Universal Oil, Ltd (“Universal”), Liberian International Ship & Corporate Registry (“LISC”), and Praxis Energy Agents S.A. (“Praxis”) (collectively, “lienors”) appeal from judgments of the United States District Court for the Southern District of New York (Patterson, J.), upholding grants of summary judgment by the Bankruptcy Court for the Southern District of New York (Blackshear, B.J.) in favor of the moving defendants-appellees Allfirst Bank (“Allfirst”) and Wayland Investment Funds, LLC (“Wayland”) (collectively “defendants”). See In re Millenium Seacarriers, Inc.,
This case presents a putative clash between bankruptcy law and admiralty law. We must clarify the scope of a bankruptcy judge’s jurisdiction to administer a debt- or’s maritime assets under 28 U.S.C. §§ 1334(e) and 157. We hold that the
BACKGROUND
In 1998, Millennium Seacarriers was formed to hold the capital stock of various vessel-owning subsidiaries (collectively “Millenium” or “debtors”). Millenium raised capital by issuing notes with the aggregate principal amount of one hundred million dollars at maturity. These initial notes were later exchanged for certain first priority ship mortgage notes guaranteed by each of Millenium’s vessel-owning subsidiaries (the “Notes”), as provided for in a July 15, 1998 Indenture, in favor of appellee Allfirst as indenture trustee. The Notes were subsequently registered with the Securities and Exchange Commission (SEC). Between March 1999 and November 2001, appellee Wayland purchased a substantial number of the Notes in the secondary market, and became the beneficial owner of approximately eighty-five percent of the Notes.
1. The Bankruptcy Court Proceedings
Millenium filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code, as amended, with the Bankruptcy Court for the Southern District of New York (Blackshear, B.J.) on January 15, 2002. On January 28, 2002, appellee Wayland filed a motion to lift the automatic stay of civil actions by creditors, or in the alternative, to convert the cases into petitions for liquidation under Chapter 7 of the Bankruptcy Code, or, in the alternative, to appoint a Chapter 11 trustee. Millenium filed an objection to Wayland’s motion and the bankruptcy court held a hearing on February 13, 2002. At that hearing, Wayland and Millenium reached an agreement “so ordered” by Bankruptcy Judge Cornelius Blackshear. Pursuant to that agreement, Millenium filed an amended motion on February 28, 2002 (the “Sale Motion”), pursuant to Section 363 of the Bankruptcy Code, 11 U.S.C. § 363, to (a) sell substantially by mortgage credit bid all of Millenium’s assets free and clear of liens, claims and interests; and (b) assume and assign contracts and leases in connection with such sale. The bankruptcy court accepted the Sale Motion the same day, and established bidding, notice and objection procedures pursuant to which all objections to the Sale Motion were due by March 22, 2002. Lienors LISCR and Universal, represented by the same counsel, filed maritime lien claims and objections to the sale order on March 21, 2002, and on March 22, 2002, lienor Praxis, separately represented, did as well.
LISCR’s notice of objection stated a claim for maritime liens under the Ship Mortgage Act, 46 U.S.C. §§ 31321-31330, arising from unpaid Liberian tonnage taxes. Universal’s notice of objection stated claims for maritime liens under the same act, arising from deliveries of bunkers (tanks) of oil that took place in Panama in 2001 and 2002 and were never paid for. The substance of both LISCR’s and Universal’s notices of objection was that the bankruptcy court’s authority to sell the vessels “free and clear” pursuant to 11 U.S.C. § 363(f) did not extend to vessels over which the district court lacked in rem jurisdiction, because only an admiral
a. The March 27, 2002 Sale Hearing & Order
On March 27, 2002, Judge Blackshear held a hearing on the Sale Motion. Universal and LISCR argued that the bankruptcy court lacked in rem jurisdiction over the vessels because none of the vessels had been arrested within the district court’s jurisdiction; indeed, some of the vessels were arrested in foreign ports. Counsel relied upon the decision of the Southern District of New York in In re Millenium Sea Carriers, Inc.,
Millenium involved another lienor, Omni, who contested the validity of the same Sale Motion involved in the instant case. Omni sought relief from the district court in the form of mandatory withdrawal of the reference of the case to bankruptcy court, in order to enable Omni to arrest the specific Millenium vessel in admiralty and to compel Millenium to submit to arbitration for certain wage liens.
