Opinion
No. 79-00018
February 12, 1980
Jurisdiction — Summary — Adverse Claim — Instrumentality of Bankruptcy
The court does not have summary jurisdiction over property which is not within the court's possession if a bona fide adverse claim is made to that property. Even though the claimant and the bankrupt were related corporations with overlapping control such that the determination of whether the claim was "substantially adverse" was a difficult one, the court determined that a bona fide question existed as to possession. Therefore, the court did not have summary jurisdiction to determine the matter. See Sec. 2a at ¶ 2041.
[Digest of Opinion]
The trustee sought a turnover of assets of the defendant corporation, alleging that these assets were in the actual possession of the bankrupt on the date of the bankruptcy and therefore subject to summary jurisdiction of the bankruptcy court. The trustee argued that the defendant was merely an instrumentality or "alter ego" of the bankrupt.The court first noted that summary jurisdiction does not exist if a bona fide adverse claim is made to property which is not within the court's possession. However, the bankruptcy court may make a jurisdictional inquiry into the merits of the action to determine if the claim is substantial. "The test of `substantiality' of a claim is whether the claimant's action discloses a contested matter of right involving some `fair doubt and reasonable room for controversy.'"
In this instance, the facts raised, including separate management and separate records of the corporations, and the sale of assets after bankruptcy by the trustee to the claimant corporation, indicated that a bona fide question existed as to possession. Therefore, the court lacked summary jurisdiction.