Evolution Credit Partners

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE FIRST BRANDS GROUP, LLC
EVOLUTION CREDIT PARTNERS, et
al.,
Appellant,
v.
FIRST BRANDS GROUP, LLC, et al.,
Appellees.
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CIVIL ACTION NO. H-26-4705
BANKRUPTCY CASE NO. 25-90399
ADVERSARY CASE NO. 26-3006
MEMORANDUM OPINION AND ORDER
Evolution Credit Partners and its related entities appeal a Bankruptcy Court order denying
their motion for summary judgment in an adversary proceeding that they initiated to determine
whether they have a first-priority security “interest on approximately $60.5 million worth of First
Brands’s receivables.” See In re First Brands Grp., LLC, No. BR 25-90399, 2026 WL 253634, at
*1 (S.D. Tex. Jan. 31, 2026). The Bankruptcy Court held that Evolution “does not have a perfected
security interest in the non-purchased receivables with priority over the postpetition debtor-in-
possession financing lenders’ interest in those receivables.” 	(Docket Entry No. 1-1 at 11).
Evolution argues that the Bankruptcy Court’s summary judgment order is an appealable final
order. 	(Docket Entry No. 1). 	In the alternative, Evolution moves for leave to appeal from that
order. (Docket Entry No. 2).
Based on the motion, the response, the reply, and the applicable law, and with the help of
oral argument, the court denies the motion for leave to appeal, (Docket Entry No. 2), and dismisses
the appeal for lack of jurisdiction.
United States District Court
Southern District of Texas
ENTERED
July 27, 2026
Nathan Ochsner, Clerk
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First, the summary judgment order is not an appealable final order. An order is final and
appealable if it “constitutes either a final determination of the rights of the parties to secure the
relief they seek, or a final disposition of a discrete dispute within the larger bankruptcy case.” In
re ASARCO, L.L.C., 650 F.3d 593, 600 (5th Cir. 2011) (quoting In re Kizzee–Jordan, 626 F.3d
239, 242 (5th Cir. 2010)). Evolution argues that the summary judgment order denied the ultimate
relief it sought in the complaint filed in the adversary proceeding: that the Bankruptcy Court
declare that Evolution holds a first-priority security interest in the non-purchased receivables.
(Docket Entry No. 2 at 8). Although the Bankruptcy Court denied Evolution its preferred relief,
the adversary proceeding has not concluded. 	Fact issues remain to be tried in the Bankruptcy
Court on whether Evolution has priority over other pre-petition secured lenders. (See Docket Entry
No. 1-1 at 23–24).
“[E]ven though the adversary proceeding may for these purposes be considered a separate
judicial unit, nevertheless for this Court to have jurisdiction under section 158 the order must
finally dispose of all the issues in that separate proceeding.” In re Louisiana World Exposition,
Inc., 832 F.2d 1391, 1396 (5th Cir. 1987). The appealed order must “wholly terminate[] the entire
adversary proceeding.” Id.; see In re England, 975 F.2d 1168, 1172 (5th Cir. 1992) (“Finality in
bankruptcy cases is contingent upon the conclusion of an adversarial proceeding within the
bankruptcy case, rather than the conclusion of the entire litigation.”); see also Vasquez v. Gonzalez,
No. 7:20-CV-00355, 2021 WL 4459751, at *1 (S.D. Tex. June 2, 2021) (“The Fifth Circuit has
explained that only the resolution of an entire adversarial proceeding is ‘final.’”). 	Because the
summary judgment order does not terminate the underlying adversary proceeding, it is not final.
Compare In re Saco Loc. Dev. Corp., 711 F.2d 441, 448 (1st Cir. 1983) (Breyer, J.) (holding that
an order that determined the priority of a claim and resolved a complete dispute was a final order),
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with In re Natale, 295 F.3d 375, 380 (3d Cir. 2002) (distinguishing Saco because it did not address
“an ongoing adversary proceeding . . . with issues still extant”).
Second, Evolution has not established the basis for an interlocutory appeal. “Most district
courts in this circuit have adopted the standard under 28 U.S.C. § 1292(b) for interlocutory appeals
from district court orders: (1) a controlling issue of law must be involved; (2) the question must be
one where there is substantial ground for difference of opinion; and (3) an immediate appeal must
materially advance the ultimate termination of the litigation.” Cluster Holdco, LLC v. Byman, 821
F. Supp. 3d 800, 812 (S.D. Tex. 2026) (quoting Off. Comm. of Equity Sec. Holders v. Sorrento
Therapeutics, Inc., No. BR 23-90085, 2025 WL 933723, at *5 (S.D. Tex. Mar. 27, 2025)).
