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do not apply to a motion to remand. However, the court also noted that "failure to remand where all of the elements of mandatory abstention are present would be an abuse of the Court's discretion." Interestingly enough, the court found that the elements of mandatory abstention were not met -- federal diversity jurisdiction existed independently from bankruptcy jurisdiction. Nevertheless, said the court, the seven factors commonly used in the context of discretionary abstention clearly weighed in favor of granting the motion to remand. Thus, the court used the standard for discretionary abstention in granting the landlord's motion to remand.
*
Liani v. Baker (In re Baker), 374 B.R. 498 (Bankr. E.D.N.Y. Aug. 2007) (Milton, J.) Abstention from deciding who gets escrow funds after a section 363 sale was unwarranted. The chapter 11 debtor requested that the court abstain from hearing the escrow agent's claims against the debtor for funds held in escrow from the sale of property of the estate under section
363. The court held that the debtor failed to establish how abstention would be warranted under either subsection of 28 U.S.C. S 1334(c). Specifically, the section 363 sale order expressly retained jurisdiction over the matter, no state court action was pending, the case had been pending for over six years, and abstention would only cause further delay. The court therefore denied the debtor's motion for abstention.
* In re the Roman Catholic Bishop of San Diego, 374 B.R. 756 (Bankr. S.D. Cal. Aug. 2007) (Adler, J.)
Do not confuse the standards of discretionary abstention with the standards for remand.
On the eve of trial of several child sexual abuse actions against the Roman Catholic Bishop of San Diego, it filed a voluntary chapter 11 petition primarily to stay the sexual abuse actions until it could decide how best to resolve the litigation. Shortly after filing its petition, the debtor removed 127 of the proceedings to the bankruptcy court. See 28 U.S.C. S 1452(a). The debtor then proposed to pay the claims from a fund of $95 million -- an amount which the court found to be well below the average settlement for similar actions already resolved. In deciding what to do with the 127 proceedings, the bankruptcy court noted that, by removing the state court proceedings to the bankruptcy court, there were no longer any parallel proceedings pending in state court. Without parallel proceedings, said the court, discretionary abstention was unwarranted, if not impossible. The court further noted that, even if there were parallel proceedings in another forum, mandatory abstention was inapplicable because the actions were personal injury torts. See 28 U.S.C. S157(b)(5). Instead, the bankruptcy court determined that it should remand some of the actions back to state court based on several equitable grounds. 13 Thus, the court remanded 42 of the 127 actions to state court and would decide how to proceed with the remaining actions at a later time. The court, in a not-so-subtle-way, pointed out that abstention and remand are two distinct concepts which the debtor apparently did not appreciate.
13 Among the equitable grounds for remand: (1) issues of state law predominated; (2) no federal subject matter jurisdiction beyond section 1334's bankruptcy jurisdiction; (3) the actions were non-core proceedings;
