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Showing 4 posts in Core & Non-Core Proceedings.

Stern Dissent Takes Majority in Wellness, Holds Parties Can Consent To Bankruptcy Court Final Adjudication of Stern Claims

Wellness Int’l Network, Ltd. v. Sharif, 575 U.S. ---- (2015)

On May 26, 2015, the Supreme Court closed the loop on an issue left open by the High Court’s previous decisions in Stern v. Marshall, 564 U.S. ____ (2011) (holding that Article III prevents bankruptcy courts from entering final judgments on Stern claims (i.e., proceedings that are defined as core under 28 U.S.C. § 157(b) but that may not, as a constitutional matter, be adjudicated as such)) and Executive Benefits Insurance Agency v. Arkison, 573 U.S. ___ (2014) (permitting bankruptcy courts to submit proposed findings of fact and conclusions of law on Stern claims to the district courts for review under 28 U.S.C. § 157(c)(1)).  Ruling once again on the bankruptcy court’s authority to issue final judgments with respect to Stern claims, the Court held—in a 6-3 decision—that Article III, § 1, of the Constitution is not violated when a bankruptcy court enters a final order adjudicating a Stern claim on the parties’ consent under 28 U.S.C. § 157(c)(2).  The Court also held that while consent need not be express, it must be given knowingly and voluntarily. Read More ›

Merely Labeling A Claim “Turnover” Under Bankruptcy Code Section 542 Does Not Always Yield A “Core” Claim

IPC Int’l Corp. v. Milwaukee Golf Shopping Center LLC (In re IPC Int’l Corp.), Adv. No. 14-50333 (MFW), 2014 WL 5544692 (Bankr. D. Del. Nov. 3, 2014)

In this adversary proceeding, Judge Walrath granted a motion to transfer venue, holding that all alleged claims (including a claim for turnover under Bankruptcy Code section 542) were non-core and that the interests of justice and convenience of the parties weighed in favor of transfer. Read More ›

In Determining Whether a Claim is Core, the Focus Should Be on the Nature of the Dispute, Not Its Significance (Economic or Otherwise) to the Debtors and Their Estates

Longview Power, LLC v. First Am. Title Ins. Co. (In re Longview Power, LLC), Adv. No. 14-50369 (BLS), Memorandum Order, Adv. Docket No. 57 (Bankr. D. Del. Aug. 12, 2014)

In the Longview Power bankruptcy proceedings, the debtors (the “Debtors”) have proposed a chapter 11 plan of reorganization that contemplates satisfying, if ultimately allowed, certain mechanics’ lien claims asserted in the aggregate amount of over $335 million from the proceeds of a title insurance policy (the “Title Insurance Policy”) issued by First American Title Insurance Co. (“First American”).  The policy was issued in the amount of $825 million to the first-lien collateral agent under the Debtors’ prepetition secured credit agreement (the “Collateral Agent” and together with the Debtors, the “Plaintiffs”) for the benefit of the lenders.  To effectuate the proposed plan, the Collateral Agent agreed to assign the Title Insurance Policy’s cash proceeds (not the policy or any claims asserted thereunder) to a trust for the benefit of the claimants. Additionally, the Plaintiffs commenced an adversary proceeding against First American to obtain a determination from the Court that coverage exists under the Title Insurance Policy on account of the mechanics’ lien claims and that the proceeds of the Title Insurance Policy are property of the Debtors’ estates under section 541 of the Bankruptcy Code. Read More ›

Stern Claims Should be Treated as Non-Core Under Section 157(c)(1); Ability to Consent Under Section 157(c)(2) Reserved For Another Day

Executive Benefits Insurance Agency v. Arkison, Chapter 7 Trustee of the Estate of Bellingham Insurance Agency, Inc., 573 U.S. ___ (2014) 

Writing for a unanimous Court, Justice Thomas explained in Executive Benefits Insurance Agency v. Arkison, 573 U.S. ___ (2014) that a Stern claim (i.e. a proceeding that is defined as core under 28 U.S.C. § 157(b) but that may not, as a constitutional matter, be adjudicated as such) should proceed as non-core within the meaning of section 157(c)(1) so long as it otherwise satisfies the criteria of such section (i.e. “is not a core proceeding but . . . is otherwise related to a case under title 11”).  Importantly, the Court did not address whether Article III allows a bankruptcy court, with the consent of parties, to enter a final judgment on a Stern claim pursuant to section 157(c)(2). Read More ›