Opinion
Case No. 2:03-CV-1093
June 2, 2004
ORDER DENYING MOTION FOR WITHDRAWAL OF REFERENCE
This bankruptcy case is before the court on Debtor Elwood Nielsen's pro se motion for withdrawal of the reference to bankruptcy court. Pursuant to 28 U.S.C. § 157(a), Debtor's case was referred to the bankruptcy court. The bankruptcy proceedings in this case date back to 1986. In November, 2003, the Trustee filed a Motion for Order Discharging Trustee and Closing Case. On December 11, 2003, Debtor filed this motion to withdraw. Debtor's motion is untimely and is therefore denied.
The conditions which must be met before mandatory withdrawal is appropriate are three-fold. First, the person seeking withdrawal must be a party to the proceeding. Second, the motion to withdraw the reference must be timely filed; and third, resolution of the proceeding must require consideration of both of the Bankruptcy Code and of nonbankruptcy federal statutes regulating interstate commerce.
In re Baldwin-United Corp., 57 B.R. 751 (S.D. Ohio 1985).
On the issue of timeliness, a leading bankruptcy commentator has stated that "[i]f a motion for withdrawal of reference is not timely made it will almost certainly be held that the provisions of the second sentence of [§] 157(d) have been waived." It is generally accepted that "the word `timely' means `at the first reasonable opportunity'. . . . The fair intendment of the statute in question [§ 157(d)] is to insure that the request for withdrawal be filed as soon as practicable after it has become clear that `other laws' of the genre described in 28 U.S.C. § 157(d) are implicated, so as to protect the court and the parties in interest from useless costs and disarrangement of the calendar, and to prevent unnecessary delay and the use of stalling tactics. . . . Once it becomes apparent that such an issue is in the case, a party has a plain duty to act diligently-or else, to forever hold his peace."
1 Collier Bankruptcy Manual 3.01(2)(e) (1991).
Laine v. Gross, 128 B.R. 588, 588-89 (D. Maine 1991) (quoting In re Giorgio, 50 B.R. 327 (D.R.I. 1985)).
Debtor filed his motion for withdrawal on the brink of closure of the bankruptcy case. All of the non-exempt assets of the estate had been distributed and the estate balance was at $0. The Trustee had filed his motion for discharge and closing of the case. Granting Debtor's motion to withdraw at this late juncture would promote forum shopping. Furthermore, since this case has been in bankruptcy court for over a decade, it would hardly promote judicial economy to start over in district court. Additionally, nothing in Debtor's motion reveals that "consideration of both Title 11 and other laws of the United States regulating organizations of activities affecting interstate commerce" would be necessary to resolve his claims. Finally, to the extent Debtor asks this court to exercise its discretion to withdraw the reference under § 157(d), the court concludes that Debtor has failed to show cause and that in any event such a request would also be untimely.
See In re New York Trap Rock Corp., 158 B.R. 574, 577 (S.D.N.Y. 1993) ("Forum shopping efforts pursued by awaiting a decision relevant to the merits and then bypassing or filing a motion to transfer should not be rewarded with success.").
In re Orion Pictures Corp., 4 F.3d 1095 (2d Cir. 1993).
The court therefore concludes that Debtor's motion for withdrawal is untimely and is therefore DENIED.