Liberty Mutual Insurance Company v. Hopeman Brothers, Inc.

             IN THE UNITED STATES DISTRICT COURT 
             FOR THE EASTERN DISTRICT OF VIRGINIA 
                         Richmond Division 
LIBERTY MUTUAL INSURANCE                                             . 
COMPANY, 
Plaintiff, 
v.                                           Civil Action No. 3:25cv603 (DJN) 
HOPEMAN BROTHERS, INC., et al., 
Defendants. 

                     MEMORANDUM ORDER 
               (Adopting Report and Recommendation) 
In this action, Movant Liberty Mutual Insurance Company (“Liberty Mutual”) asks this 
Court to withdraw the reference with respect to an adversary proceeding filed by Liberty Mutual 
against Hopeman Brothers, Inc. (“Hopeman”) and various creditors and claimants (Adv. Pro. No. 
25-03020-KLP (“Proceeding”)).  This matter comes before the Court on Respondent Official 
Committee of Unsecured Creditors of Hopeman Brothers, Inc.’s (the “Committee”) Objection! 
(ECF No. 5 (“Objection” or Obj.”)) to the Report and Recommendation submitted by United 
States Bankruptcy Judge Keith L. Phillips on August 29, 2025, (ECF No. 9 (the “R&R”)), which 
recommends that the Court grant Liberty Mutual’s Motion to Withdraw the Reference (ECF No. 
1 (“Motion”)).  For the reasons set forth below, the Court OVERRULES the Committee’s 
Objection (ECF No. 5), GRANTS Liberty Mutual’s Motion to Withdraw the Reference (ECF 
No. 1) and ADOPTS the Report and Recommendation of the Bankruptcy Judge (ECF No. 9). 

|      Several groups of claimants named as defendants in the underlying adversary proceeding 
have filed joinder notices, whereby these defendants have joined in, adopted and incorporated by 
reference the Committee’s Objection currently before the Court.  (ECF Nos. 6, 7.) 

                       I.     BACKGROUND 
This action stems from the Chapter 11 bankruptcy proceedings of Hopeman Brothers, 
Inc.,  a company that provided marine joiner services for shipbuilders.  (ECF No. 1-2 at 18-195) 
In re Hopeman, Case No. 24-32428 (Bankr. E.D. Va. June 30, 2024).  In the present adversary 
proceeding, Plaintiff Liberty Mutual, which provided different types of asbestos-related 
insurance policies to Hopeman, seeks a declaratory judgment that a 2003 settlement agreement 
between itself and Hopeman extinguished any further obligations in conjunction with asbestos- 
related claims arising from Hopeman’s past actions or omissions.”  (R&R at 2-4.) 
Liberty Mutual filed the instant Motion on May 23, 2025.  (ECF No. 1.)  Hopeman, the 
Committee, Huntington Ingalls Industries, Inc., Marla Rosoff Eskin, Esq. (in her capacity as the 
future claimants’ representative) and certain other claimants each filed objections to the Motion. 
(ECF No. 1-2 at 37-70.)  Liberty Mutual filed its omnibus reply to these objections on July 21, 
2025.  (Id. at 72-89.) 
This matter was reassigned to the undersigned on August 6, 2025.  (ECF No. 3.)  The 
Court subsequently referred Liberty Mutual’s Motion to United States Bankruptcy Judge Keith 
L. Phillips for proposed findings of fact and conclusions of law.  (ECF No. 4.) 
On August 29, 2025, Judge Phillips entered his R&R, in which he recommends that the 
Court grant Liberty Mutual’s Motion and withdraw the reference as to the underlying adversary 
proceeding.  (ECF No. 9.)  On September 12, 2025, the Committee filed its Objection.  (ECF No. 
5 “Objection” or “Obj.”).)  Liberty Mutual filed a response to the Committee’s Objection on 

2      For a more detailed account of the underlying facts, the Court refers the reader to Judge 
Phillips’s Report.  (R&R at 2-4.)

September 26, 2025, (ECF No. 10), and the Committee filed a reply on October 2, 2025, (ECF 
No. 11), rendering the R&R and the Objection ripe for the Court’s review. 
                     Il.     LEGAL STANDARD 
Federal district courts exercise “original and exclusive jurisdiction of all cases” under the 
Bankruptcy Code.  

28 U.S.C. § 1334

(a).  District courts may refer all bankruptcy matters to 
bankruptcy judges, which this District has done as a matter of course since 1984.  