Relying on the district court’s holding in Millenium that it lacked the in rem jurisdiction required to exercise admiralty powers, Universal and LISCR argued that the bankruptcy court lacked jurisdiction to conduct a valid in rem judicial auction because the bankruptcy court’s jurisdiction is derivative of that of the district court. They did not contest, however, the authority of the bankruptcy court to rank the priority and validity of the maritime liens. Instead, they challenged the bankruptcy court’s jurisdiction to conduct a judicial auction that would conclusively expunge the vessels’ maritime liens under admiralty law in a manner that would receive international recognition.
The bankruptcy court disagreed with counsel’s reading of Millenium as depriving the bankruptcy court of jurisdiction to conduct the sale. The bankruptcy court observed that the vessels under arrest in other jurisdictions were being held in violation of the bankruptcy stay and any sale in foreign jurisdictions of those arrested vessels would be a “nullity” in light of the bankruptcy proceeding. Responding to the question of “whether or not this so-
Judge Blackshear granted the Sale Motion and issued a Sale Order that stated in relevant part that
the Assets shall be transferred to the purchaser(s) free and clear of all mortgages, security interests, conditional sale or other title retention agreements, pledges, liens, judgments, ... provided, however, that the Assets shall be transferred subject to such Lien and related Claim, if any, held by any party listed on Schedule A attached hereto (each an “Objecting Lien Party”) that the Court finds, after due notice and a hearing, is superior in right to the Lien and related Claim of the Indenture Trustee and such finding, if any, shall be limited to the amount alleged and for the particular reasons so alleged, by such Objecting Lien Party in the respective objection filed to the Motion.
Allfirst, the Indenture Trustee, was the successful and only bidder for eighteen of the vessels.
At the conclusion of this proceeding, the bankruptcy court turned to arrangements for an expedited adversary proceeding that would resolve the maritime hens asserted by the parties objecting to the sale, including Universal, LISCR and Praxis. The court addressed debtor’s counsel in the following colloquy:
The Court: ... When can you file this adversary proceeding?
[Debtor’s counsel]: ... By Tuesday of next week we would file a [bare-]bones adversary proceeding[], naming all of the Creditors and attaching their pleadings. Obviously naming [Allfirst] and Wayland and we would probably request a hearing date.
The bankruptcy court did not specify whether lienors would be denominated as plaintiffs or as defendants in that adversary proceeding.
b. The April 17, 2002 Adversary Proceeding and Hearing
On April 4, 2002, Millenium’s counsel filed an adversary action to resolve the priority of the maritime liens asserted by Wayland and by the parties who had objected to the sale. Each of the objecting parties who had previously asserted maritime liens in their notices of objection to the Sale Motion, including Universal, LISCR and Praxis, were named as plaintiffs in the adversary proceeding. Way-land and Allfirst were named as defendants.
Judge Blackshear held a scheduling and discovery conference on April 17, 2002. At the conference, Universal and LISCR objected that debtors had filed the adversary proceeding in the lienors’ names, denominating them plaintiffs rather than defendants. Universal and LISCR maintained that appellees Wayland and Allfirst should have been the named plaintiffs. The court responded that it had ordered the debtors to file the proceeding. Universal and LISCR argued that this procedure was
The Court: You know what it is, if I had waited for all the parties to bring in their adversary piecemeal this matter would be going on to the year 2004. What I attempted to do, for both your client and the rest of the parties, was to get this matter before me in an expedited manner. If you don’t like that, you could basically move, make a motion to have your client taken off the list and I would be more than happy to grant that.
[Counsel]: I can’t. I don’t like to have to deal with it.
The Court: I don’t care about what you like about it. If you wish to have your client taken out of the adversary proceeding, I will be happy to accommodate that.
