Section 546(A) is a Statute of Limitations and is Not Jurisdictional

The following is a summary of a Minnesota bankruptcy case or a case relevant to Minnesota bankruptcy law.

Minnesota Bankruptcy Case:

Myers v. Raynor (In re Raynor), 2010 WL 3292816 (8th Cir. (Neb.) 8/23/10) (Smith, J.).

Case Summary:

Section 546(A) is a Statute of Limitations and is Not Jurisdictional, So Rule 9006 Applies for Time Computation

The Eighth Circuit Court of Appeals affirms the BAP and the bankruptcy court rulings that the trustee’s avoidance action was timely when filed on the two year anniversary of the petition date. The petition was filed September 13, 2004; the avoidance action was commenced September 13, 2006. The bankruptcy court denied the defendant’s motion to dismiss, and the district court affirmed. The debtor also filed a motion to dismiss and the bankruptcy court denied it. The trustee, debtor, and defendant then filed a stipulated judgment reserving the right to appeal the timeliness issue to the BAP. On that appeal, the BAP declined to revisit the time-bar issue because the district court ruling was the law of the case; but it noted that the court did correctly conclude that the suit was not time barred. On appeal, the Eighth Circuit affirms. Noting that as an appellate court it is not bound by the law of the case, it rules on the merits. Section 546(a) refers to suits commenced after two years after the petition date. After September 13 is September 14, so any action filed before September 14 is timely. The court goes on to address an issue of first impression: whether § 546 is a statute of limitation, in which case the counting rules of Rule 9006 apply; or whether it is jurisdictional, in which case time-computation rules do not apply. The court holds that it is a statute of limitation and that under Rule 9006, the limitation period begins the day after the petition was filed and would end on September 13 – making the adversary proceeding timely. Notwithstanding how § 546 is characterized, Rule 9006 by its plain language applies to any statute that does not specify a method of counting time, including § 546.

Credit: The preceding was a summary of a case relevant to Minnesota bankruptcy law. The case summary was prepared by the U.S. Bankruptcy Court through Judge Robert J. Kressel & attorney Faye Knowles.

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