In re American Housing Foundation
469 B.R. 257
Bankr. N.D. Tex.2012Background
- Omnibus memorandum addresses 37 motions in 20 adversary proceedings seeking dismissal of bankruptcy-based claims under Stern v. Marshall.
- Motions target fraudulent transfer actions under §548 and state-law equivalents via §544 and preference actions under §547.
- Many defendants are not claims-filing creditors in the underlying AHF bankruptcy and do not consent to this Court hearing the actions.
- Walter O’Cheskey, the plaintiff-trustee, is a liquidating-trustee assigned rights of a bankruptcy trustee for the AHF estate.
- Court acknowledges Stem tests the outer boundaries of the bankruptcy system but holds Stem does not require dismissal of the trustee’s claims.
- The opinion analyzes whether Stem’s constitutional concerns compel dismissal or permit non-final rulings, with Addendum A listing the adversaries involved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Stem require dismissal of the trustee's fraudulent transfer and preference claims? | O’Cheskey argues Stem does not mandate dismissal where claims are core under §157. | Greystone et al. contend Stem renders final disposition by the bankruptcy court unconstitutional and requires dismissal. | Stem does not require dismissal; proposed findings may be issued. |
| May the bankruptcy court issue proposed findings and conclusions on core proceedings despite Stem’s constitutional concerns? | O’Cheskey contends court can hear and issue non-binding findings subject to de novo review. | Defendants argue Stem forecloses any non-final disposition on core matters. | Court may issue proposed findings of fact and conclusions of law; not required to dismiss. |
| How do §157(b)(1) and §157(c)(1) interplay with Stem regarding core vs related-to proceedings? | Court can manage core proceedings and provide findings; related-to proceedings may be referred for de novo review. | Statutory text forecloses non-binding outputs on core matters and mandates final disposition by Article III courts. | Text allows discretion to issue proposed findings on core matters; Stem’s holding does not foreclose this division of labor. |
Key Cases Cited
- Stern v. Marshall, 131 S. Ct. 2594 (2011) (confronts Article III power in bankruptcy proceedings and finality of judgments)
- Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50 (1982) (public rights and delegation of adjudicatory power)
- Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) (fraudulent conveyance not within public rights exception)
- Katchen v. Landy, 382 U.S. 323 (1966) (preference claims may be heard in bankruptcy if integral to debt restructuring)
- Langenkamp v. Culp, 498 U.S. 42 (1990) (consent and bankruptcy claim procedures in adjudication)
- Murray's Lessee v. Hoboken Land & Improvement Co., 59 U.S. 272 (1856) (public rights doctrine origins)
- Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833 (1986) (public rights and adjudicatory powers in specialized tribunals)