Counsel declined to withdraw, but continued to maintain that the procedure was improper because it implicated his clients’ substantive rights. The bankruptcy court responded that Wayland and Allfirst’s role as defendants in the adversary proceeding was “[procedural only.” The court suggested that lienors would lose no substantive rights in the adversary proceeding by being denominated plaintiffs, and that counsel’s objections amounted to “basically elevat[ing] form over substance.”
c. The Motions for Summary Judgment
Appellees Allfirst and Wayland moved for summary judgment on the lien claims asserted by lienors on May 31, 2002. Ap-pellees’ motion for summary judgment against LISCR asserted that there was no genuine issue of material fact concerning (1) the fact that Allfirst’s first preferred ship mortgages were validly executed and duly registered under the laws of Liberia and (2) that admiralty law ranked LISCR’s claim for Liberian tonnage taxes at a lower priority than that of Allfirst’s first preferred ship mortgages, because LISCR’s claims constituted state-created liens of a maritime nature. Appellees’ motion for summary judgment against Universal similarly argued that there was no genuine issue of material fact regarding (1) the fact that Allfirst’s first preferred ship mortgage was validly executed and duly registered under the laws of Liberia and (2) the fact that admiralty law ranked Universal’s claim for the delivery of fuel bunkers at a lower priority than that of Allfirst’s first preferred ship mortgage, because Universal’s delivery of the bunkers in Panama constituted a claim for necessaries furnished outside the United States. All-first’s motion for summary judgment against Praxis principally argued that (1) Praxis’ maritime lien for the unpaid fuel bunkers was subordinate to Allfirst’s foreign preferred ship mortgages because the bunkers of fuel furnished by Praxis in
In their responsive motions, lienors elaborated upon the maritime lien claims they had raised in their objections to the Sale Motion. LISCR argued that it had provided “registry services” to debtors in the United States and that those services constituted a lien for necessaries under maritime law. Universal asserted that (1) the bunkers Universal had furnished were necessaries under maritime law and (2) Universal had maritime lien claims of tortious conversion because at the time of delivery and consumption of the fuel, debtors had not intended to pay for the bunkers, and admiralty law ranked maritime tort liens over Allfirst’s mortgages. Praxis disavowed that its maritime liens arising from the bunker deliveries were claims for necessaries. Instead, Praxis argued that its lien claims sounded in maritime tort for conversion and were therefore superior to Allfirst’s mortgages because the debtors had negotiated for and consumed the bunkers in bad faith. None of the appealing lienors set forth evidence disputing the validity of Allfirst’s foreign preferred ship mortgage liens.
Judge Blackshear granted summary judgment to appellees on July 10, 2002.
2. The District Court Proceedings
Lienors appealed to the district court for the Southern District of New York (Patterson, J.), which issued two opinions affirming the grants of summary judgment. See Universal I,
The district court also held that the filing of the adversary proceeding naming lienors as plaintiffs had not deprived lien-ors of any substantive rights: “The adversary proceeding does not differ substantially from an interpleader action. Furthermore, the Bankruptcy Judge gave appellants’ counsel an opportunity to have their clients removed as plaintiffs, and offered them a stay pending appeal when they requested a jury trial, offers which appellants did not pursue.” Because Universal and LISCR did not dispute that Allfirst’s mortgages were validly executed and duly registered in Liberia, the district court held that the only issue before it was whether a genuine issue of material fact existed with respect to the priority of Allfirst’s ship mortgages over lienors’ claims to maritime liens of tort and necessaries.
The court held that no genuine issue of material fact existed as to the superiority of Allfirst’s ship mortgage over LISCR’s claim for Liberian tonnage taxes. The district court noted that LISCR’s Local
The district court also held that there was no genuine issue of material fact that Allfirst’s mortgages were superior to Universal’s lien claims of tort and conversion for the fuel bunkers. The court noted that Universal had failed to provide supporting evidence that a bailment, rather than a contractual relationship, had been created when Universal delivered the bunkers.
Similarly, in Praxis I, the district court held that Praxis had failed to state maritime tort claims of conversion for its fuel deliveries that would have a superior rank to Allfirst’s mortgage claims. The district court noted that the supporting evidence provided by Praxis contemplated a contractual relationship upon the delivery of the bunkers, rather than the creation of a bailment. In addition, Praxis’ allegations of bad-faith negotiations by debtors did not satisfy the conditions of maritime tort because debtor’s alleged acts did not occur on navigable waters and in connection with maritime activity. Because Praxis did not dispute that the bunkers were supplied outside the United States, the court held that Praxis’ claim of necessaries was subordinate to the foreign preferred ship mortgages.
