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Nature of Suit Code: 380
Nature of Suit: Other Personal Property Damage
Cause of Action: 

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IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 14-30857

FIREFIGHTERS’ RETIREMENT SYSTEM; MUNICIPAL EMPLOYEES 

RETIREMENT SYSTEM OF LOUISIANA; NEW ORLEANS 

FIREFIGHTERS’ PENSION & RELIEF FUND,

Plaintiffs - Appellees

v.

CITCO GROUP LIMITED; CITCO FUND SERVICES (CAYMAN ISLANDS), 

LIMITED; CITCO BANKING CORPORATION, N.V.; CITCO FUND 

SERVICES (EUROPE), BV; CITCO (CANADA), INCORPORATED; CITCO 

TECHNOLOGY MANAGEMENT, INCORPORATED; CITCO BANK 

NEDERLAND, N.V. DUBLIN BRANCH; CITCO GLOBAL CUSTODY, N.V.; 

CITCO FUND SERVICES (BERMUDA), LIMITED; FLETCHER ASSET 

MANAGEMENT, INCORPORATED; ALPHONSE FLETCHER, JR., also 

known as Buddy; DENIS KIELY; DUHALLOW FINANCIAL SERVICES, 

L.L.C.; PETER ZAYFERT; CONSULTING SERVICES GROUP, L.L.C.; JOE 

MEALS; SKADDEN, ARPS, SLATE, MEAGHER & FLOM, L.L.P.; GRANT 

THORNTON INTERNATIONAL, LIMITED,

Defendants - Appellants

Appeal from the United States District Court 

for the Middle District of Louisiana

Before STEWART, Chief Judge, HAYNES, Circuit Judge, and BROWN, 

District Judge.*

HAYNES, Circuit Judge:

 

* District Judge of the Eastern District of Louisiana, sitting by designation.

United States Court of Appeals

Fifth Circuit

FILED

August 6, 2015

Lyle W. Cayce

Clerk

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Our prior opinion is withdrawn, and the following is substituted in its 

place. Defendants-Appellants appeal the district court’s order of remand on 

the basis that the district court lacked the discretion to abstain from hearing 

the case. Because we conclude that the district court could not permissively 

abstain and equitably remand under 28 U.S.C. §§ 1334(c)(1) and 1452(b) 

without considering the Chapter 15 bankruptcies, we REVERSE the district 

court’s decision to remand the case to state court and REMAND the case to the 

district court for consideration under its bankruptcy jurisdiction.

I. Background

Plaintiffs-Appellees are three Louisiana resident pension funds. 

Plaintiffs invested in a leveraged feeder fund located in the Cayman Islands 

(the “Leveraged Fund”). The Leveraged Fund was part of a larger fund, the 

Fletcher Income Arbitrage Fund, Ltd. (the “Arbitrage Fund”). In June 2012, 

the master fund entity, of which the Leveraged Fund and the Arbitrage Fund 

were a part, filed a voluntary petition for bankruptcy under Chapter 11 in the 

Bankruptcy Court for the Southern District of New York.

Plaintiffs sued Defendants, various organizations and individuals 

involved in the transaction, in Louisiana state court in March 2013. Plaintiffs 

accused Defendants of violating various Louisiana securities laws, among 

other state law claims. Plaintiffs later amended the petition to add Skadden, 

Arps, Slate, Meagher & Flom, L.L.P. (“Skadden”) as a defendant. In June 

2013, Defendants removed the case to federal district court based on the 

related Chapter 11 bankruptcy. Additionally, Defendants argued that the 

federal court had diversity jurisdiction, as Skadden was improperly joined.1 

 

1 Although no Defendant is a Louisiana entity or person, the addition of Skadden 

defeated diversity jurisdiction because Skadden, a partnership whose members include U.S.

citizens domiciled abroad, is stateless for the purposes of diversity jurisdiction. Coury v. Prot, 

85 F.3d 244, 249–50 (5th Cir. 1996) (U.S. citizens domiciled abroad are not diverse); Harvey 

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After removal, Skadden moved to dismiss the case for lack of personal 

jurisdiction. Plaintiffs moved to remand in July 2013, arguing that the district 

court lacked subject matter jurisdiction under either bankruptcy or diversity 

theories. In September 2013, the district court informed the parties that it 

would address questions regarding subject matter jurisdiction before 

examining personal jurisdiction, citing Ruhrgas AG v. Marathon Oil Co., 526 

U.S. 574 (1999). 

