In re Nichols, (D MD, Aug. 15, 2014), is an action by the trustee for the bankruptcy estate of Lynette Tawana Nichols seeking to recover from God's Universal Kingdom Christian Church over $93,000 in contributions the church received from Nichols in the three years preceding her filing for bankruptcy. Nichols was president of the church, and the contributions greatly exceeded those she made in prior years. The trustee claimed these were fraudulent conveyances that could be recovered for the benefit of Nichols' creditors. The church argued that the claim was barred by the Religious Freedom Restoration Act, but the bankruptcy court issued an interlocutory order refusing to dismiss the trustee's claim. It cited the subsequently enacted Religious Liberty and Charitable Donations Act of 1998 (RLCDA) that validates in bankruptcy good faith contributions under 15% of gross income or larger contribtuions that are similar to those a debtor made in past years. The bankruptcy court concluded that, subject to those protections, the trustee's claim could proceed.
The present opinion involves a motion by the church to appeal the bankruptcy court's interlocutory order to the district court. However appeal of a bankruptcy court's interlocutory order-- as opposed to an appeal once a final judgment is entered-- is available only if there is a difference of opinion among courts on a controlling issue of law. The district court concluded that there is no controversy among courts because there is no case law indicating that application of the RLCDA violates RFRA. Thus an immeidate appeal of the interlocutory order is not appropriate.