This appeal followed, and the cases were argued before this Court in tandem.
DISCUSSION
We note that the bankruptcy court permitted debtors to file an adversary proceeding on lienors’ behalf without lienors’ consent. While we are skeptical of the bankruptcy court’s assessment that counsel’s objections to this unorthodox procedure “elevat[ed] form over substance,” we agree with the district court that lienors waived their objections by declining the bankruptcy court’s offer to withdraw from the proceeding.
We address in this opinion the complex question of the scope of bankruptcy jurisdiction when the debtor’s estate consists of maritime assets.
1. Jurisdictional Conflicts Between Admiralty and Bankruptcy, Generally
Jurisdictional conflicts between admiralty and bankruptcy have long perplexed courts and scholars.
On the other hand, while it has long been established that federal courts do not have exclusive jurisdiction in all admiralty matters, certain classes of cases are cognizable only in admiralty. Dluhos v. Floating and Abandoned Vessel, Known as “New York”,
Lienors seeking to bring an admiralty action in rem face stringent access requirements before securing the aid of the federal court to enforce their liens. In particular, subject matter jurisdiction lies in the district court where the vessel or other res is located, but that jurisdiction does not attach until the vessel is arrested within the jurisdiction. See Fed.R.Civ.P. Supp. R. C(2), D; Mackensworth v. S.S. American Merchant,
When a debtor’s estate consists primarily of maritime assets, therefore, a measure of uncertainty exists regarding the propriety of the bankruptcy court’s jurisdiction to sell those assets wholly free of maritime liens. The doctrine of custodia legis has typically been invoked to resolve this apparent conflict between bankruptcy proceedings and admiralty actions in rem. Under that doctrine, derived from principles of comity, the court that first secures custody of the property administers the property. Hellenic I,
While bankruptcy courts have adjudicated the validity and priority of maritime liens asserted against debtors’ maritime assets for nearly a century, see, e.g., Hellenic I,
Here, we resolve only the narrow question of whether a bankruptcy court may adjudicate maritime liens where the lienors voluntarily submit to its jurisdiction. To do so, we must decide: (1) whether the bankruptcy court acted consistently with its statutory grant of subject matter jurisdiction,
2. The Bankruptcy Court’s Subject Matter Jurisdiction over Debtors’ Estate
A primary goal of bankruptcy law is to centralize adjudication of a bankrupt’s estate into a single court. The Bankruptcy Code includes a broad grant of subject matter jurisdiction over a debtor’s property: “The district court in which a case under title 11 is commenced or is pending shall have exclusive jurisdiction of all of the property, wherever located, of the debtor as of the commencement of such case, and of property of the estate.” 28 U.S.C. § 1334(e). In addition, “[notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(b).
Bankruptcy courts are extensions of the federal district courts. After a plurality of the Supreme Court struck down expansive jurisdiction for bankruptcy judges under the Bankruptcy Act of 1978, Northern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
We agree with the district court that the adversary proceeding before the bankruptcy court ranking the priority of the maritime lien claims was a core proceeding. Universal I,
a. Criteria for Core Proceedings
We are satisfied that the adversary proceeding was a core proceeding under the plain language of the Bankruptcy Code. The Code specifies a non-exhaustive list of core proceedings including, inter alia, “allowance or disallowance of claims against the estate,” “determinations of the validity, extent, or priority of liens,” “orders approving the sale of property,” as well as “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.” 28 U.S.C. § 157(b)(2)(B), (K), (N), (0).
