>Lex Machina’s First Annual Report on Bankruptcy Litigation in District Court Provides Insights and Data About the Complex World of Bankruptcy Appeals

  • Chapter 7 and Chapter 11 filings account for 83% of all bankruptcy appeals cases filed since 2009
  • Wells Fargo, Bank of America and the IRS are among both the top appellants and appellees
  • California tops the list of districts for bankruptcy appeals, followed by New York, Delaware,
    Florida and Texas
  • District Courts affirm Bankruptcy Court decisions more than 80% of the time, when reaching a decision.

Menlo Park, CA, October 26, 2017 – Lex Machina, a LexisNexis company and creator of the award-winning Legal Analytics® platform, today released findings from its first annual report on Bankruptcy Litigation in District Court. The report focuses solely on the 16,739 bankruptcy appeals cases that were filed in U.S. District Court from January 1, 2009 through the third-quarter of 2017, analyzing quantitative legal data to deliver key insights, findings and trends to help attorneys make more strategic legal decisions.

The report dives deep into the details of all stages of the District Court bankruptcy appeals process, from providing intelligence on opposing parties or counsel and judges, including judicial decisions and behaviors; to understanding prior case outcomes and timing data that can be used for developing case strategies and budgets.

“When all data indicates that more than 80 percent of District Court judges’ decisions affirm the Bankruptcy Court’s original ruling, it is imperative for attorneys and their clients to know how their appeals judge came to that decision and what they can do to improve their chances of becoming that other 20 percent,” said Owen Byrd, chief evangelist and general counsel of Lex Machina. “In bankruptcy appeals there are few certainties, but when data and analytics are guiding the decision-making process, attorneys can better counsel their clients as to whether it makes sense to pursue a potentially lengthy and costly appeal.”

Among the report’s key findings:

  • From January 1, 2009 through the third quarter of 2017, there were 16,739 bankruptcy cases filed in U.S. District Court.
    • Case filings increased from 1,809 cases in 2009 to a high of 2,125 cases in 2011. Since then, filings have generally declined, including a nearly 20% drop in 2016 case filings (1,674 cases)
    • In 2017, there have been only 1,277 case filings, continuing the downward trend.
  • Chapter 7 and Chapter 11 are the most common filings, accounting for 46% and 37% respectively of all bankruptcy cases filed since 2009.
    • More than 55% of cases involve an individual debtor, while 42% involve a business debtor.
  • The Central District of California leads the nation in District Court bankruptcy appeals, with 1,293 cases filed since 2009 (or just under 8% of the total cases filed).
    • The Southern District of New York is second with 1,004 cases, followed by the Southern District of Florida (755 cases), the District of Delaware (753 cases), and the Southern District of Texas (699 cases).
    • The top three most experienced Bankruptcy appeals judges are in the District of Delaware.
  • The top appellant and appellee in bankruptcy appeals is the U.S. Trustee, a federal office that participates in Bankruptcy Court cases to represent the estate or money at issue.
    • The next two top appellees are Wells Fargo and Bank of America; The U.S. Government/IRS is ranked fifth.
  • Among the top bankruptcy appellants are U.S. Trustee, Wells Fargo, Bank of America, The U.S. Government/IRS, and Wells Fargo.
  • District courts affirm bankruptcy court decisions upwards 80% of the time on decision, depending on the issue, but less often for business debtors in Chapter 11.
    • Appellants win only 8% of the time, while appellees win 32% of the time; only about 20% of bankruptcy appeals settle. (the appellee/appellant terms was reversed).

Brian Howard, legal data scientist at Lex Machina, commented, “The report shows off the various aspects of Lex Machina’s data – case filings, districts and judges, parties, and firms, outcomes.  But the really exciting part is integrating those data to draw new insights – for example comparing judge tendency to affirm or reverse on findings, or refining an estimation of success on an appeal issue by focusing only on similar business-debtor, Chapter 11 cases.  The ability to answer those questions in seconds really opens new doors for litigators.”

The report data was compiled using Lex Machina’s award-winning Legal Analytics® platform, which is used by many of the top law firms in the U.S., as well as major corporations such as Microsoft, Samsung, Nike, Sandoz, and eBay. The report findings are based upon U.S. District Court appeals from cases originally filed in the U.S. Bankruptcy Court. Lex Machina’s data is focused on the U.S. District Courts, and does not include U.S. Bankruptcy Court cases, U.S. Court of Appeals cases, or state court cases.

Armed with the report, bankruptcy appeals attorneys can make better strategic case decisions based on detailed analyses of opposing parties, districts and judges. They can also make sound budgeting decisions using historical data about case timing, and identify top parties and firms to inform marketing strategies and outside counsel selection.

To request a copy of the full report please register here:  http://pages.lexmachina.com/Email_Bankruptcy-Report-2017_LP—Social.html

About Lex Machina
Lex Machina’s award-winning Legal Analytics® platform is a new category of legal technology that fundamentally changes how companies and law firms compete in the business and practice of law. Delivered as Software-as a-Service, Lex Machina provides strategic insights on judges, lawyers, parties, and more, mined from millions of pages of legal information. This allows law firms and companies to predict the behaviors and outcomes that different legal strategies will produce, enabling them to win cases and close business.

Lex Machina was named “Best Legal Analytics” by readers of The Recorder in 2014, 2015 and 2016, and received the “Best New Product of the Year” award in 2015 from the American Association of Law Libraries.

Based in Silicon Valley, Lex Machina is part of LexisNexis, a leading information provider and a pioneer in delivering trusted legal content and insights through innovative research and productivity solutions, supporting the needs of legal professionals at every step of their workflow. By harnessing the power of Big Data, LexisNexis provides legal professionals with essential information and insights derived from an unmatched collection of legal and news content—fueling productivity, confidence, and better outcomes. For more information, please visit www.lexmachina.com.