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Civil Resource Manual 186. Reference Of Proceedings To The Bankruptcy Judges


Reference of Cases and Proceedings to the Bankruptcy Judges

1. Reference Orders
2. Core Proceedings
3. Non-core Proceedings
4. Core v. Non-Core Jurisdiction
5. Withdrawal of the Reference

 Bankruptcy judges "constitute a unit of the district court to be known as  the bankruptcy court" for each district.  28 U.S.C. § 151.  1.    Reference Orders  District courts are authorized, but not required, to refer to bankruptcy  judges cases under title 11, and proceedings arising under title 11, or  arising in or related to cases under title 11. 28 U.S.C. § 157(a).   Schulman v. Cal. Water Res. Control Bd. (In re Lazar), 200 B.R. 358,  366 (Bankr. C.D. Cal. 1996) (each district court is authorized to adopt  general order of reference for bankruptcy cases).  See Walls v.  Wells Fargo Bank, N.A., 255 B.R. 38 (E.D. Cal. 2000) (district court  exercising discretion not to refer claims involving FDCPA which might   require jury trial).    Bankruptcy judges may "hear and determine" -- i.e., enter final judgments in  --       a.    all cases under title 11;       b.    all "core proceedings" arising under title 11 or arising in a             case under title 11.  28 U.S.C. § 157(b)(1).  Absent consent of the parties, a bankruptcy judge may only "hear" (but not  determine) a proceeding that is not a core proceeding but that is otherwise  related to a bankruptcy case.  28 U.S.C. § 157(c)(1).  28 U.S.C. § 157 does not confer jurisdiction separate and apart from 28   U.S.C. § 1334.  Bass v. Denney (In re Bass), 171 F.3d 1016,  1025-26 (5th Cir. 1999) (holding that § 1334 does not confer  jurisdiction over action to enforce a non-dischargeable money judgment  against a bankruptcy debtor, and thus,   § 157 cannot confer  jurisdiction independently).   2. Core Proceedings.  28 U.S.C. § 157(b)(2)(A)-(O) provides examples of core proceedings  including but not limited to --       (A)   matters concerning the administration of the estate. See             Manville Corp. v. Equity Sec. Holders Comm. (In re             Johns-Manville Corp.), 801 F.2d 60 (2d Cir. 1986) (§ 105              action by debtor to enjoin equity security holders committee from              prosecuting state court action to require shareholders' meeting);              In re Mercado- Jiminez, 193 B.R. 112 (D.P.R. 1996) (motion              to vacate order dismissing bankruptcy case); In re Delta             Petroleum (P.R.), Ltd., 193 B.R. 99 (D.P.R. 1996)             (compensation of debtor's professionals); In re Res. Tech.             Corp., 254 B.R. 215 (Bankr. N.D. Ill. 2000) (assumption or             rejection of executory contract);       (B)   allowance or disallowance of claims against the estate or             exemptions from property of the estate, and estimation of claims             or interests for the purposes of confirming a plan of             reorganization but not the liquidation or estimation of             contingent or unliquidated personal injury tort or wrongful death              claims against the estate for purposes of distribution in a             bankruptcy case; see U.S. Abatement Corp. v. Mobil             Exploration & Producing U.S., Inc. (In re U.S. Abatement             Corp.), 79 F.3d 393 (5th Cir. 1996) (dispute over amount of             creditor's claim and recoupment rights is core proceeding);             S.G. Phillips Constructors, Inc. v. City of Burlington (In re             S.G. Phillips Constructors, Inc.), 45 F.3d 702, 705 (2d Cir.             1995) (determination of state claim against debtor); In re             Gurry, 253 B.R. 406 (Bankr. E.D. Va. 2000) (objection to             exemptions); In re Trident Shipworks, Inc., 247 B.R. 513             (Bankr. M.D. Fla. 2000) (claim estimation proceeding);       (C)   counterclaims by the estate against "persons" filing claims             against estate; see Lombard-Wall Inc. v. N.Y. City             Housing Dev. Corp. (In re Lombard-Wall Inc.), 48 B.R. 986             (S.D.N.Y. 1985); In re RBGSC Inv. Corp., 253 B.R. 369             (E.D. Pa. 2000); Colvard v. Gulf States Drilling Co. (In re             Bar M Petroleum Co.), 63 B.R. 343 (Bankr. W.D. Tex. 1986);             see also Katchen v. Landy, 382 U.S. 323 (1966).              