Opinion
01 C 2080
October 7, 2003
Plaintiff moves for an order withdrawing the reference of the Case No. 03 A2268 from the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, pursuant to 28 U.S.C. § 157(d), Rule 5011(a) of the Federal Rules of Bankruptcy Procedure, and Internal Operating Procedure 14 of the U.S. Bankruptcy Court for this District.
On or about March 24, 2003, defendant, Kathleen F. Cullen, filed a voluntary bankruptcy petition for Chapter 7 relief under the Bankruptcy Code. Plaintiff holds a substantial claim against defendant. Previously, plaintiff filed a complaint ("Original Action") in this court naming Cullen as a defendant. The complaint alleged that the corporation for which Cullen was at all relevant times a shareholder and officer owed plaintiff approximately $4.5 million arising from an unpaid loan. Also included in the complaint were various fraud allegations involving Cullen. Plaintiff conducted an investigation prior to Cullen's filing for bankruptcy that led it to believe that Cullen, working in concert with other parties, engaged in fraudulent acts. On or about July 21, 2003, plaintiff filed a complaint ("Adversary Proceeding") against Cullen seeking (a) a finding that plaintiff's claims against Cullen are not dischargeable pursuant to 11 U.S.C. § 523(a) due to her allegedly wrongful acts and (b) a money judgment for the amount of its claim. Plaintiff has requested a trial by jury to the extent permitted by law but has not consented to the bankruptcy charge conducting the jury trial. Pursuant to 28 U.S.C. § 157(a), the Adversary Proceeding was referred to this court by the bankruptcy judge, subject to a withdrawal of the reference, if appropriate.
Cullen argues that a dischargeability determination can only be made by the bankruptcy court because it is a core claim. However, under 28 U.S.C. § 1334(b), "all civil proceedings arising under . . . arising in or related to" bankruptcy cases fell within the jurisdiction of the District Court, and the District Court may refer core or non-core matters to the bankruptcy court, subject to withdrawal of any matter for cause if a timely request is made. 28 U.S.C. § 157(d).
The Adversary Proceeding deals with parties, facts, and legal issues that are almost identical to those at issue in the Original Action. The contested issues are the same in both, and there appears to be no reason why these same issues must be considered in two different courts. One of the other individuals named as a defendant in the Original Action, Brett Seibert, file for bankruptcy, and at plaintiff's request, I withdrew the reference of the adversary proceeding in that case and have procedurally joined it with the Original Action. Cullen has given no compelling reason why I should treat her case differently. Indeed, it appears to serve the interests of judicial efficiency best to keep all matters with issues identical to those of the Original Action so that unnecessary repetition can be avoided.
For these reasons, plaintiff's motion to withdraw the reference is GRANTED.