28 U.S.C. § 157

(a); see In the Matter of: The Administration of the Bankruptcy Courts and Reference of 
Bankruptcy Cases and Proceedings to the Bankruptcy Judges of this District (E.D, Va. Aug. 15, 
1984) (Standing Order referring all bankruptcy matters to Bankruptcy Court).  However, district 
courts may, and sometimes must, withdraw the reference of such proceedings in whole or part. 

28 U.S.C. § 157

(d).  “Bankruptcy law provides two avenues by which a  district court can order a 

case withdrawn from the bankruptcy court:  mandatory withdrawal or permissive withdrawal.” 
Shaia v. Malone, 

2017 WL 4203544

, at *3 (E.D. Va. Sept. 21, 2017) (citing 

28 U.S.C. § 157

(d)). 
The district court must withdraw the reference when “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).  Alternatively, the district court 

may withdraw the reference for “cause shown.”  /d.  A party moving the district court to 
withdraw a matter filed in an underlying bankruptcy action bears the burden of demonstrating the 
appropriateness of withdrawal — whether mandatory or discretionary.  TRU Creditor Litig. Tr. 
v, Brandon, 

2022 WL 1494718

, at *4 (E.D. Va. May 11, 2022). 
While 

28 U.S.C. § 157

(d) allows discretionary withdrawal “for cause shown,” the statute 
does not define “cause.”  

28 U.S.C. § 157

(d).  Courts in this district weigh six factors in

determining whether cause exists to withdraw the reference.  TRU Creditor Litig. Tr., 

2022 WL 1494718

 at *4.  These factors include: 
(i)     whether the proceeding is core or non-core; 
(ii)    the uniform administration of bankruptcy proceedings; 
(iii)  | expediting the bankruptcy process and promoting judicial economy; 
(iv)    the efficient use of debtors’ and creditors’ resources; 
(v)    the reduction of forum shopping; and 
(vi)    the preservation of a right to a jury trial. 

Id.

  Although some courts place great weight on the core / non-core factor, “[t]he better view is 
that discretionary withdrawal of reference should be determined on a case-by-case basis by 
weighing all the factors presented in a particular case, including the core/non-core distinction.” 
Shaia, 

2017 WL 4203544

 at *4 (internal quotations omitted).  If the district court determines that 
the balance of factors indicates that the interests of justice and judicial economy favor litigation 
in the district court, the district court should exercise its discretionary power of withdrawal.  TRU 
Creditor Litig. Tr., 

2022 WL 1494718

 at *5; see also Chesapeake Tr. v. Chesapeake Bay Enters., 
Inc., 

2014 WL 202028

, at *4 (E.D. Va. Jan. 17, 2014) (same). 
Federal Bankruptcy Rule 9033(c) sets forth the standard for this Court to apply when 
reviewing objections to  a Bankruptcy Court’s proposed findings of fact and conclusions of law. 
Under that rule, the district judge “must review de novo — on the record or after receiving 
additional evidence — any part of the bankruptcy judge’s findings of fact or conclusions of law 
to which specific written objection has been made [in accordance with this rule].”  Fed. R. 
Bankr. P. 9033(c)(1).  Upon such review, the Court “may accept, reject, or modify the proposed 
findings of fact or conclusions of law, take additional evidence, or remand the matter to the 
bankruptcy judge with instructions.”  Fed. R. Bankr. P. 9033(c)(2).

                         Il.    ANALYSIS 
The Committee raises four objections to Judge Phillips’s R&R and its assessment of the 
relevant factors concerning “cause” for withdrawal.  First, the Committee argues that Judge 
Phillips’s finding that “[n]o party contests that the Adversary Proceeding concerns a non-core 
claim” is incorrect, since the Committee disputes the Court’s subject matter jurisdiction over the 
underlying proceeding.  (Obj. at 6-8.°)  Relatedly, the Committee also objects to Judge Philips’s 
finding that the non-core claim at issue here weighs in favor of withdrawal.  (/d.)  Second, the 
Committee argues that Judge Phillips’s analysis of the jury trial factor was incorrect on two 
fronts:  both as to (1) his overall finding that this factor remained “neutral” in his analysis, since 
in the Committee’s telling, any “neutral” factor should actually weigh against Liberty Mutual’s 
Motion, and (2) his finding that the jury trial factor was premature and did not weigh in favor of 
or against withdrawal at this point, when, in the Committee’s view, the Bankruptcy Court’s 
ability to continue managing pre-trial matters before the proceeding becomes “trial ready” 
actually weighs against withdrawal.  (/d. at 8-9.)  Third, the Committee disagrees with Judge 
Phillips’s finding that the forum-shopping factor should also be considered “neutral,” since one 
defendant did, in fact, allege forum shopping, and since Liberty Mutual has not met its burden to 
show that withdrawal of the reference would discourage forum shopping.  (/d. at 10-11.)  And 
finally, the Committee argues that Judge Phillips incorrectly assessed the remaining factors (the 
uniform administration of bankruptcy proceedings, judicial economy and efficient use of debtor 
and creditor resources) as either neutral or weighing in favor of withdrawal, since the 
Bankruptcy Court “is up to speed and has the comprehensive perspective to [uniformly] 

