1

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re:

HEARTWISE, INC.,

Debtor.

BAP No. CC-22-1089-LSG

Bk. No. 8:20-bk-13335-SC

MEMORANDUM∗

VITAMINS ONLINE, INC.,

Appellant,

v.

HEARTWISE, INC.; UNITED STATES 

TRUSTEE; MAGLEBY, CATAXINOS & 

GREENWOOD, PC,

Appellees.

Appeal from the United States Bankruptcy Court

for the Central District of California

Scott C. Clarkson, Bankruptcy Judge, Presiding

Before: LAFFERTY, SPRAKER, and GAN, Bankruptcy Judges.

INTRODUCTION

Prepetition, creditor Vitamins Online, Inc. (“VOL”) obtained a 

judgment (the “Judgment”) against HeartWise, Inc. in the United States

District Court for the District of Utah (“District Court”). HeartWise 

appealed the Judgment. VOL was represented for a time in that litigation 

∗ This disposition is not appropriate for publication. Although it may be cited for 

whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential 

value, see 9th Cir. BAP Rule 8024-1.

FILED

NOV 23 2022

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
2

by Magleby, Cataxinos & Greenwood, P.C. (“MCG”). The engagement 

agreement between VOL and MCG provided that any judgment awarded 

would be paid to MCG, which would deduct its fees and distribute the 

balance to VOL. After HeartWise filed its chapter 111 case, VOL and MCG 

each filed proofs of claim for the full Judgment amount, and each objected 

to the other’s claim. Thereafter, the bankruptcy court confirmed 

HeartWise’s plan of reorganization, which provided that HeartWise would

deposit into the court registry funds sufficient to satisfy the Judgment but 

that no distribution would be made on either claim until the appeal of the 

Judgment and the claim dispute were both resolved.

Post-confirmation, the bankruptcy court sustained MCG’s objection 

and overruled VOL’s, finding that the engagement agreement created a 

power coupled with an interest entitling MCG to collect the Judgment. 

After a new judge was assigned to the case, the bankruptcy court granted 

VOL’s motion for reconsideration. The court vacated the orders sustaining

MCG’s objection and overruling VOL’s, but it abstained from deciding the 

dispute, concluding that its resolution would have no impact on the estate 

and that Utah courts were better suited to interpret the engagement 

agreement.

We AFFIRM.

1 Unless specified otherwise, all chapter and section references are to the 

Bankruptcy Code, 11 U.S.C. §§ 101–1532. “Rule” references are to the Federal Rules of 

Bankruptcy Procedure.
3

FACTS

A. Pre-Petition Events

HeartWise and VOL are both engaged in the business of selling 

vitamins and nutritional supplements online. In 2013, VOL sued HeartWise

in the District Court, alleging claims for unfair competition and false 

advertising under federal and state law (the “District Court Action”).

About five years into the litigation, VOL hired MCG to replace its existing 

counsel in the District Court Action. VOL and MCG executed an 

engagement agreement, which provided for a combination of reduced 

hourly fees and a contingency fee. The engagement agreement provides, in 

relevant part: 

Client agrees to pay [MCG] the contingency fee at the time of 

recovery. That is, it is the intent of the parties that both Client 

and the Firm shall be paid at the same time, as any recovery is

obtained. . . . All payments from or collected against HeartWise

or associated persons or entities shall be directed to [MCG],

which will deduct the contingency fee and any outstanding fees 

and costs, and then pay the balance to Client. . . .

In November 2020, the District Court awarded VOL $9,551,232 in 

damages against HeartWise plus prejudgment interest and attorneys’ fees, 

for an estimated total of $14.5 million. The Judgment provides that 

attorneys’ fees will be determined post-judgment. HeartWise appealed the

Judgment, and VOL filed a cross-appeal, arguing that it should have been 

awarded an additional $34 million. The appeal and cross-appeal remain
4

pending at the Tenth Circuit Court of Appeals.

2 Almost immediately after 

the Judgment was awarded, VOL terminated MCG’s representation.

B. Bankruptcy Events

HeartWise filed a chapter 11 bankruptcy petition on December 4, 

2020. VOL and MCG each filed proofs of claim for $14.5 million based on 

the Judgment (claim numbers 3-2 and 5-2, respectively). MCG’s proof of 

claim was based on the engagement agreement, which MCG asserted 

entitled it to receive payment of the Judgment (and any further amounts

recovered), subtract its fees and costs, and pay the remaining balance to

VOL.

3

VOL and MCG each objected to the other’s claims. VOL argued that 

MCG was not a creditor because the Judgment was owed to VOL; MCG 

argued that it was entitled to payment pursuant to the engagement 

agreement. After a hearing, the bankruptcy court overruled VOL’s 

objection and sustained MCG’s. Although no party had raised the theory, 

the bankruptcy court sua sponte reasoned that, through the engagement 

agreement, VOL had granted MCG an irrevocable power coupled with an 

interest. Under that theory, the bankruptcy court found that VOL had 

granted MCG the power, i.e., the exclusive right, to collect the Judgment, 

2 According to the Tenth Circuit Court of Appeals docket, the matter was argued 

November 15, 2022.