In January 2014, the Leveraged Fund and the Arbitrage Fund, through 

Cayman liquidators, filed voluntary petitions under Chapter 15 in the S.D.N.Y. 

Bankruptcy Court. See In re FIA Leveraged Fund, No. 14-10093 (Bankr. 

S.D.N.Y. Feb. 27, 2014) (order recognizing foreign main proceeding); In re 

Fletcher Income Arbitrage Fund Ltd., No. 14-10094 (Bankr. S.D.N.Y. Feb. 27, 

2014) (order recognizing foreign main proceeding). Defendants notified the 

district court of these bankruptcies in a supplemental memorandum in further 

support of their motion to dismiss and their opposition to Plaintiffs’ motion to 

remand.

In June 2014, the magistrate judge issued a report recommending that 

the district court grant the motion to remand. The report found that the 

district court had subject matter jurisdiction under 28 U.S.C. § 1334(b) because 

the case was related to the Chapter 11 filing. The report considered and 

rejected Plaintiffs’ argument that the district court must abstain under 

§ 1334(c)(2). Though it found that mandatory abstention did not apply, the 

report recommended that the district court permissively abstain from 

exercising that jurisdiction and equitably remand under 28 U.S.C. 

§§ 1334(c)(1) and 1452(b). The report did not address the Chapter 15 

 

v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008) (citizenship of partnership 

determined by citizenship of members). 

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bankruptcies as part of this analysis, though it noted the existence of the 

bankruptcies in a footnote. 

Over Defendants’ objection, the district court adopted the report and 

recommendation. The district court stated that it would remand the case 

“pursuant to 28 U.S.C. § 1334(c)(1) and 28 U.S.C. § 1452(b).” The district court 

did not address diversity jurisdiction or the Chapter 15 bankruptcies in the 

order. Defendants filed an emergency motion to stay the remand pending Fifth 

Circuit review, but the district court denied the motion.

Defendants timely appealed. Defendants argue that the district court 

erred by permissively abstaining and equitably remanding the case (1) without 

considering diversity jurisdiction and (2) in spite of the Chapter 15 

bankruptcies. As we conclude that the district court erred in remanding the 

case in light of the Chapter 15 bankruptcies, we do not address Defendants’ 

first argument regarding diversity jurisdiction.

II. Appellate Jurisdiction

We must first determine whether we have appellate jurisdiction.2 See 

Bissonnet Invs. LLC v. Quinlan (In re Bissonnet Invs. LLC), 320 F.3d 520, 522 

(5th Cir. 2003). This is an appeal from the district court’s order remanding the 

case to state court. Ordinarily, we cannot review orders to remand based on 

§§ 1334 or 1452. See § 1334(d) (“Any decision to abstain or not to abstain made 

under subsection (c) . . . is not reviewable by appeal or otherwise by the court 

of appeals . . . .”); § 1452(b) (“An order entered under this subsection remanding 

a claim or cause of action, or a decision to not remand, is not reviewable by 

appeal or otherwise by the court of appeals . . . .”). We have held that a remand 

 

2 Plaintiffs moved to dismiss this appeal for lack of appellate jurisdiction. The motions 

panel denied the motion. The motions panel’s denial of the motion to dismiss the appeal does 

not bind the oral argument panel. See Newby v. Enron Corp., 443 F.3d 416, 419 (5th Cir. 

2006) (citing In re Grand Jury Subpoena, 190 F.3d 375, 378 n.6 (5th Cir. 1999)).

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order is unreviewable even if the order “rests on a misinterpretation of the 

remand statute,” In re Wilson Indus., 886 F.2d 93, 95 (5th Cir. 1989), or if the 

district court’s reasons for the order are incorrect, Sykes v. Tx. Air Corp., 834 

F.2d 488, 492–93 (5th Cir. 1987) (noting an “absolute bar” against reviewing 

district court’s decision to remand under § 1452, whether the reasons are 

equitable or based on a lack of bankruptcy jurisdiction).