But see Kamine/Besicorp Allegany, L.P. v. Rochester Gas              & Elec. Co. (In re Kamine/Besicorp Allegany, L.P.), 214 B.R.             953, 972 (Bankr. D.N.J. 1997) (subsequent filing of "protective"             or "defensive" proof of claim does not convert debtor's complaint              from non-core to core proceeding).  Note: 11 U.S.C. §             101(41) definition of "person" does not include "governmental             units";       (D)   orders in respect to obtaining credit;             (E)   orders to turn over property of the estate; see             McClatchey v. Ohio Pub. Employees Deferred Comp. Program (In             re Matheney), 138 B.R. 541 (Bankr. S.D. Ohio 1992); Fisher              v. Ins. Co. of Pa. (In re Pied Piper Casuals), Inc., 50 B.R.             549 (Bankr. S.D.N.Y. 1985).  But see Roddam v.             Metro Loans, Inc. (In re Roddam), 193 B.R. 971 (Bankr. N.D.             Ala. 1996) (unliquidated, disputed state law claim is non-core,             related to proceeding and not properly the subject of a turnover             order);       (F)   proceedings to determine, avoid or recover preferences;             see John E. Burns Drilling Co. v. Central Bank of             Denver, 739 F.2d 1489 (10th Cir. 1984); Country Junction,             Inc. v. Levi Strauss & Co. (In re Country Junction), Inc., 41              B.R. 425 (W.D. Tex. 1984), aff'd, 798 F.2d 1410 (5th Cir.             1986); Wechsler v. Squadron, Ellenoff, Plesent & Sheinfeld             L.L.P., 201 B.R. 635 (S.D.N.Y. 1996).  But see             Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989)             (suggesting that not all "core proceedings" are "public rights"             for purposes of Article III analysis);       (G)   motions to terminate, annul or modify the automatic stay;             Divane v. A & C Elec. Co., 193 B.R. 856 (N.D. Ill. 1996);       (H)   proceedings to determine, avoid, or recover fraudulent             conveyances; see Duck v. Munn (In re Mankin), 823             F.2d 1296 (9th Cir. 1987).  But see Granfinanciera,              supra;       (I)   determinations as to the dischargeability of particular debts;             LTV Steel Co. v. Union Carbide Corp. (In re Chateaugay             Corp.), 193 B.R. 669 (S.D.N.Y. 1996) (action to determine             dischargeability of CERCLA liability is "core" proceeding);             Martin v. Stoddard (In re Stoddard), 248 B.R. 111 (Bankr.             N.D. Ohio 2000); Fraley v. United States Dep't of Educ. (In re              Fraley), 247 B.R. 417 (Bankr. N.D. Ohio 2000)             (dischargeability of student loan debt);       (J)   objections to discharges; Wechsler v. Squadron, Ellenoff,             Plesent & Sheinfeld L.L.P., 201 B.R. 635 (S.D.N.Y. 1996);             French v. Miller (In re Miller), 247 B.R. 704 (Bankr. N.D.              Ohio 2000);        (K)   determinations of the validity, extent, or priority of liens;             see In re Weaver, 248 B.R. 106 (Bankr. N.D. Ohio             2000); Diversified Mortgage Co. v. Gold (In re Gold), 247             B.R. 574 (Bankr. D. Mass. 2000); In re Sims, 181 B.R. 125,              127 n.2 (Bankr. N.D. Ala. 1995) (only applies to liens on             property of the estate);       (L)   confirmations of plans;             (M)   orders approving the use or lease of property, including the use             of cash collateral;       (N)   orders approving the sale of property other than property             resulting from claims brought by the estate against persons who             have not filed claims against the estate; and       (O)   other proceedings affecting the liquidation of the assets of the             estate or the adjustment of the debtor-creditor or the equity             security holder relationship, except personal injury tort or             wrongful death claims;  see St. Clare's Hosp. & Health             Ctr. v. Ins. Co. of N. Am. (In re St. Clare's Hosp. & Health Care              Ctr.), 934 F.2d 15 (2d Cir. 1991) (action for declaratory             judgment that insurer was obligated to defend medical malpractice              action); Kirk v. Hendon (In re Heinsohn), 247 B.R. 237             (E.D. Tenn. 2000) (proceeding is "core" if it invokes substantive              right provided by title 11 or if it is a proceeding that, by its             nature, could arise only in the context of bankruptcy); Artra             Group, Inc. v. Salomon Bros. Holding Co. (In re Emerald             Acquisition Corp.), 170 B.R. 632 (Bankr. N.D. Ill. 1994)             ("core" matters are ones with which bankruptcy court has greater             familiarity and expertise than the district court); New Magma             Irrigation & Drainage Dist. v. Bd. of Supervisors (In re New             Magma Irrigation & Drainage Dist.), 193 B.R. 528 (Bankr. D.             