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* Oneida Ltd. v. Pension Ben. Guar. Corp., 372 B.R. 107 (S.D.N.Y. July 2007)
(Cedarbaum, J.) You keep it: Motion to withdraw the reference was denied. A reorganized debtor sought a declaration that premiums due under ERISA (as amended by the Deficit Reduction Act of 2005) were discharged by the order confirming the chapter 11 debtor's plan of reorganization. Said the district court, because the issue required only a "simple application" of the ERISA amendment, and because bankruptcy courts routinely determine whether certain obligations are pre-petition claims or post-confirmation obligations, mandatory withdrawal was not warranted. Furthermore, the court noted that the adversary proceeding was a core matter and that no other factors warranted discretionary withdrawal.
* W.R. Grace & Co. v. Chakarian (In re W.R. Grace & Co.), 384 B.R 670 (Bankr. D. Del. Mar. 2008) (Fitzgerald, J.)
"Related-to" jurisdiction hinges on whether a third party's indemnity rights against the debtor are contractual or arise under common law. Early in the debtor's case, the court imposed a preliminary injunction enjoining actions against third parties and derivatively liable affiliates (based on the debtor's asbestos liability). Several individuals commenced a postpetition action in state court against the State of Montana for its negligence in failing to warn the victims of the debtor's asbestos hazards. The debtor and the State of Montana sought to enjoin that litigation by expanding the preliminary injunction. The court denied that motion, holding that it lacked subject matter jurisdiction to do so. See In re W.R. Grace & Co., 366 B.R. 295 (Bankr. D. Del. 2007). This opinion was the court's ruling on the debtor's motion to reconsider. In denying the motion, the court clarified the distinction between contractual and common law indemnity rights. The court held that it lacked jurisdiction over the action against the State because a judgment against the State would only affect the debtor if the State later brought a separate legal action to enforce a common law right of indemnity. Under Pacor and Federal-Mogul, the court noted, those claims are not "related to" the estate because they only affect the bankruptcy estate indirectly. If, on the other hand, the State had a contractual right of indemnity against the debtor, the court recognized, a judgment against the State would affect the bankruptcy estate directly such that the court would have subject matter jurisdiction over the claims and thus the ability to enjoin them. See the difference?
* Bally Total Fitness Corp. v. Contra Costa Retail Ctr., LLC, 384 B.R 566 (Bankr. N.D.
Cal. Feb. 2008) (Tchaikovsky, J.) Bankruptcy court found that "discretionary remand" was warranted. Prior to the commencement of this bankruptcy case, a landlord commenced a state-court unlawful detainer action against the debtor. Before the action could be resolved, however, the debtor commenced its chapter 11 case, thereby staying the continuation of the unlawful detainer action. The debtor's pre-packaged chapter 11 plan was confirmed shortly thereafter, through which the debtor assumed its disputed lease with the landlord. The debtor then filed its notice of removal of the unlawful detainer action to a bankruptcy court. The landlord objected and filed a motion to remand, or in the alternative, to abstain.
Strictly speaking, said the court, the standards for abstention under 28 U.S.C. S 1334(c)