However, there are limited circumstances under which we may review a 

remand order. See In re Shell Oil Co., 932 F.2d 1523, 1528 (5th Cir. 1991) 

(“[W]here an exception to non-reviewability exists, an appellate court has 

jurisdiction to review the remand order . . . .” (quotation marks and citation 

omitted)). The Supreme Court has held that provisions barring review do not 

apply if the district court exceeds its statutorily-defined authority to remand. 

See, e.g., Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 351 (1976) 

(holding that the district judge, who remanded a properly removed case where 

there was diversity jurisdiction, exceeded statutory authority when he 

remanded that case based on efficiency).3 In Quackenbush v. Allstate 

Insurance Company, the Supreme Court recognized a limited class of 

situations in which remand orders under the general removal statute, 28 

U.S.C. § 1447, are reviewable on appeal. 517 U.S. 706, 711–12 (1996); see also

Schexnayder v. Entergy La., Inc., 394 F.3d 280, 283 (5th Cir. 2004). Like the 

provisions at issue in this case, § 1447(d) provides that “[a]n order remanding 

a case to the State court from which it was removed is not reviewable on appeal 

or otherwise . . . .” Though § 1447(d) does not explicitly provide an exception, 

the Supreme Court reasoned that “‘§ 1447(d) must be read in pari materia with 

 

3 The Supreme Court overruled Thermtron only to the extent Thermtron stands for 

the proposition that an order of remand is not a final order under 28 U.S.C. § 1291. See 

Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 714–15 (1996).

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§ 1447(c), so that only remands based on grounds specified in § 1447(c)’”—lack 

of subject matter jurisdiction or procedural defects in removal—“‘are immune 

from review under § 1447(d).’” Quackenbush, 517 U.S. at 711–12 (quoting 

Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127 (1995)). Thus, a

remand under § 1447 is reviewable if the district court remanded for a reason 

other than those listed in § 1447(c). Id.; Schexnayder, 394 F.3d at 283. If the 

statutory bars to review do not apply, a remand order is a final order for the 

purposes of 28 U.S.C. § 1291. See Quackenbush, 517 U.S. at 713.

Though § 1447(d) is not at issue here,4 the reasoning in Quackenbush is 

applicable in this case as well. The district court permissively abstained under 

§ 1334(c)(1) and equitably remanded pursuant to § 1452(b). The district court 

did not address the related Chapter 15 bankruptcies. Courts may permissively 

abstain from certain bankruptcy cases “[e]xcept with respect to a case under 

chapter 15.” 28 U.S.C. § 1334(c)(1) (emphasis added). Defendants base their

challenge to the district court’s order on the argument that § 1452 does not 

apply in this case, rather than on the court’s reasons for remand. We conclude 

that Defendants’ challenge to the remand order thus falls within an exception 

to nonreviewability. See Schexnayder, 394 F.3d at 283 (the Fifth Circuit will 

review a case if based on a ground for remand not contemplated by remand 

statute); Wilson Indus., 886 F.2d at 95 (holding that an appellate court can 

 

4 In Things Remembered, the Supreme Court held that § 1447(d) may bar review of 

remands in cases where removal was based on § 1452. 516 U.S. at 129 (“If an order remands 

a bankruptcy case to state court because of a timely raised defect in removal procedure or 

lack of subject-matter jurisdiction, then a court of appeals lacks jurisdiction to review that 

order under § 1447(d), regardless of whether the case was removed under . . . § 1452(a).”). 

The remand in this case was not based on a lack of subject matter jurisdiction or a defect in 

removal procedure, but rather permissive abstention based upon equity. Thus, § 1447(d) 

does not bar review here. See Quackenbush, 517 U.S. at 711–12; see also In re Campos, 234 

F.3d 705, 2000 WL 1598002, at *2 n.5 (5th Cir. 2000) (unpublished) (“Since this remand order 

was premised on the bankruptcy court’s ‘equitable’ powers, § 1447(d) does not forbid appellate 

review.”).

