Goldstein v. Eby-Brown, Inc. (In Re Universal, Marketing, Inc.)
459 B.R. 573
Bankr. E.D. Pa.2011Background
- Trustee seeks to avoid pre-petition and post-petition transfers by Debtor to Eby-Brown.
- Defendant moves to dismiss the Complaint under Rule 12(b)(6) and 12(b)(1) for lack of jurisdiction.
- Court addresses whether it has subject matter jurisdiction over the § 544 fraudulent transfer claim.
- Complaint asserts a § 544 claim (incorporating PUFTA as applicable law) and § 549 avoidance; other claims are not asserted.
- Court dismisses the § 544 and § 549 claims as insufficiently pleaded, but grants leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy court has subject matter jurisdiction over § 544 claim | Trustee argues jurisdiction exists under 28 U.S.C. § 1334(b) and § 544 | Stern limits core jurisdiction; § 544 claim not properly within bankruptcy court's finality authority | Jurisdiction over § 544 claim exists as a related proceeding |
| Whether the § 544 claim is plausibly stated | PUFTA referenced for state-law standards; claims integrated into § 544 | Complaint fails to plead plausible § 544 claim | § 544 claim dismissed for failure to plead plausibly; leave to amend |
| Whether § 549 post-petition transfers are cognizable | Claims extend to post-petition transfers under § 549 | Complaint lacks sufficient facts for § 549 | § 549 claim dismissed as not plausibly pleaded |
| Whether Stern v. Marshall forecloses bankruptcy court jurisdiction over § 544 | Stern does not bar bankruptcy jurisdiction over § 544 | Stern undermines authority to decide core§ 544 claims | Stern does not deprive jurisdiction; § 544 remains within bankruptcy jurisdiction as a related proceeding |
| Whether the trustee should be given leave to amend | Amendment could cure pleading defects | No amendment should be allowed or limits apply | Leave to amend granted to attempt a viable § 544 claim |
Key Cases Cited
- Stern v. Marshall, 131 S. Ct. 2594 (2011) (core proceedings authority; final judgment without consent questioned)
- In re Mullarkey, 536 F.3d 215 (3d Cir. 2008) (core vs. non-core; subject matter jurisdiction unaffected)
- In re Seven Fields Dev. Corp., 505 F.3d 237 (3d Cir. 2007) (core/non-core distinction; relatedness to bankruptcy)
- Pacor v. Higgins, 743 F.2d 984 (3d Cir. 1984) (test for related proceedings under 28 U.S.C. § 1334(b))
- In re Hudson, 455 B.R. 648 (Bankr. W.D. Mich. 2011) ( § 544 claim is a federal bankruptcy cause of action; flows from statute)
- Granfinanciera v. Nordberg, 492 U.S. 33 (1989) (fraudulent conveyance claims; private rights vs. public rights)