3      The Court employs the pagination assigned to all filings by the CM/ECF system.

administer” the proceedings, and since all pending motions to dismiss have already been fully 
briefed and argued before that court.  (/d. at 11-13.) 
Following de novo review of Liberty Mutual’s Motion and the relevant filings by all 
parties, and for the reasons set forth below, the Court accepts Judge Phillips’s R&R and 
overrules the Committee’s objections. 
The Court begins by addressing the Committee’s somewhat puzzling argument, presented 
repeatedly throughout its filings and specifically underpinning several of its objections to Judge 
Phillips’s findings, that a finding of “neutral” on any given factor in the court’s withdrawal 
analysis actually weighs against granting Liberty Mutual’s Motion.  The Committee’s assertion 

appears to rest on its (correct) statement that Liberty Mutual, as movant, bears the burden of 
establishing “cause” for discretionary withdrawal of the reference.  (Obj. at 8;) see Shaia, 

2017 WL 4203544

 at *3 (“The burden of demonstrating the appropriateness of withdrawal — whether 
mandatory or discretionary — rests with the movant”).  However, the Committee appears to 
imply that this burden attaches to each factor individually, and that unless a movant “carr[ies] its 
burden on all six factors,” the district court must deny a motion to withdraw.  (Obj. at 6 
(emphasis added).)  The Committee misstates the nature of the Court’s inquiry and Liberty 
Mutual’s burden.  Rather, as Judge Phillips correctly points out, the inquiry is holistic and looks 
to all six factors, with no single factor controlling, and requires determination “on a case-by-case 
basis by weighing all the factors presented in a particular case.”  (R&R at 5;)  Inre U.S. Airways 
Grp., 

296 B.R. 673, 682

 (E.D. Va. 2003) (emphasis added); ULX Partners, LLC v. Tavenner, 

2021 WL 2188955

, at *6 (E.D. Va. May 28, 2021) (“If the district court determines that the 
balance of factors indicate that the interests of justice and judicial economy favor litigation in the 
district court, the district court should exercise its discretionary power of withdrawal.”)

(emphasis added).  While a finding of “neutral” on ail six factors would constitute a failure to 
satisfy the movant’s burden and establish “cause,” a finding that any individual factor weighs 
neutrally does not warrant outright rejection of the Motion, nor does such a neutral factor 
independently weigh against the movant.  To the extent that the Committee’s objections to Judge 
Phillips’s R&R rest on this faulty reimagination of Liberty Mutual’s burden, the Court overrules 

any such objection. 
The Court next addresses the Committee’s specific objection concerning Judge Phillips’s 
finding related to the core / non-core factor.  The Committee objects to Judge Phillips’s finding 
that “[nJo party contests that the Adversary Proceeding concerns a non-core claim,” a finding 
that would support withdrawal.  (R&R at 7.)  The Committee argues that this finding is incorrect 
based on Judge Phillips’s failure to address the “threshold jurisdictional issue” previously raised 
by the Committee.  (Obj. at 7.)  In support, the Committee cites earlier briefing where it argues 
that the Court lacks subject matter jurisdiction over the adversarial proceeding, because Liberty 
Mutual fails to establish that its claim is “related to” a case under Title 11.  (/d. at 6.)  The 
Committee argues that, because it disputes the Court’s subject matter jurisdiction over the claim, 
whether Liberty Mutual’s claim qualifies as “core” or “non-core” necessarily remains disputed as 
well.  (/d. at 6.)  On that basis, the Committee asserts that this Court should reject  Judge 
Phillips’s finding that Liberty Mutual’s claim is undisputedly non-core and should find that this 
factor weighs against withdrawal of the reference, not for it.  (/d. at 8.) 
The Court finds the Committee’s objection to lack merit, because it misreads Judge 
Phillips’s finding and conflates two separate issues, only one of which stands relevant to the 
present inquiry.  First, the Court agrees with Judge Phillips’s finding that the instant action 
involves only a non-core claim.  As Judge Phillips accurately explains, Liberty Mutual seeks to

