It’s About Time: New Amendments to the Federal Rules of Bankruptcy Procedure Revise Time Periods

On December 1, 2009, certain amendments to the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) became effective that impact the computation of virtually all time periods, ranging from the time to appeal court orders to the notice periods for disclosure statement and plan confirmation hearings. These amendments are part of a broader effort by the Judicial Conference’s Committee on Rules of Practice and Procedure to standardize the computation of time periods across all federal courts, which resulted in similar revisions to the federal Civil Rules, Appellate Rules, and Criminal Rules.

The Time Computation Amendments
The centerpiece change to the Bankruptcy Rules is a virtually complete rewrite of Bankruptcy Rule 9006(a). The previous Bankruptcy Rule 9006(a) excluded weekends and holidays when counting days if the time period was less than eight days, but not if the period was eight days or more. This often caused confusion when calculating deadlines. Under the new Bankruptcy Rule 9006(a), weekends and holidays are always counted, regardless of the time period (unless the last day happens to be a weekend or holiday, in which case the deadline will fall on the next business day). For electronic filing, new Bankruptcy Rule 9006(a)(4)(A) also provides that the last day ends at midnight in the applicable court’s time zone.

In addition, time periods of less than 30 days in the Bankruptcy Rules for the most part have been revised to be multiples of seven, so deadlines usually will fall on a weekday. Generally, the time periods in the Bankruptcy Rules will be revised as follows:

  • Five-day periods become seven-day periods.
  • 10-day periods become 14-day periods.
  • 15-day periods become 14-day periods.
  • 20-day periods become 21-day periods.
  • 25-day periods become 28-day periods.
There are a few exceptions to this general rule. For example, the two-day periods in Bankruptcy Rules 1007(d) and 4001(a)(2) and the five-day periods in Bankruptcy Rules 4001(d)(3) and 7054(b) have remained the same.

The “mailbox rule” set forth in Bankruptcy Rule 9006(f) still applies to the calculation of time periods. Thus, parties have an additional three days to act when the applicable time period is triggered by service and that service is made by mail or one of the other methods set forth in the rule.

Bankruptcy Appeals and Stays
Perhaps the amendments with the most notable impact will be the change to Bankruptcy Rule 8002, which extends the time to appeal a court order from 10 days to 14 days, and extensions of the corresponding stay periods in Bankruptcy Rules 6004(h) and 6006(d) from 10 days to 14 days. Parties to a significant transaction that requires bankruptcy-court approval, such as an asset sale or settlement, frequently are required to wait until any applicable stay period has expired (unless the court has ordered otherwise) and the court’s order has become final and nonappealable to close the transaction. Such a delay will be extended by four days under the amended rules.

Other Amendments
In addition, amendments to Bankruptcy Rules 7052 and 9021 and new Bankruptcy Rule 7058 make the separate judgment rule, which requires every final order to be set forth in a separate writing, applicable only to adversary proceedings. The separate judgment rule often proved impractical in contested matters, in which bankruptcy courts tend to enter a short order that incorporates certain factual findings.

Bankruptcy Rule 4008 also was amended to modify the procedures for reaffirmation agreements.

Application to Pending Proceedings
The new amendments to the Bankruptcy Rules became effective on December 1, 2009, and apply to cases filed prior to that date. According to the Rules Enabling Act, 28 U.S.C. § 2074, the new rules apply to all pending matters and proceedings unless such application would be infeasible or would cause an injustice.

Conforming Changes to Local Bankruptcy Rules
As a result of these amendments to the Bankruptcy Rules, most local bankruptcy-court rules have been or will be amended to reflect conforming changes. In many districts, such changes were implemented on or before December 1, 2009.