The second element is not met. 	“[P]arties seeking interlocutory appeal must show
substantially differing views regarding the legal issue before the court.” Stoffels ex rel. SBC Tel.
Concession Plan v. SBC Commc’ns, Inc., 572 F. Supp. 2d 809, 811 (W.D. Tex. 2008). 	Courts
have found there is “substantial ground for difference of opinion” about the legal issue if “a trial
court rules in a manner which appears contrary to the rulings of all Courts of Appeals which have
reached the issue, if the circuits are in dispute on the question and the Court of Appeals of the
circuit has not spoken on the point, if complicated questions arise under foreign law, or if novel
and difficult questions of first impression are presented.” In re Hallwood Energy, L.P., BR 09–
31253–SGJ–11, 2013 WL 524418, at *3 (N.D. Tex. 2013) (quoting Ryan v. Flowserve Corp., 444
F. Supp. 2d 718, 723–24 (N.D. Tex. 2006)). Vehement disagreement with the ruling below does
not satisfy the interlocutory-appeal standard. Flowserve Corp., 444 F. Supp. at 724. Under this
standard, courts have generally refused to consider suitable for interlocutory appeal even pure legal
questions, such issues of contract interpretation, that are fairly routine and case-specific. 	See
Ahrenholz v. Bd. of Trs. of Univ. of Ill., 219 F.3d 674, 676 (7th Cir. 2000) (“[T]he question of the
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meaning of a contract, though technically a question of law when there is no other evidence but
the written contract itself, is not what the framers of section 1292(b) had in mind either.”); see,
e.g., Sims v. Allstate Fire & Cas. Ins. Co., No. SA-22-CV-00580-JKP, 2025 WL 2946616, at *2
(W.D. Tex. Sept. 23, 2025); Consumers Energy Co. v. Toshiba Am. Energy Sys. Corp., No. 22-
10847, 2025 WL 2233979, at *1–2 (E.D. Mich. Aug. 6, 2025) (collecting cases).
The perfection issue that is the basis of Evolution’s appeal is not one on which there is a
substantial difference of opinion. Evolution argues that the Bankruptcy Court applied the incorrect
legal standard when interpreting its financing statement. (Docket Entry No. 2 at 11–16). Under
the proper standard, according to Evolution, a financing statement puts subsequent creditors on
notice of a security interest if the collateral description shows that a “secured party may have a
security interest in the collateral.” (Id. at 15 (cleaned up)). But the Bankruptcy Court applied that
standard. The Bankruptcy Court concluded that the financing statement’s “collateral description
cannot be reasonably interpreted to include the non-purchased receivables.” (Docket Entry No. 1-
1 at 22). The Bankruptcy Court reiterated that the “financing statements don’t say what Evolution
wants them to say.” (Id. at 19). The parties’ disagreement is not over a controlling legal rule or
standard but with how the Bankruptcy Court read the financing statements and the collateral
descriptions. Much like disagreement over how to interpret a contract, a disagreement over how
to interpret a financing statement does not support an interlocutory appeal.
Lastly, this court “finds that judicial economy, efficiency, and the interests of the parties
in obtaining an overall conclusion of the [adversary] proceeding weigh in favor of allowing the
Bankruptcy Court to proceed and to complete the [adversary proceeding] in its entirety.” 	In re
Cella III, LLC, 619 B.R. 627, 635 (E.D. La. 2020). Once the adversary proceeding concludes, the
court can address perfection and priority, including the parties’ relative priorities, in one appeal.
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Evolution argues that the remaining issues are “academic” because its lien will be avoided,
eliminated, or undermined “before an appellate court can weigh in.” (Docket Entry No. 4 at 7, 9–
10). But any such order will be final and immediately appealable. The court reviewed a similar
order on an expedited basis in January. See First Brands, 2026 WL 253634, at *5–6 (reviewing
an order that released Evolution’s alleged collateral). 	It is prepared to do so again if and when
needed. 	Cf. United States v. Texas, 144 S. Ct. 797, 797–98 (2024) (Barrett, J., concurring)
(discussing administrative stays to “buy[] the court time to deliberate”); Book People, Inc. v. Wong,
91 F.4th 318, 328 (5th Cir. 2024) (noting that the panel issued an administrative stay).
For these reasons, the motion for leave to appeal, (Docket Entry No. 2), is denied, and this
appeal is dismissed for a lack of subject-matter jurisdiction.
SIGNED on July 27, 2026, at Houston, Texas.
________________________________
Lee H. Rosenthal
Senior United States District Judge
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