resolve a dispute surrounding pre-bankruptcy agreements between itself and Hopeman, and its 
claim addresses potential obligations that remain independent from the underlying bankruptcy 
proceeding.  (R&R at 7.)  Tellingly, Hopeman’s own briefing arrives at the same conclusion. 
(ECF No. 1-2 at 57.)  As is evident from his Report, Judge Phillips’s assessment focuses solely 
on the question of whether Liberty Mutual’s claim, by itself, qualifies as core or non-core, 
without considering the separate question of whether the Court retains subject matter jurisdiction 
over the claim.  (R&R at 8.)  As such, the Court overrules the Committee’s objection to Judge 
Phillips’s finding that the non-core nature of Liberty Mutual’s claim stands undisputed and that 
this finding weighs in favor of withdrawal. 
Relatedly, the Committee also asks the Court to sustain its objection to Judge Phillips’s 
finding that the core / non-core factor weighs in favor of withdrawal on the basis of its 
underlying challenge to the Court’s jurisdiction, arguing that “[w]ithout a jurisdictional showing, 
this factor weighs against withdrawal of the reference.”  (Obj. at 8.)  But as the Court noted 
above, the jurisdictional question is unrelated to Judge Phillips’s finding that the claim at issue in 
this adversary proceeding is non-core and thus weighs in favor of withdrawal.  Further, the 
Committee’s jurisdictional arguments are not properly before the Court on a motion to withdraw 
the reference and have not been fully briefed.  As such, the Court overrules the Committee’s 
Objection on these grounds.  However, the Committee reserves the right to raise this issue before 
the Court by motion, and the Court will consider the merits of the Committee’s argument when 
fully briefed. 
The Court turns next to the Committee’s objection to Judge Phillips’s finding concerning 
the jury trial factor.  Because neither party has formally demanded a jury trial or refused to 
consent to a jury trial, Judge Phillips found that any assessments concerning the jury question

remain premature at this point, and that this factor thus neither weighs for nor against 
withdrawal.  (R&R at 10.)  Based on the procedural posture of this case, the Court agrees with 
Judge Phillips that this factor remains neutral at this juncture.  While the Committee raises valid 
reasons supporting its assertion that withdrawal may not be necessary at the early stages of 
litigation, Judge Phillips correctly points out that the parties have not yet requested or opposed a 
jury trial in bankruptcy court.  (/d. at 10.)  As such, the Court agrees that assessing the merits of 
withdrawing the reference on the basis of jury trial considerations is premature at this stage, and 
that therefore, this factor weighs neither in favor nor against withdrawal of the reference at this 
time.  The Court overrules the Committee’s objection accordingly. 
The Committee’s objection concerning forum shopping similarly lacks merit.  Assuming 
(without deciding) that the Court properly has subject matter jurisdiction over this dispute, and 
given that the parties have not consented to bankruptcy court jurisdiction, the Court would 
necessarily render the final decision in this adversarial proceeding, given the sole claim’s non- 
core nature.  See Chesapeake Tr., 

2014 WL 202028

 at *1 (reaffirming that, in non-core matters, 
and in the absence of consent by the parties, “the bankruptcy court only recommends a decision 
to the district court, which must make the final decision.”).  Because the Court would eventually 
conduct de novo review of the Bankruptcy Court’s adjudication of this dispute, any argument 
that withdrawing proceedings from Bankruptcy Court to the District Court at this juncture 
constitutes forum shopping fails to make logical sense.  Accord Everett v. Art Brand Studios, 
LLC, 