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review a district court’s decision to remand when that decision rests “upon a 

ground not authorized by statute”). 

We therefore recognize a limited exception to the nonreviewability 

provisions of §§ 1334(c)(1) and 1452(b), but only for cases that involve 

permissive abstention and are related to Chapter 15 bankruptcies.5 Chapter 

15 was added to the bankruptcy code in 2005. Chapter 15 “was intended ‘to 

provide effective mechanisms for dealing with cases of cross-border 

insolvency’” that would “increase legal certainty, promote fairness and 

efficiency, protect and maximize value, and facilitate the rescue of financially 

troubled businesses.” In re Vitro S.A.B. de CV, 701 F.3d 1031, 1043 (5th Cir. 

2012) (quoting 11 U.S.C. § 1501(a)). “Central to Chapter 15 is comity” and the 

facilitation of cooperation between multiple nations. Id. To effect these goals, 

the statutory provisions “‘concentrat[e] control of these questions in one court.’” 

Id. (quoting H.R. Rep. No. 109-31, pt. 1, at 110 (2005)). The 2005 amendment 

to § 1334(c)(1), which limits a court’s ability to permissively abstain from 

Chapter 15 cases, is consistent with Chapter 15’s emphasis on concentrating 

the resolution of cases involving foreign bankruptcies in one court system. As 

a Chapter 15 bankruptcy is not an enumerated ground for permissive 

abstention, an appellate court may review an abstention order despite 

§ 1334(d)’s bar against appellate review of decisions to abstain. Similarly, an 

appellate court may review a remand order that is based on permissive 

abstention despite § 1452(b)’s bar against appellate review of decisions to 

remand. Otherwise the amendment to § 1334(c)(1) would be rendered 

nugatory in Chapter 15-related cases that are removed from state court.

We limit this holding to only Chapter 15-related cases that are remanded 

 

5 As discussed in the following section, we also hold that § 1334(c)(1)’s exception for 

Chapter 15 cases applies to a Chapter 15 case itself as well as proceedings arising in and

related to a Chapter 15 case.

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based on § 1334(c)(1) permissive abstention. We need not—and do not—

resolve whether appellate jurisdiction exists to review a § 1452(b) remand 

order that is based on § 1334(c) abstention in a case that does not relate to a 

Chapter 15 bankruptcy.6 Accordingly, we have jurisdiction to review this issue 

on appeal.

III. Discussion

Turning to the merits of the appeal, Defendants argue that the district 

court exceeded its statutory authority by permissively abstaining and 

equitably remanding this lawsuit even though it relates to Chapter 15 

bankruptcy cases.7 The district court provided two statutory bases for its 

decision to remand, §§ 1334(c)(1) and 1452(b). Section 1334(c)(1) provides:

Except with respect to a case under chapter 15 of title 11, nothing 

in this section prevents a district court in the interest of justice, or 

in the interest of comity with State courts or respect for State law, 

from abstaining from hearing a particular proceeding arising 

under title 11 or arising in or related to a case under title 11.

§ 1334(c)(1) (emphasis added).

We have not previously addressed the extent to which this provision bars 

 

6 Our decision therefore does not conflict with cases predating the 2005 amendments 

in which the Seventh and Second Circuits held that abstention-related equitable remands 

were not reviewable. See In re U.S. Brass Corp., 110 F.3d 1261, 1265–66 (7th Cir. 1997); 

Cathedral of Incarnation in Diocese of Long Island v. Garden City Co. (In re Cathedral of 

Incarnation in Diocese of Long Island), 90 F.3d 28, 32–33 (2d Cir. 1996).

7 In their appellate brief, Plaintiffs do not challenge Defendants’ claim that the 

Chapter 15 bankruptcies are related to this case, and we conclude that the two are related. 

