453 B.R. 832
Bankr. S.D. Ohio2011Background
- Debtor George A. Bavelis filed Chapter 11 in SD Ohio on July 20, 2010; assets include a Columbus Fifth Third brokerage account valued around $11–13 million and Ohio real property (~$435k).
- Estate total value exceeds $19 million, with additional assets located outside SD Ohio.
- Adversary asserts Bankruptcy Code claims under §§ 544(b), 548, 550, and 551 for avoidance/recovery of 2009 transfers (March and December 2009) and related‑to/obstacle claims; Florida law state-law counts also asserted.
- Defendants include Mahammad Qureshi, Masroor Rab, Ted Doukas, and affiliated Florida entities (FLS, FLOVEST, BMAQ, GMAQ, BNK, MAQ Management, etc.); Doukas allegedly used Nemesis to obtain an interest in Bavelis‑Qureshi LLCs and transfer assets.
- The 2009 Transfers allegedly diverted assets from Bavelis‑Qureshi LLCs to other entities, increasing Debtor’s exposure on guarantees; Debtor alleges fraudulent transfers/obligations.
- Florida lawsuits (Dissolution and Specific Performance) and a New York removal/Proceeding regarding Quick Capital Note are referenced as related while the bankruptcy case is pending in Ohio.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction over Bankruptcy Law Counts and State Law Counts | Debtor asserts core jurisdiction for Bankruptcy Counts; related‑to for State Counts. | Defendants argue lack of basis for federal jurisdiction over certain counts. | Court holds Bankruptcy Law Counts are core; State Law Counts are non‑core but related‑to; jurisdiction exists over all counts. |
| Personal jurisdiction over Qureshi Defendants | Service and nationwide jurisdiction under Bankruptcy Rule 7004(f) confer jurisdiction. | Non‑residents lack minimum contacts with Ohio; service flawed. | Personal jurisdiction exists once proper nationwide service is perfected; insufficiency of process/ service unresolved only if summons corrected within 30 days. |
| Venue in SD Ohio | Debtor’s SD Ohio venue is proper due to debtor’s case location and principal assets in district. | Venue should be Florida/other districts due to connections. | Venue proper in SD Ohio; Debtor’s case remains in SD Ohio; no need for transfer. |
| Transfer of the adversary proceeding | Keeping in Ohio best serves estate administration; transfer unnecessary. | Transfer to Florida or NY could be more appropriate for related claims. | Transfers denied; factors weigh against transfer; proceeding remains in SD Ohio. |
| Mandatory and Permissive Abstention; Equitable Remand | Abstention/remand unnecessary; core matters in bankruptcy predominate. | Abstention/remand could be appropriate due to state-law issues and related Florida/New York actions. | Mandatory abstention rejected; permissive abstention rejected; equitable remand not warranted. |
Key Cases Cited
- Wolverine Radio Co. v. Wolverine Radio Co., 930 F.2d 1132 (6th Cir. 1991) (arising-under/arising-in distinction for jurisdiction)
- Pacor, Inc. v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test for related-to jurisdiction: potential effect on estate)
- Bliss Techs., Inc. v. HMI Indus., Inc., 307 B.R. 598 (Bankr. E.D. Mich. 2004) (state-law impact but core bankruptcy action can be core)
- In re Nat'l Century Fin. Enters., Inc., 312 B.R. 344 (Bankr. S.D. Ohio 2004) (discussion of abstention and related‑to vs core matters)