It asserts that the contemplated trial, which is projected to last as long as four months, is simply beyond the competence of the Bankruptcy Court, and would be better served by the presumed expertise of this Court in trying complex matters. There is indeed authority for withdrawing the reference where a proceeding is expected to be exceptionally complex, seeBraniff Int'l Airlines, Inc. v. Aeron Aviation Res. Holdings II, Inc. (In re Braniff Int'l Airlines, Inc.), 159 B.R. 117, 126(E.D.N.Y.1993); Complete Mgmt. Inc. v. Arthur Andersen, LLP (In re Complete Mgmt. Inc.), No. 02 Civ. 1736, 2002 WL 31163878, at *3 (S.D.N.Y. Sept. 27, 2002); Judge v. Ridley & Schweigert (In re Leedy Mortgage Co.), 62 B.R. 303, 306 (E.D.Pa.1986), and it would unquestionably lie within this Court's discretion to do so. In the specific circumstances of this case, however, such an exercise of discretion would be unwise.
Citigroup's remaining argument for withdrawal of the reference may be dealt with more summarily. It asserts that the contemplated trial, which is projected to last as long as four months, is simply beyond the competence of the Bankruptcy Court, and would be better served by the presumed expertise of this Court in trying complex matters. There is indeed authority for withdrawing the reference where a proceeding is expected to be exceptionally complex, see Braniff Int'l Airlines, Inc. v. Aeron Aviation Res. Holdings II, Inc. (In re Braniff Int'l Airlines, Inc.), 159 B.R. 117, 126 (E.D.N.Y. 1993); Complete Mgmt. Inc. v. Arthur Andersen, LLP (In re Complete Mgmt. Inc.), No. 02 Civ. 1736, 2002 WL 31163878, at *3 (S.D.N.Y. Sept. 27, 2002); Judge v. Ridley Schweigert (In re Leedy Mortgage Co.), 62 B.R. 303, 306 (E.D. Pa. 1986), and it would unquestionably lie within this Court's discretion to do so. In the specific circumstances of this case, however, such an exercise of discretion would be unwise.
Bankruptcy cases in this district are automatically referred to bankruptcy courts upon filing pursuant to a standing order issued on August 28, 1986. See Braniff Int'l Airlines v. Aeron Aviation Res. Holdings II, Inc. (In re Braniff Int'l Airlines), 159 B.R. 117, 121 (E.D.N.Y.1993). District courts may withdraw bankruptcy references sua sponte or upon motion for cause.
In addition to being appropriate for permissive withdrawal, ACB's argument that Houbigant having agreed to the withdrawal in the first instance is estopped from seeking remand now is appealing. In In re Braniff Int'l Airlines, Inc., 159 B.R. 117, 126 (E.D.N.Y.), the District Court held that "where a trustee in bankruptcy has elected to pursue litigation in a forum other than the bankruptcy court, he is estopped from requesting a later referral to the bankruptcy court." In this case, however, there had been changes in the circumstances of the adversary proceeding since Houbigant first consented to the withdraw.
It is generally accepted that a core proceeding is one which "invokes a substantive right provided by title 11 or is a proceeding that, by its nature, could arise only in the context of a bankruptcy case." In re Wood, 825 F.2d 90, 97 (5th Cir. 1987); see also In re Riverside Nursing Home, 144 B.R. 951, 955 (S.D.N.Y. 1992); In re J.T. Moran, 124 B.R. 931, 937 (S.D.N.Y. 1991); Inre Brooks Fashion Stores, Inc., 124 B.R. 436 (S.D.N.Y. 1991); In re Braniff International Airlines, Inc., 159 B.R. 117, 125 (E.D.N.Y. 1993). The Second Circuit has refined this analysis by stating that "[t]he relevant analysis is whether the nature of [the] adversary proceeding, rather than the state or federal basis for the claim, falls within the core of federal bankruptcy power."
Section 157 (b)(2) of the Code sets a nonexhaustive list of core proceedings. As a general matter, a core proceeding is one "which govern[s] the administration of the debtor's estate," In re Braniff Int'l Airlines, Inc., 159 B.R. 117, 125 (E.D.N.Y. 1993), and is "integral to the core bankruptcy function of restructuring debtor-creditor rights." In re Arnold Print Works, Inc., 815 F.2d 165, 166 (1st Cir. 1987) (quoting 130 Cong. Rec. E1109 (daily ed. March 20, 1984)) (statement of Rep. Kastenmeier).
Baker v. Simpson, 613 F.3d at 351(other citations omitted); see also In re Braniff Intern. Airlines, Inc., 159 B.R. 117, 125-126 (E.D.N.Y.1993) (stating that โ[c]ore proceedings are matters which govern the administration of the debtor's estate and are proceedings traditionally within the realm of the bankruptcy court's equitable authorityโ). The โrelevant inquiry,โ in determining if an issue is core, โis whether the nature of [the] adversary proceeding [or motion], rather than the [legal] basis for the claim, falls within the core of federal bankruptcy power.โ
There is no dispute between the Trustee and DOL, and the case law is clear, that an issue is core if it "would have no existence outside of the bankruptcy." Baker v. Simpson, 613 F.3d at 351 (other citations omitted); see also In re Braniff Intern. Airlines, Inc., 159 B.R. 117, 125 โ 126 (E.D.N.Y. 1993) (stating that "[c]ore proceedings are matters which govern the administration of the debtor's estate and are proceedings traditionally within the realm of the bankruptcy court's equitable authority"). The "relevant inquiry," in determining if an issue is core, "is whether the nature of [the] adversary proceeding [or motion], rather than the [legal] basis for the claim, falls within the core of federal bankruptcy power."
It is generally accepted that a core proceeding is one which "invokes a substantive right provided by title 11 or is a proceeding that, by its nature, could arise only in the context of a bankruptcy case." In re Wood, 825 F.2d 90, 97 (5th Cir. 1987); see also In re Riverside Nursing Home, 144 B.R. 951, 955 (S.D. N.Y. 1992); In re J.T. Moran, 124 B.R. 931, 937 (S.D. N.Y. 1991); In re Brooks Fashion Stores, Inc., 124 B.R. 436 (S.D. N.Y. 1991); In re Braniff International Airlines, Inc., 159 B.R. 117, 125 (E.D. N.Y. 1993). The Second Circuit has refined this analysis by stating that "[t]he relevant analysis is whether the nature of [the] adversary proceeding, rather than the state or federal basis for the claim, falls within the core of federal bankruptcy power."
" On the other hand, paragraph (c) provides that for those matters which are not "core proceedings," but which are "otherwise related to a case under title 11," this Court is to simply "submit proposed findings of fact and conclusions of law to the district court." As these distinctions pertain to the overall grant of jurisdictional authority set forth under paragraph (a), core proceedings generally relate to those matters, as enumerated in paragraph (a), "arising under" or "arising in" a bankruptcy case โ i.e., those matters which would have no existence outside of bankruptcy. Braniff Int'l Airlines v. Aeron Aviation Res. Holdings II, Inc. (In re Braniff Int'l Airlines), 159 B.R. 117, 125 (E.D.N.Y. 1993). By comparison, those "related to" matters as referred to in both paragraphs (a) and (c) of ยง 157, and over which this Court lacks the authority to enter final orders and judgments, generally encompass a state or federal claim which arises between parties within a bankruptcy proceeding, but which could otherwise survive outside of bankruptcy.