In concluding that the Chapter 11 bankruptcy was related to this case, the magistrate’s 

report emphasized Plaintiffs’ allegations that the Chapter 11 debtor was an alter ego of 

several defendants in this case and the Leveraged Fund and the Arbitrage fund, both of 

which are now debtors in the Chapter 15 bankruptcies. Moreover, Plaintiffs in this case seek 

the return of their investment loss suffered by purchasing shares in the Leveraged Fund, 

which they allege was part of the Arbitrage Fund. Thus, a recovery in this case could affect 

the Chapter 15 debtors’ liabilities. This is sufficient to establish “related to” jurisdiction. See 

TXNB Internal Case v. GPR Holdings, L.L.C. (In re TXNB Internal Case), 483 F.3d 292, 298

(5th Cir. 2007).

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permissive abstention in Chapter 15 bankruptcy cases. There are two possible 

interpretations of the subsection. First, the phrase “[e]xcept with respect to a 

case under chapter 15 of title 11” could mean that § 1334(c)(1) only excepts the 

Chapter 15 bankruptcy itself. See, e.g., Abrams v. Gen. Nutrition Cos., 2006 

WL 2739642, at *7 (D.N.J. Sept. 25, 2006) (unpublished) (adopting this 

interpretation). Second, the phrase could mean that both the Chapter 15 case 

itself and cases “arising in or related to” Chapter 15 cases are excluded. See, 

e.g., British Am. Ins. Co. v. Fullerton (In re British Am. Ins. Co.), 488 B.R. 205, 

238–39 (Bankr. S.D. Fla. 2013) (adopting the latter interpretation); Fairfield 

Sentry Ltd. v. Amsterdam (In re Fairfield Sentry Ltd.), 452 B.R. 64, 83 (Bankr. 

S.D.N.Y.) (same), rev’d on other grounds, 458 B.R. 665 (S.D.N.Y. 2011). 

We hold that the latter interpretation is more consistent with the plain 

language and purpose of the statute. If one reads the rest of the subsection 

after the initial clause, the subsection clearly distinguishes between a “case”

and a “proceeding.” The “case” arises under title 11; the statute permits a court 

to abstain from a “particular proceeding” that arises under title 11 or arises in 

or relates to the “case.” See § 1334(c)(1). We understand the word “case” to 

mean the same thing in the initial clause that it does in the rest of the 

subsection. See Sullivan v. Stroop, 496 U.S. 478, 484 (1990) (“[I]dentical words 

used in different parts of the same act are intended to have the same meaning.” 

(citation and quotation marks omitted)). Reading the initial clause in context, 

the subsection indicates that a court may abstain from “a particular proceeding 

arising under title 11 or arising in or related to a case under title 11” but not

from a proceeding “with respect to a case under Chapter 15 of title 11.” 

§ 1334(c)(1).

The district court also relied on § 1452 to equitably remand. Though 

§ 1452 does not explicitly exclude Chapter 15 cases, several courts have held 

that § 1334(c) should be read in pari materia with § 1452(b). See, e.g., Lazar

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v. California (In re Lazar), 237 F.3d 967, 981 (9th Cir. 2001) (quoting Sec. 

Farms v. Int’l Bhd. of Teamsters, 124 F.3d 999, 1010 (9th Cir. 1997)); see also 

Erlenbaugh v. United States, 409 U.S. 239, 243 (1972) (under rule of in pari 

materia, statutes that pertain to the same subject should be construed “as if 

they were one law” (quoting United States v. Freeman, 44 U.S. 556, 564 (1845)). 

Lending support to the view that the provisions should be read in pari materia, 

§ 1452 explicitly references § 1334 to define jurisdiction over bankruptcy cases. 

See § 1452(a) (“A party may remove any claim or cause of action in a civil 

action . . . to the district court for the district where such civil action is pending, 

if such district court has jurisdiction of such claim or cause of action under 

section 1334 of this title.” (emphasis added)); see also United States v. 

Rodriguez, 60 F.3d 193, 196 (5th Cir. 1995) (observing that parties’ position 

that two provisions should be interpreted in pari materia was supported by the 

Federal Sentencing Guidelines’ explicit reference to a Federal Rule of Criminal 

Procedure). Reading §§ 1334(c)(1) and 1452(b) together, then, the prohibition 

against abstention from proceedings related to Chapter 15 cases also applies 

to bar the equitable remand of those proceedings under § 1452.