When deciding whether a contract action is a core proceeding we have considered “(1) whether a contract is antecedent to the reorganization petition; and (2) the degree to which the proceeding is independent of the reorganization.” In re U.S. Lines,
Finally, we are unmoved by lienors’ argument that the judicial auction liquidating debtors’ estate pursuant to the Sale Order deprived the bankruptcy court of subject matter jurisdiction to conduct a subsequent adversary proceeding to rank the objecting lienors’ maritime claims as set forth in the Sale Order. Bankruptcy courts retain jurisdiction to enforce and interpret their own orders. In re Petrie Retail,
The adversary proceeding fell within the core jurisdiction of the bankruptcy court for another reason. Parties may, by their conduct, submit themselves to the bankruptcy court’s jurisdiction. This Circuit has clearly established that parties, like lienors, who submit proofs of claim and thereafter actively litigate in the bankruptcy court without contesting personal jurisdiction can transform a non-core proceeding into a core one. In In re Petrie Retail,
In sum, the bankruptcy court acted well within its core jurisdiction when it conducted the adversary proceeding pursuant to the Sale Order. Were debtors’ assets non-maritime in nature, our analysis would end here. Lienors further argue, however, that the maritime character of those assets deprived the bankruptcy court of subject matter jurisdiction. We turn now to consideration of that issue.
3. The Maritime Character of Debtors’ Assets Did Not Deprive the Bankruptcy Court of its Jurisdiction
Because of the maritime character of the assets, lienors claim that the proceeding cannot be core because the bankruptcy court, as a non-Article III court, is constitutionally forbidden from adjudicating admiralty matters in light of Northern
a. The Constitution Limits Norir-Arti-cle III Courts’ Ability to Exercise Article III Powers
The distinction between core and non-core bankruptcy proceedings originated in Marathon, in which the Supreme Court considered the constitutionality of bankruptcy court jurisdiction under Article III of the constitution. In re Petrie Retail,
Since BAFJA’s enactment in 1984, “ ‘both the Supreme Court and this Court have concluded that the Marathon holding was a narrow one and have broadly construed the jurisdictional grant in [BAF-JA].”’ Cent. Vt. Pub. Serv. Corp.,
We note further that the current statutory grant of subject matter jurisdiction to the district courts, providing that “Mot-withstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11,” 28 U.S.C. § 1334(b), evinces congressional intent “to grant comprehensive jurisdiction to the bankruptcy courts so that they might deal efficiently and expeditiously with all matters connected with the bankruptcy estate.” Celotex Corp. v. Edwards,
There has been some lingering confusion regarding the scope of a bankruptcy judge’s authority to adjudicate admiralty matters under the Bankruptcy Amendments and Federal Judgeship Act of 1984 (“BAFJA”), enacted after a plurality of the Supreme Court in Northern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
b. The Putative Exclusivity of Admiralty Courts’ Power to Extinguish Maritime Liens
We do not reach the question of whether the bankruptcy court’s Sale Order purporting to sell the vessels “free and clear” of its liens wielded admiralty power within the meaning of Article III, because even if it did so, that power was not exclusively reserved to admiralty. Therefore, whether or not the bankruptcy court wielded admiralty power, it did not trespass on terrain reserved for Article III courts.
As noted supra, “[ajdmiralty’s jurisdiction is ‘exclusive’ only as to those maritime causes of action begun and carried on as proceedings in rem, that is, where a vessel or thing is itself treated as the offender and made the defendant by name or description in order to enforce a
lien.” Madruga,
In the instant case, the bankruptcy court, proceeding in rem over the debtors’ estate, see Hood,
c. Because Lienors Voluntarily Submitted to the Jurisdiction of the Bankruptcy Court, Admiralty Jurisdiction Was Not Exclusive
As noted supra, the jurisdiction of the federal admiralty courts has never been wholly exclusive. State courts, for example, may exercise in personam jurisdiction over litigants to provide remedies to causes of action that are cognizable under both admiralty and state law. See 28 U.S.C. § 1333(1); Am. Dredging Co.,
In Hudson v. N.Y. & Albany Transportation Co.,
We hold that lienors assented to the bankruptcy court’s equitable adjudication of their lien claims under principles of admiralty law. They placed their lien claims for adjudication before the bank
We recognize that this opinion does not answer the question of whether the bankruptcy court could have expunged the vessels of their liens had it not had jurisdiction over the lienors.