Ariz. 1994) ("catch-all" definitions of core proceedings should             be relied on with great care and caution).         3.  Non-core Proceedings.       a.    A non-core proceeding has a "life of its own in either state or             federal common law or statute independent of the federal             bankruptcy laws."  Salomon v. Kaiser (In re Kaiser), 722             F.2d 1574, 1582 (2d Cir. 1983); Wechsler v. Squadron,             Ellenoff, Plesent & Sheinfeld L.L.P., 201 B.R. 635 (S.D.N.Y.             1996) (non-core matters are those in which the district court is             more proficient than the bankruptcy court); Bethlahmy, IRA v.             Kuhlman (In re ACI-HDT Supply Co.), 205 B.R. 231 (B.A.P. 9th             Cir. 1997); Scotland Guard Servs. v. Autoridad de Energia             Electrica (In re Scotland Guard Servs., Inc.), 179 B.R. 764             (Bankr. D.P.R. 1993) (non-core proceedings, where the action             "would survive outside of bankruptcy," include causes of action             by the debtor against a third-party based on non-bankruptcy law).       b.    In non-core proceedings, absent consent, the bankruptcy judge is             limited to submitting proposed findings of fact and conclusions             of law to the district court.  28 U.S.C. § 157(c)(1).  A             final order or judgment is entered by the district judge after             considering the proposed findings and conclusions and reviewing             de novo those matters to which any party has timely              (i.e., within 10 days of service of proposed findings and             conclusions) and specifically objected.  28 U.S.C. §             157(c)(1); Fed. R. Bankr. P. 9033; see McFarland v.             Leyh (In re Tex. Gen. Petroleum Corp.), 52 F.3d 1330, 1337             (5th Cir. 1995) (district court must review bankruptcy court's             judgment de novo); Moody v. Amoco Oil Co., 734 F.2d 1200             (7th Cir. 1984) (new trial not required; record should be             examined without giving deference to proposed factual findings).         4. Core v. Non-Core Jurisdiction.       a.    Parties may consent to trial and entry of final orders by             bankruptcy judge, whether proceeding is core or non-core. In an             adversary proceeding, the complaint, counterclaim, cross-claim,             or third party complaint must state whether the proceeding is             core or non-core and, if non-core, whether party consents to             entry of final order by bankruptcy judge. Fed. R. Bankr. P.             7008(a).  Responsive pleading must do likewise.  Fed. R. Bankr.             P. 7012(b).  See generally McFarland v. Leyh (In re             Tex. Gen. Petroleum Corp.), 52 F.3d at 1337 ("A party who             fails to object to bankruptcy court's assumption of core             jurisdiction consents to that court's entry of final judgment.");              Plaza at Latham Assocs. v. Citicorp N. Am., Inc., 150 B.R.              507 (N.D.N.Y. 1993).        b.   The distinction between core and non-core is often difficult to             discern.  See In re United States Brass Corp., 110             F.3d 1261, 1268-69 (7th Cir. 1997) (impact of claim on estate             showed it was "related to" the case and, thus, a non-core             proceeding, rather than core). See generally Houbigant,              Inc. v. ACB Mercantile, Inc. (In re Houbigant, Inc.), 185             B.R. 680 (S.D.N.Y. 1995) (proceeding is core`if it invokes a             substantive right provided by the Bankruptcy Code or by nature             could arise only in the context of a bankruptcy case); Chiang             v. Barclays Bank, PLC (In re Caledonia Springs, Inc.), 185             B.R. 712 (D.V.I. 1995) (proceedings integral to restructuring             debtor-creditor rights and postpetition activities are core             proceedings); Hudgins v. Shah (In re Sys. Eng'g & Energy Mgmt.              Assocs., Inc., 252 B.R. 635 (Bankr. E.D. Va. 2000) (among             factors that court may consider in deciding whether claim is             "core" or "non-core" matter are the following: (1) whether claim             is not specifically identified as "core" matter in jurisdictional              provision; (2) whether claim existed prepetition; (3) whether             claim would continue to exist independent of provisions of title             11; and (4) whether parties' rights, obligations, or both are             significantly affected as result of debtor's bankruptcy filing).             