In their brief,8 Plaintiffs do not challenge Defendants’ argument that the 

court cannot permissively abstain from cases related to Chapter 15 

 

8 At oral argument, Plaintiffs raised several theories not addressed in any way in 

their brief, including their arguments that the confirmation of the plan in the Chapter 11 

proceeding gave Plaintiffs the right to bring this case in state court and that Chapter 15 only 

applies to claims by a foreign representative. We decline to address matters raised for the 

first time in oral argument. See Herrmann Holdings Ltd. v. Lucent Techs. Inc., 302 F.3d 552, 

562 n.2 (5th Cir. 2002). In any event, we conclude that these arguments are unavailing as 

they do not alter the fact that the proceeding at issue “relates to” the Chapter 15 

bankruptcies, even if the parties in this proceeding could not bring the Chapter 15 case 

themselves. See In re Prescription Home Health Care, Inc., 316 F.3d 542, 547 (5th Cir. 2002) 

(“It is well-established that, to be ‘related to’ a bankruptcy, it is not necessary for the 

proceeding to be against the debtor or the debtor’s property.”). Additionally, the confirmation 

of the Chapter 11 plan does not alter the potential liabilities of Leveraged and Arbitrage in 

the Chapter 15 proceedings.

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bankruptcies. Rather, Plaintiffs’ sole argument in their brief is that removal 

is judged at the time of removal, and the Chapter 15 bankruptcies were filed 

later. See Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 571 (2004); 

In re Deepwater Horizon, 745 F.3d 157, 162–63 (5th Cir.) (“The defendants bear 

the burden of establishing the basis for removal, and operative facts and 

pleadings are evaluated at the time of removal.”), cert. denied sub nom., 135 S.

Ct. 401 (2014).

Here, however, the propriety of removal was not in doubt: removal was 

proper based on the Chapter 11 proceedings, such that the district court had 

subject matter jurisdiction at the time of removal. The issue in our case is the 

propriety of remand. “[T]he ability of a party to remove a case and the ability 

of a court to remand a case that has been properly removed by a party are 

distinct concepts not necessarily subject to the same rules.” Buchner v. 

F.D.I.C., 981 F.2d 816, 818 (5th Cir. 1993). “Once the district court has 

assumed jurisdiction over a properly removed case . . . [t]he district court’s 

authority to remand the case to state court depends on the nature of the district 

court’s jurisdiction over the claims that comprise the case at the time of the 

remand.” Cuevas v. BAC Home Loans Servicing, LP, 648 F.3d 242, 248 (5th 

Cir. 2011) (emphasis added); Adair v. Lease Partners, Inc., 587 F.3d 238, 240

(5th Cir. 2009).9 Thus, the propriety of the district court’s remand order is 

judged at the time of that order, not the time of the original removal.

We hold that a district court cannot permissively abstain from exercising 

 

9 Although Defendants informed the court of the pending Chapter 15 cases before the 

magistrate judge made the recommendation to remand, Plaintiffs argue that Defendants 

were required to amend their notice of removal to include the Chapter 15 bankruptcies as a 

basis for federal jurisdiction. To the extent Plaintiffs suggest that we cannot consider the 

Chapter 15 bankruptcies, we disagree. In this case, Defendants had already properly 

removed the case based on bankruptcy jurisdiction; the new information about the Chapter 

15 bankruptcies further supported removal on that basis and did not require a supplemental 

notice of removal. See Yarnevic v. Brink’s, Inc., 102 F.3d 753, 755 (4th Cir. 1996).

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jurisdiction in proceedings related to Chapter 15 cases. Accordingly, we 

conclude that the district court erred by permissively abstaining and equitably 

remanding the case in the face of the Chapter 15 bankruptcies. Because we 

conclude that the district court’s remand was in error on this basis, we do not 

reach Defendants’ arguments regarding possible diversity jurisdiction. 

Accordingly, we REVERSE the district court’s decision to remand the case to 

state court and REMAND the case to the federal district court for proceedings 

consistent with this opinion.

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