In Re: Comair Limited

Background

Comair Limited was involved in a business-rescue proceeding under South African law. Comair and The Boeing Company had entered agreements under which Boeing would manufacture and Comair would purchase Boeing aircraft. In 2013, they entered a purchase agreement for eight 737 MAX 8 aircraft. Boeing delivered and was paid for the first aircraft in February 2019. After two fatal 737 MAX 8 crashes and the worldwide grounding of those aircraft, Comair’s re-fleeting plan was stalled and abandoned. Comair purported to cancel and terminate the purchase agreement in February 2020.

Richard A. Ferguson, acting as Comair’s foreign representative in a proceeding under Chapter 15 of the United States Bankruptcy Code, later sought discovery from Boeing under Bankruptcy Code § 1521(a)(4) and Bankruptcy Rules 2004 and 9016. Ferguson said Comair might have significant claims against Boeing and that discovery was needed to investigate possible causes of action and potential monetary recovery. Boeing objected.

The Bankruptcy Court granted the discovery request in part. It found that Ferguson had established grounds to conduct discovery concerning possible claims Comair might have against Boeing and the extent of any potential recovery. But the Bankruptcy Court did not decide the scope of the proposed discovery or Boeing’s objections. It directed the parties to meet and confer and to return for a discovery conference if they could not resolve their disputes.

Issues and analysis

Boeing appealed the November 14, 2021 Bankruptcy Court order. Boeing argued that the order was final and appealable because it authorized at least some discovery. Comair argued that the order was interlocutory, meaning it was not a final decision, and that Boeing had not properly sought permission for an interlocutory appeal.

Judge Torres explained that district courts generally have appellate jurisdiction over final Bankruptcy Court orders. In bankruptcy cases, an order can be final when it definitively resolves a distinct dispute within the larger bankruptcy case. The Court compared this appeal with a Second Circuit decision involving discovery in a Chapter 15 proceeding, where the discovery order had finally resolved the discovery petition and required no further Bankruptcy Court action.

The Court found that this case was different. The November 14 order left the scope of discovery open, reserved judgment on Boeing’s objections, and directed further discussions between the parties. The record also showed continuing discovery disputes, a pending motion to compel, and a pending request to substitute provisional liquidators for Ferguson in the Chapter 15 case. These circumstances indicated that the Bankruptcy Court’s work was not complete and that the order did not definitively resolve a distinct dispute. The Court therefore held that the order was not final and that Boeing could not appeal it as of right.

Disposition

Boeing had not filed a separate motion for permission to pursue an interlocutory appeal. The Court treated Boeing’s notice of appeal as such a motion, as permitted by the applicable bankruptcy rule. Judge Torres declined to grant permission because Boeing had not shown that an immediate appeal would materially advance the end of the litigation, that there was a substantial disagreement about the legal issue resolved by the Bankruptcy Court, or that exceptional circumstances warranted an immediate appeal.

The Court denied Boeing’s motion for leave to appeal, denied Boeing’s request for oral argument, and dismissed this action for lack of jurisdiction. The Clerk was directed to close the case. The opinion addressed the appeal’s jurisdiction and timing; it did not decide the parties’ underlying dispute about the purchase agreement or any possible claims Comair might have against Boeing.