Opinion
No. 01 C 9915
May 3, 2002
MEMORANDUM OPINION AND ORDER
The trustee has sued Catherine Clare Mantelman, the wife of the debtor, to recover allegedly fraudulent transfers. Mantelman moved to withdraw the reference, having demanded a jury. Even though the trustee's claim is a core proceeding, any jury trial would have to take place in district court. Matter of Grabill Corp., 967 F.2d 1152 (7th Cir. 1992). We withdrew the reference, not aware that Mantelman had, three days before, filed an answer in which she asserted a setoff as an affirmative defense. The trustee now moves to strike the jury demand and for reconsideration of the withdrawal of reference. The motions are granted, and the withdrawal of reference is vacated.
Mantelman relies upon In re Concept Clubs, Inc., 154 B.R. 581 (D. Utah 1993), and it does support her position. We agree, however, with In re North American Energy Conservation, Inc., 2000 U.S. Dist. Lexis 15084 (S.D.N.Y. Oct. 12, 2000), and In re Commercial Financial Services, Inc., 255 B.R. 68 (Bankr. N.D. Okla. 2009). A setoff is but another way of making a claim against the estate, and it invokes the equitable jurisdiction of the bankruptcy court. Once having submitted to that jurisdiction, can and should Mantelman be permitted to, in effect, rewrite history by dropping her setoff claims? We think the answer is probably no, but that issue, as well as the trustee's motion to strike Mantelman's first affirmative defense, we leave to the bankruptcy court.