Opinion
No. 76 B 2493-94
January 15, 1980
Former Bankruptcy Act — Jurisdiction — Adstention — State Usury Law — prejudice
The court declined jurisdiction over a controversy involving an interpretation and application of the Illinois usury statute because all creditors under the Chapter XIII plan of arrangement had been paid in full and the trustee had no interest in the complaint. Further, the court found that an interpretation and application of the state usury law affecting rights in land is particularly suited to decision before a state court. See Sec. 2a(22) at ¶ 2062-1 and Sec. 305(a) at ¶ 8018.
[Digest of Opinion]
The debtors alleged in a Motion for Summary Judgment on their Complaint to Determine Offsets that the creditors had received interest at an unlawful rate in violation of Ill. Rev. Stat. ch. 74, section 6. The court, however, noted that generally "a court of bankruptcy will not take jurisdiction of a controversy over a matter in which the trustee has no interest." In this instance all creditors to be paid under the debtors' Chapter XIII plan had been paid in full. Therefore, the trustee had no interest in the instant complaint.Further, the court found it appropriate to withhold its jurisdiction under Section 2a(22) of the Bankruptcy Act because such an interpretation and application of state usury law affecting rights in land and involving principles which differ from state to state are particularly suited to decision before the state court. Thus, although the debtor's property was still within the jurisdiction of the bankruptcy court, it was ordered that the parties seek relief in another forum.