556 B.R. 437, 445-46

 (N.D. Cal. 2016) (“In addition, the prevention of forum shopping is 
not a concern here as only this Court has the power to enter final judgment... . Therefore, even 
if the Bankruptcy Court were to adjudicate these claims, this Court would have to conduct de 
novo review to the extent that the losing party had any objections.”).  While the Committee

argues that Liberty Mutual fails to establish that withdrawal of the reference “would best 
discourage forum shopping,” (Obj. at 11), it does not — and likely cannot — establish that 
withdrawal here would encourage such behavior.  As such, the Court again agrees with Judge 
Phillips’s assessment that this factor weighs neither in favor nor against withdrawal and 
overrules the Committee’s objection accordingly. 
The Court finally turns to the Committee’s remaining objection to Judge Phillips’s 
findings concerning the final three factors, which concern the effects of withdrawing the 
reference on the uniform administration of bankruptcy proceedings, judicial economy and the 
speed of the bankruptcy process, and the efficient use of debtor and creditor resources.  Judge 
Phillips found that these factors collectively weigh in favor of withdrawal.  (R&R at 10.)  In so 
finding, Judge Phillips pointed to Hopeman’s concession that withdrawal presents no risk ofa 
negative impact on the uniform administration of this bankruptcy case, along with the 
Bankruptcy Court’s inability to enter a final judgment in this non-core matter.  (/d.)  In his 
assessment, this latter fact suggests that withdrawal would streamline proceedings and thereby 
directly promote judicial economy.  (/d.)  The Committee objects to this finding, arguing that 
uniformity “would not be promoted by withdrawing the reference,” since the Bankruptcy Court 
“is up to speed and has the comprehensive perspective to administer this Proceeding and others 
in Hopeman’s case uniformly.”  (Obj. at  11.)  The Committee also argues that, because the 
pending motions to dismiss Liberty Mutual’s adversarial proceeding have been fully briefed and 
argued, withdrawal of the reference would have no streamlining or economizing effect.  (/d. at 
11-12.) 
The Court agrees with Judge Phillips’s assessment and finds the Committee’s objection 
to lack merit.  Judge Phillips’s view that withdrawal is unlikely to negatively impact the uniform 

                                10 

administration of bankruptcy finds support in the fact that the issues underlying this adversarial 
proceeding appear entirely severable from the underlying bankruptcy proceeding and are thus 
unlikely to negatively affect the bankruptcy matter’s administration in any way.  Additionally, to 
the extent that Judge Phillips finds that these factors weigh in favor of withdrawal, the Court 
agrees that, considering the Bankruptcy Court’s inability to ultimately render a final verdict in 
this matter, withdrawal of the reference supports judicial economy and saves the parties’ 
resources by eliminating additional stages of briefing before the District Court can dispose of the 
underlying claim.  As such, the Court agrees with Judge Phillips that withdrawal of this non-core 
proceeding will enhance the efficiency of proceedings without negatively affecting uniform 
administration of the bankruptcy matter and rejects the Committee’s objection accordingly. 
Having arrived at the same conclusions as Judge Phillips concerning the individual 
factors, the Court necessarily arrives at the same overall conclusion regarding the merits of 
Liberty Mutual’s Motion.  With the core / non-core factor weighing significantly in favor of 
withdrawal, and all remaining factors either weighing neutrally or, in the case of judicial 
efficiency, in favor of withdrawal, the Court finds that Liberty Mutual satisfies its burden of 
establishing cause for withdrawal of the reference under 

28 U.S.C. § 157

(d).  As such, the Court 
agrees with Judge Phillips’s recommendation to grant Liberty Mutual’s Motion and rejects the 
Committee’s objection to that recommendation. 

                                11 

                       IV.    CONCLUSION 
Upon performing its de novo review and for the reasons stated above, the Court hereby 
OVERRULES the Committee’s Objection (ECF No. 5) and ORDERS the following: 
L,     The Report and Recommendation of the Bankruptcy Judge (ECF No. 9) is 
      ACCEPTED and ADOPTED as the OPINION of the Court; and 
2s     Liberty Mutual’s Motion for Withdrawal of the Reference (ECF No. 1) is hereby 
      GRANTED. 
Let the Clerk file this Order electronically and notify all counsel of record.  The Court 
further DIRECTS the Bankruptcy Clerk to transfer the full record in the relevant adversary 
proceeding (Case No. 25-03020-KLP) to the District Court Clerk’s Office. 
It is so ORDERED. 

                                          David J. Novak 
                                          United States District Judge 
Alexandria, Virginia 
Dated:  November 17, 2025 

                                12 

Case Details

Case Name: Liberty Mutual Insurance Company v. Hopeman Brothers, Inc.

Court Name: District Court, E.D. Virginia

Date Published: Nov 17, 2025

Docket Number: 3:25-cv-00603

Court Abbreviation: E.D. Va.