We note that the In re RBGSC Inv. Corp. decision has not received subsequent support among district courts in this circuit or others. See, e.g., Mirant Corp. v. Southern Co., 337 B.R. 107, 119 (N.D.Tex. 2006) (disagreeing with the bankruptcy court that "non-core claims were so inter-twined with the other claims in the complaint" that core bankruptcy jurisdiction lay); Davis, 282 B.R. at 193 (rejecting defendant's argument that the state court cause of action "is a core proceeding merely because it is `intertwined with' its indemnity claim"); In re Winstar Commc'n, Inc., 284 B.R. 40, 50 (Bankr.D.Del. 2002) (evaluating claims arising out of a contract between plaintiff and three sellers, two chapter 11 debtors and wholly-owned subsidiary non-debtor, and holding that "the mere fact that there may be common issues of fact between a civil proceeding and a controversy involving the bankruptcy estate does not bring the matter within the scope of section 1334(b)). Accepting the rule that Exide urges would turn virtually every claim contained in an action in which the debtor is one of the defendants and which is later removed to bankruptcy court into a core proceeding.
To qualify for subchapter S status, a corporation must have 75 or fewer members and no more than one class of stock. In arguing that an increase in the value of DGI's stock will neither alter the debtor's rights, liabilities, options, or freedom of action nor impact the administration of the bankruptcy estate, Defendants rely primarily on Equity Broad. Corp. v. Shubert (in re Winstar Communications, Inc.), 284 BR 40, 51 (Bankr. D. Del. 2002). In Shubert, the Delaware court was presented with a situation somewhat similar to that presented here. The question presented was whether, under the "Pacor" test, a bankruptcy court has jurisdiction to hear an adversary proceeding between two non-debtors when the bankruptcy trustee is the sole shareholder of the parent corporation of the non-debtor subsidiary asserting a claim against another non-debtor.
(Defendants' Motion at 9; Supplemental Memorandum at 6). In support of their argument, the Defendants cite In re Winstar Commc'ns Inc., 284 B.R. 40, 51 (Bankr. D. Del. 2002) ; In re Mordini, 491 B.R. 567, 571 (Bankr. D. Colo. 2013) ; Tower Auto. Mex. v. Grupo Proeza, S.A., 356 B.R. 598, 602 (Bankr. S.D.N.Y. 2006). The flaw in the Defendants' arguments is that they are grounded in facts that are in dispute and not amenable to resolution in a Rule 12(b)(1) facial attack on the court's jurisdiction.
EBC's action may have an effect on the ultimate value with [sic] the estate receives for the stock it owns, but it does not alter the estate's rights, liabilities, options or freedom of action. If the court were to find that this action was under the jurisdiction of the Bankruptcy Court, the decision would have the result of bringing every wholly owned subsidiary into every Bankruptcy case regardless of the circumstances and without the safeguards afforded by schedules, statements of financial affairs, notices to creditors, or meetings of creditors.Equity Broad. Corp. v. Shubert (In re Winstar Commc'ns, Inc.), 284 B.R. 40, 51 (Bankr. D. Del. 2002). When the Court originally raised the issue, it thought that the jurisdictional basis of this action was the indirect parent-subsidiary relationship between Ampal and MAG. It questioned its jurisdiction in light of the decisions in Beck and Tower. It has since become clear that the parent-subsidiary relationship does not provide a jurisdictional basis to decide this adversary proceeding because, inter alia, MAG is insolvent, its stock is worthless and the outcome of this lawsuit will not relieve its insolvency.
IT went on to add that an action is related to bankruptcy if "the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively), and which in any way impacts upon the handling and administration of the bankrupt estate." Equity Broad Corp. v. Shubert (In re Winstar Communs. Inc.), 284 B.R. 40, 50 (Bankr. D. Del.2002) (quoting Pacor v. Higgins, 743 F.2d 984 (3d Cir. 1984)). It is unfortunate that Pacor and its analysis have been applied without real analysis to broad arrays of circumstances far different from those that engendered the oft-repeated language in Pacor.
Id. at 4. Bendix Home Sys., Inc. v. Hurston Enters., 566 F.2d 1039, 1042 (5th Cir. 1978); In re Holywell Corp., 118 B.R. 876, 879 (S.D. Fla. 1990); In re Tower Automotive, Inc., 356 B.R. 598 (Bankr. S.D.N.Y. 2006); Equity Broad. Corp. v. Shubert (In re Winstar Commc'ns, Inc.), 284 B.R. 40, 51 (Bankr. D. Del. 2002). The cases cited by the Respondents involve corporations that were operating entities with boards of directors and management. Corporate formalities were being observed by these corporations.
An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.'" Equity Broad Corp. v. Shubert (In re Winstar Communs. Inc.), 284 B.R. 40, 50 (Bankr. D. Del. 2002) (quoting Pacor v. Higgins, 743 F.2d 984 (3d Cir. 1984)). Here, resolution of the Smiths' FDCPA and state law claims can have no impact at all on the administration of the Smiths' bankruptcy estate.
An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.'" Equity Broad Corp. v. Shubert (In re Winstar Communs. Inc.), 284 B.R. 40, 50 (Bankr. D. Del. 2002) (quoting Pacor v. Higgins, 743 F.2d 984 (3d Cir. 1984)). Here, resolution of the Smiths' FDCPA and state law claims can have no impact at all on the administration of the Smiths' bankruptcy estate.
An action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.'" Equity Broad Corp. v. Shubert (In re Winstar Communs. Inc.), 284 B.R. 40, 50 (Bankr. D. Del. 2002) (quoting Pacor v. Higgins, 743 F.2d 984 (3d Cir. 1984)). The only possible avenue for this court to exercise jurisdiction over the Wilkinsons' post-discharge, state law claim for an accounting is the "related to" prong of section 1334(b).
Conversely, the bankruptcy court has no jurisdiction over a matter that does not affect the debtor.'" CBI Eastchase, L.P. v. Farris (In re e2 Communs., Inc.), No. 05-3051-BJH, 2005 Bankr. LEXIS 3250, at *10 n.5 (Bankr. N.D. Tex. Mar. 24, 2005) (quoting Feld v. Zale Corp. (In re Zale), 62 F.3d 746, 753 (5th Cir. 1995)); Equity Broad Corp. v. Shubert (In re Winstar Communs. Inc.), 284 B.R. 40, 50 (Bankr. D. Del. 2002) (citing Pacor v. Higgins, 743 F.2d 984 (3d Cir. 1984)). Cases arising under or arising in a bankruptcy case are core proceedings, while cases related to a bankruptcy case are non-core proceedings.