Conversely, lienors who avoid the bankruptcy court in the hopes of liquidating their liens in a foreign admiralty court run the risk that a foreign court will recognize result of the bankruptcy adjudication, and that they thus forfeit their chance to argue for the enforcement of a superior lien. Cf. Empire Stevedoring Co. v. Oceanic Adjusters, Ltd.,
Here, the bankruptcy court’s actions were consistent with admiralty law, so there is no reason to think there is a heightened risk that foreign courts will refuse to recognize the result of the bankruptcy adjudication. And our role is confined to assessing whether this bankruptcy court was competent to extinguish these lienors’ liens. For the reasons discussed, we are satisfied that the bankruptcy court
CONCLUSION
For the foregoing reasons, we Affiím the judgments of the district court.
Notes
. On this appeal, Universal, LISCR and Prax-is now share the same counsel.
. On April 5, 2002, Universal and LISCR filed a notice of appeal of the Sale Order, but allowed the appeal to go unperfected, and United States District Court Judge Denny Chin dismissed that appeal for failure to prosecute. In re Millenium Seacarrier, et al., No. 02 Civ. 3805 (S.D.N.Y. April 29, 2003). Prax-is did not file an appeal from the Sale Order.
. Counsel also expressed an intention to appeal, and Judge Blackshear asked if counsel wanted a stay pending appeal.
The Court: Do you wish to have a stay pending appeal?
[Counsel]: You already denied it, Your Honor.
The Court: Do you want an order?
[Counsel]: You told me to submit one if I wanted to. But given the fact that no one else is submitting orders around here, I decided I would go on record.
The Court: You do know that your appeal will probably be moot by the time the District Court takes it up.
. See 2d Cir. Local. R. 56.1.
. For example, Universal had not attached Universal’s standard terms and conditions of sale of marine bunkers. The district court noted that, had Universal submitted evidence that title of the bunkers did not pass to the vessels until payment, Universal might have provided a basis for its conversion argument.
.While Praxis did not join in Universal and LISCR's jurisdictional objections below, we consider the jurisdictional argument with respect to Praxis because of our continuing obligation to resolve whether the court below had subject matter jurisdiction. See Steel Co. v. Citizens for Better Env’t,
. See, e.g., Millenium I,
. Maritime liens are internationally recognized as providing the lienor the ability to arrest a vessel and hold it as security until an admiralty court can enforce a judgement. See Aurora Mar. Co. v. Abdullah Mohamed Fahem & Co.,
. Accordingly, the in rem action serves a central goal of admiralty law, namely, the protection of maritime commerce, see Exxon Corp. v. Central Gulf Lines, Inc.,
. We therefore need not opine on whether provisions of the Bankruptcy Amendments and Federal Judgeship Act of 1984 ("BAFJA”) trump custodia legis, see In re Modern Boats,
. Prior to 1978, these cases were decided under the Bankruptcy Act of 1898, Ch. 541, 30 Stat. 544 (1898) ("1898 Act”), as amended by the Chandler Act of 1938, Ch. 575, 52 Stat. 840 (1938) ("Chandler Act”), which vested bankruptcy power in the federal district courts and authorized district judges to appoint “referees” in bankruptcy, 1898 Act § 34(1), to refer cases and matters arising under the Bankruptcy Act to them, 1898 Act, § 22, and to review the referees’ orders and reports, 1898 Act § 38; Chandler Act § 39c. See generally 2 Collier on Bankruptcy § 23.04 (14th ed.1984). Bankruptcy Rule 901(7) (1973) (codified at 11 U.S.C. app. Rule 901(7) (1982)) changed the referees’ title to "bankruptcy judges” in 1973.
.Here, in rem jurisdiction was provided by 28 U.S.C. § 1334(e), which grants bankruptcy courts in rem jurisdiction over the property of the bankruptcy estate wherever that property may be located, see Tultex Corp. v. Freeze Kids, LLC,
. As Professor Landers cogently observed: “The only way to obtain a precise holding on the point would be for a maritime lienor ... to await the nonadmiralty sale [by the bankruptcy court] and then sue to enforce his lien on the ground that the sale did not execute the lien.” Landers, supra, at 507 n. 475; see Gilmore & Black, § 9-95, at 816-17.
