal request involved here, the Ninth Circuit nonetheless also pointed to case law resolving the very issue with which we are now confronted, and did so approvingly. Treating the removal a trustee the same as the denial of such removal makes sense since the motions are, in essence, mirror images of each other.

Moreover, even aside from the implications of AFI Holding, the weight of additional case law appears to favor treatment of the denial of a request for removal of a trustee as a final order for purposes of appeal. See, e.g., In re Granderson, 252 B.R. 1, 4 (1st Cir. B.A.P. 2000) (order denying request to remove trustee is a final order).

Consequently, the Court finds that the underlying order of the Bankruptcy Court denying Appellant's motion to remove the bankruptcy trustee is indeed final for purposes of invoking this Court's jurisdiction. The Trustee's present Motions to Dismiss (Docket No. 7 in 2:09-cv-02941-MCE and Docket No. 6 in 2:09-cv-02939-MCE) are consequently DENIED.

IT IS SO ORDERED.


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