Compare Beard v. Braunstein, 914 F.2d 434, 443-45             (3d Cir. 1990) (proceeding based on claims of pre- and             postpetition breaches of prepetition contract non-core), Ralls              v. Docktor Pet Ctrs., Inc., 177 B.R. 420 (D. Mass. 1995)             (debtor's suit to recover claims on a prepetition breach of             contract is "entirely non-core matter"), Aristera C. v. Chaney              (In re Aristera Co.), 65 B.R. 928 (Bankr. N.D. Tex. 1986),             and Atlas Automation, Inc. v. Jensen, Inc. (In re Atlas              Automation, Inc.), 42 B.R. 246 (Bankr. E.D. Mich. 1984)             (collection of prepetition accounts receivable found not to be             core proceeding) with Sacred Heart Hosp. of Norristown             v. Independence Blue Cross (In re Sacred Heart Hosp. of             Norristown), 181 B.R. 195, 202 (Bankr. E.D. Pa. 1995)             (proceedings raising claims of postpetition breaches of             prepetition contracts are core).  See generally             "Action for Breach of Contract As Core Proceeding in Bankruptcy             Under 28 U.S.C. § 157(b)," 123 A.L.R. Fed. 103 (1995 and             Supp. 2000).             c.    The determination of whether a case is core or non-core is made             by the bankruptcy judge.  In re Treco, 205 B.R. 358             (S.D.N.Y. 1997).       d.    Where a proceeding presents a mix of core and non-core claims,             the bankruptcy court must perform a claim-by-claim analysis to             determine the extent of its jurisdiction. Halper v.             Halper, 164 F.3d 830, 838-40 (3d Cir. 1999).  However, some             courts would hold that an entire proceeding is core if its core             aspects heavily predominate. Id. at 839 (citing cases).   5. Withdrawal of the Reference.        a.    Mandatory Withdrawal.              District courts are required to withdraw the reference upon  timely             motion "if the court determines that resolution of the  proceeding             requires consideration of both title 11 and other laws of the             United States regulating organizations or activities affecting             interstate commerce."  28 U.S.C. § 157(d); see             Educ. Credit Mgmt. Corp. v. Barnes, 259 B.R. 328 (S.D.  Ind.             2001) (district court was compelled to withdraw reference where             trustee's objection to student loan creditor's claim challenged             the constitutionality of 34 C.F.R. § 682.410(b)(2),  pursuant             to which disputed collection costs in the claim were imposed);             S. Pac. Transp. Co. v. Voluntary Purchasing Group, Inc.,             252 B.R. 373 (E.D. Tex. 2000) (bankruptcy court lacked             jurisdiction, as part of chapter 11 plan confirmation process,  to             approve and then issue mandatory injunctions implementing the             debtor's settlement with State of CERCLA claims because such a             decision necessarily involved the substantial and material             consideration of Federal law regulating interstate commerce  within             the meaning of 28 U.S.C. § 157(d)); In re E & S             Facilities, Inc., 181 B.R. 369, 372 (S.D. Ind. 1995)             (withdrawal requires either (1) complicated issues of first             impression requiring significant interpretation of Federal law,  or             (2) substantial and material conflicts between the Bankruptcy  Code             and non-title 11 laws), aff'd, 96 F.3d 949 (7th Cir.  1996);             In re Horizon Air, Inc., 156 B.R. 369 (N.D.N.Y. 1993);             Contemporary Lithographers, Inc. v. Hibbert (In re  Contemporary             Lithographers, Inc.), 127 B.R. 122 (M.D.N.C. 1991)  (withdrawal             mandatory if proceeding presents non-bankruptcy Federal question             (here, alleged violations of Federal securities laws) which will             affect outcome of bankruptcy proceeding); Block v. Anthony             Tammaro, Inc. (In re Anthony Tammaro, Inc.), 56 B.R. 999             (D.N.J. 1986) (legislative history).  But see PBGC v.             Cont'l Airlines, Inc. (In re Cont'l Airlines, Inc.), 138  B.R.             442 (D. Del. 1992) (where court could decide case without  reaching             non-bankruptcy ERISA issue, withdrawal was not mandatory).              (1)   Most courts hold that withdrawal is mandatory only if                    "substantial and material consideration" of non-Code                    Federal statute is necessary to resolve proceeding.                    See, e.g., United Nat'l Ins. Co. v. Vicars Ins.                    Agency (In re Vicars Ins. Agency), 96 F.3d 949 (7th                    Cir. 1996); LTV Steel Co. v. Union Carbide Corp. (In re                     Chateaugay Corp.), 193 B.R. 669 (S.D.N.Y. 1996)                    (withdrawal of reference not required if consideration of                    non-Code law entails straightforward application of                    settled law to facts of particular case, but is required                    when the court will be called upon to make significant                    interpretation of non-Code statute, when non-Code issues                    dominate Code issues, or when the non-bankruptcy Federal                    law that governs the case significantly and materially                    conflicts with the relevant bankruptcy provisions);                    C-TC 9th Ave. P'ship v. Norton Co. (In re C-TC 9th Ave.                     P'ship), 177 B.R. 760 (N.D.N.Y. 1995) (withdrawal                    mandatory only where the resolution of the claims will                    require substantial and material consideration of non-Code                     statutes which have more than a de minimis impact on                    interstate commerce.); In re Philadelphia Training Ctr.                     Corp., 155 B.R. 109 (E.D. Pa. 1993) (mandatory                    withdrawal not required by mere assertion that claim may                    arise under nonbankruptcy Federal statute, by incidental                    need to consider nonbankruptcy law, where only routine                    application of established legal standards is required, or                     where need to apply and interpret nonbankruptcy law to                    resolve proceeding is unclear); Am. Body Armor &                    Equip., Inc. v. Clark (In re Am. Body Armor & Equip.,                    Inc.), 155 B.R. 588 (M.D. Fla. 1993) (mandatory                    withdrawal only for cases of first impression or where                    "substantial and material conflicts" exist between                    Bankruptcy Code and other Federal law); Wittes v.                    Interco, Inc., 137 B.R. 328 (E.D. Mo. 1992) (where                    issues required no more than "straightforward                    application," and not significant interpretation of ADEA,                    reference not withdrawn).              (2)   Some courts have declined to interpret  § 157(d)                    literally and have withdrawn the reference even though                    only consideration of non-Code Federal statute was                    required.  See Contemporary Lithographers, Inc.                    v. Hibbert (In re Contemporary Lithographers, Inc.),                    127 B.R. 122 (M.D.N.C. 1991).  But see                    Brizendine v. Montgomery Ward & Co., 143 B.R. 877                    (N.D. Ill. 1992) (where adversary proceeding to collect                    freight undercharges required consideration of Interstate                    Commerce Act but not of Bankruptcy Code, withdrawal of                    reference not required).              (3)   What qualifies as non-bankruptcy Federal statute                    regulating interstate commerce?  See Camden                    Ordnance Mfg. Co. of Ark. v. United States Trustee (In re                    Camden Ordnance Mfg. Co.), 245 B.R. 794, 806 (E.D. Pa.                     2000) (consideration of U.S. Constitution could mandate                    withdrawal); see also S. Pac. Transp. Co. v.                    Voluntary Purchasing Groups, Inc., 252 B.R. 373 (E.D.                    Tex. 2000) (CERCLA is statute regulating interstate                    commerce);  In re Coe-Truman Techs, Inc., 214 B.R.                    183 (N.D. Ill. 1997) (Tucker Act not a law of the U.S.                    regulating organizations or activities affecting                    interstate commerce; however, discretionary withdrawal was                     appropriate because proceeding was non-core).        b.    Permissive Withdrawal.              (1)   The district court may, but is not required to withdraw                    partially or totally a case referred to the bankruptcy                    court, upon its own motion or upon timely motion of a                    party, for cause shown.  28 U.S.C. § 157(d).                (2)   Considerations include: (1) uniformity in bankruptcy                    administration; (2) reduction of forum shopping and                    confusion; (3) fostering economical use of debtors' and                    creditors' resources; and (4) expediting the bankruptcy                    process.  See In re Pruitt, 910 F.2d 1160                    (3d Cir. 1990); see also Keystone Oncology, LLC                    v. Cohen (In re Equimed, Inc.), 259 B.R. 269, 273 (D.                    Md. 2001) (additional factor: equitable issues are posed,                    not requiring a jury trial, but falling within the                    traditional equitable powers of a bankruptcy judge);                    compare Hassett v. BancOhio Nat'l Bank (In re                    CIS Corp.), 172 B.R. 748 (S.D.N.Y. 1994)                    (comprehensive discussion of standards for deciding motion                     to withdraw the reference; cause established for                    permissive withdrawal where the matter is not core and                    creditor demands jury trial), Carmel v. Galam (In re                    Larry's Apartment, L.L.C.), 210 B.R. 469 (D. Ariz.                    1997) (withdrawal not warranted where no showing of right                    to jury trial), Wechsler v. Squadron, Ellenoff, Plesent                     & Sheinfeld L.L.P., 201 B.R. 635 (S.D.N.Y. 1996),                    Zahn v. Yucaipa Capital Fund (In re Almac's Inc.),                    202 B.R. 648 (D.R.I. 1996), and Big Rivers Elec.                     Corp. v. Green River Coal Co., 182 B.R. 751 (W.D. Ky.                    1995) (concerns of judicial economy warranted withdrawing                    the reference of an adversary proceeding against the                    debtor-coal company, regarding the validity of a coal                    supply contract, where the bankruptcy proceeding involved                    common issues of law and fact with another case pending in                     the district court) with Ponce Marine Farm, Inc.                     v. Browner (In re Ponce Marine Farm, Inc.), 172 B.R.                    722 (D.P.R. 1994) (court denies EPA's motion to withdraw                    the reference in matter concerning the Clean Water Act                    where EPA waited over a year to bring motion, court was                    familiar with the issues, and withdrawal would place an                    "unnecessary burden" on the debtor), and United                    States v. Kaplan, 146 B.R. 500 (D. Mass. 1992)                    (discretionary withdrawal requires truly exceptional and                    compelling circumstances).              (3)   Eleventh Circuit has held that district court may withdraw                     reference only for cause once bankruptcy court has assumed                     jurisdiction.  Dionne v. Simmons (In re Simmons),                    200 F.3d 738, 741 (11th Cir. 2000).  However, the                    constitutionality of bankruptcy jurisdiction may hinge                    upon the district courts' ability to control bankruptcy                    proceedings in their discretion at any stage.  See                    Land-O-Sun Dairies, Inc. v. Fla. Supermarkets, Inc. (In                     re Finevest Foods, Inc.), 143 B.R. 964, 968 (Bankr.                    M.D. Fla. 1992).                     Authority to withdraw applies to both core and non-core                   proceedings.  See Holland Am. Ins. Co. v.                   Succession of Roy, 777 F.2d 992 (5th Cir. 1985);                   Wechsler v. Squadron, Ellenoff, Plesent & Sheinfeld                   L.L.P., 201 B.R. 635 (S.D.N.Y. 1996); Zahn v.  Yucaipa                   Capital Fund (In re Almac's Inc.), 202 B.R. 648  (D.R.I.                   1996); United States v. ILCO, Inc. (In re ILCO,                   Inc.), 48 B.R. 1016, 1020 (N.D. Ala. 1985); In re                   White Motor Co., 42 B.R. 693 (N.D. Ohio 1984).  Which                   court determines core status is subject to controversy.                    Compare In re Orion Pictures Corp., 4 F.3d                   1095, 1101 (2d Cir. 1993) (district court determines)                   with Mellon Bank v. Del. & Hudson Ry. (In re  Del.                   & Hudson Ry.), 122 B.R. 887, 892 (D. Del. 1991)                   (bankruptcy court determines core/non-core status).                    Where is motion to withdraw filed?  Compare                   Morse Elec. Co. v. Logicon, Inc. (In re Morse Elec.                   Co.), 47 B.R. 234, 236 (Bankr. N.D. Ind. 1985)  (district                   court) with Fisher v. Ins. Co. of Pa. (In re  Pied                   Piper Casuals, Inc.), 48 B.R. 294 (S.D.N.Y. 1985)                   (bankruptcy court).  See Fed. R. Bankr. P. 5011(a)                   (heard by district court).  Procedure may vary according  to                   local rules.  E.g., District of Kansas Rule 706                   (filed in bankruptcy court, heard in district court after                   bankruptcy judge forwards to district court with                   recommendation); N.D. California Rule 700-4 (filed, heard  in                   district court, copy filed in bankruptcy court).   See                   Walton v. AG Credit (In re Walton), 158 B.R. 939                   (Bankr. N.D. Ohio 1993) (court may consider mandatory                   withdrawal of reference sua sponte).                    When must motion to withdraw be filed: "In timely                   fashion" requires filing at the first reasonable  opportunity                   as indicated by facts of the case.  Zahn v. Yucaipa                   Capital Fund (In re Almac's Inc.), 202 B.R. 648  (D.R.I.                   1996) (motion to withdraw filed 60 days after complaint                   deemed timely where no material event had taken place in  the                   case); In re Chateaugay Corp., 104 B.R. 622  (S.D.N.Y.                   1989); see Consol. Indus. Corp. v. Welbilt  Holding                   Co., 254 B.R. 237 (N.D. Ind. 2000) (motion to withdraw                   reference untimely when filed 5 weeks after jury demand,                   when local rule required its filing simultaneously with  jury                   demand); Lone Star Indus. v. Rankin County Econ. Dev.                   Dist. (In re N.Y. Trap Rock Corp.), 158 B.R. 574                   (S.D.N.Y. 1993) (motion to withdraw reference denied where                   untimely and filed for forum shopping purposes);  Met-Al,                   Inc. v. Hanson Storage Co., 157 B.R. 993 (E.D. Wis.                   1993) (motion timely when filed five days after filing of                   amended complaint first alleging Federal statutory claim);                   In re Oil Co., 140 B.R. 30 (E.D.N.Y. 1992) (motion                   filed six weeks after proceeding commenced was timely).   In                   some jurisdictions, local rules set specific time limits  on                   motions to withdraw reference although the validity of  such                   rules is questionable inasmuch as the statute permits                   "timely" motion.  Also, the timeliness requirement does  not                   apply to the district court's power to withdraw sua                   sponte.  See Danning v. Lummis (In re Tom                   Carter Enters., Inc.), 44 B.R. 605 (C.D. Cal. 1984)                   (district court may withdraw reference any time up to  final                   judgment of bankruptcy court).                    Order granting or denying motion to withdraw reference is                   not a final, appealable order.  Abney v. Kissel Co. (In                   re Kissel Co.), 105 F.3d 1324 (9th Cir. 1997).  On                   appeal, district court's decision is entitled to great                   deference.  Taxel v. Elec. Sports Research (In re                   Cinematronics, Inc.), 916 F.2d 1444 (9th Cir. 1990);                   Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d                   992, 998 (5th Cir. 1985).                    A district court sitting as an appellate court cannot                   conduct a jury trial but can order the reference withdrawn                   so that it can conduct the jury trial in its original                   jurisdiction in bankruptcy.  Glannon v. Carpenter (In  re                   Glannon), 245 B.R. 882, 892 (D. Kan. 2000); see                   also E. Equip. & Servs. Corp. v. Factory Point  Nat'l                   Bank, 236 F.3d 117, 121 (2d Cir. 2001) (sitting as                   appellate court, district court lacks jurisdiction to hear                   complaint alleging violations of automatic stay).
Updated February 19, 2015