3 VOL and MCG also filed proofs of claim for $34 million (claim numbers 8 and 

12-1, respectively), representing “additional amount that should have been awarded” in 

the District Court Action.
5

and the interest coupled with that power was MCG’s attorneys’ lien that 

arose by operation of Utah statutory or common law.4 Alternatively, the 

bankruptcy court found that the interest “may be viewed as MCG’s rights 

to payment of all its fees and costs under the Engagement Agreement.”

Based on this conclusion, the bankruptcy court found that VOL had no 

right to payment directly from HeartWise. The bankruptcy court entered 

an order disallowing VOL’s claim number 3-2 (the “Disallowance Order”)

and an order overruling VOL’s objections to MCG’s claim number 5-2 (the 

“Objection Order”).

In the meantime, the bankruptcy court confirmed HeartWise’s first 

amended chapter 11 plan of reorganization. The confirmed plan provides

for 100% payment to all creditors, plus postpetition interest. It provides

that HeartWise will deposit $14.5 million into the court registry for 

payment of the Judgment and states that those funds will not be released 

“to Magleby” until all appeals of the Judgment and any subsequent 

proceedings have been completed. The court’s findings and conclusions 

regarding confirmation similarly state that

the Plan provides that the full amount of the Judgment, [plus 

interest and attorneys’ fees] are being deposited into the 

Court’s registry pending an outcome of the objections to Claim 

Nos. 3 and 5, and the appeal and cross-appeal of the Judgment. 

4 The bankruptcy court cited Utah Code § 38-2-7(2), which provides that an 

attorney obtains a lien on settlement funds for the balance of any compensation due. 

The bankruptcy court also cited Montague v. McCarroll, 49 P. 418 (Utah 1897), for the 

proposition that a power coupled with an interest is irrevocable.
6

. . . . The Court has yet to determine which party, Magleby or 

Vitamins Online, will be paid the Judgment, or any portion

thereof.

And the confirmation order states that the plan “provides for HeartWise to 

interplead approximately $14.5 million in moneys ear-marked to pay the 

Claim 3-2 or Claim 5-2 (depending upon how the interpleader is ultimately 

resolved).”

The bankruptcy case was assigned to a new judge in February 2022,

following the previous judge’s retirement. VOL then moved for

reconsideration of the Disallowance Order. VOL argued that it had been

denied due process by not being permitted to brief the power coupled with 

an interest theory or to be heard on the court’s factual findings. It also 

argued that the bankruptcy court erred in disallowing its claim because 

(i) MCG’s objection was not based on § 502(b); and (ii) the court failed to 

give effect to the parties’ intentions in interpreting the engagement 

agreement. VOL further argued that the bankruptcy court erred in its 

interpretation of the power coupled with an interest theory as applied to 

the engagement agreement and, in any event, Utah law prohibits such 

arrangements between attorneys and their clients. Finally, it argued that 

MCG lacked standing.

After a hearing, the bankruptcy court granted reconsideration, 

concluding that the engagement agreement did not create an assignment 

and that MCG’s right to collect did not translate into a right to payment 
7

(i.e., a claim) directly against HeartWise. The court also noted that it was 

unclear from the previous bankruptcy judge’s memorandum decision how 

the terms of the engagement agreement created an irrevocable power 

coupled with an interest. The bankruptcy court ordered the Disallowance

Order and the Objection Order vacated, but it permissibly abstained from 

resolving the dispute between VOL and MCG over which entity has a right 

to payment from HeartWise, concluding that the dispute should be 

adjudicated in the District Court.

In an order denying VOL’s motion for additional findings, the 

bankruptcy court clarified that it did not intend the following statements of

fact in the order denying reconsideration to be limiting on the court that 

ultimately decides the dispute between VOL and MCG: (1) that the Utah 

District Court would decide the amount of attorneys’ fees; (2) that 

HeartWise’s appeal was pending before the Utah District Court rather than 

the Tenth Circuit Court of Appeals; and (3) that an action resolving the 

claim dispute would be adjudicated by the Utah District Court rather than 

the state court. The bankruptcy court also stated that to the extent any of 

those statements were misstatements of the record, it would retract them, 

noting that any such errors were minor and had no bearing on its 

abstention decision. The bankruptcy court also clarified that it intended 

that once the claims issues were resolved, the parties would file pleadings 

in the bankruptcy court to further the process of payment on the

appropriate claim. 
8

VOL timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and 

157(b)(2)(B). We have jurisdiction under 28 U.S.C. § 158.

ISSUES

Did the bankruptcy court err in implicitly finding that MCG had 

standing?

Did the bankruptcy court abuse its discretion in abstaining from 

adjudicating the parties’ rights to the funds held in the court registry?

STANDARDS OF REVIEW

Standing is a legal issue that we review de novo. Veal v. Am. Home 

Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 906 (9th Cir. BAP 2011).

We review for abuse of discretion the bankruptcy court’s order 

regarding permissive abstention. Certain Underwriters at Lloyds, Syndicates 

2623/623 v. GACN, Inc. (In re GACN, Inc.), 555 B.R. 684, 692 (9th Cir. BAP 

2016). To determine whether the bankruptcy court abused its discretion, we 

conduct a two-step inquiry: (1) we review de novo whether the bankruptcy 

court “identified the correct legal rule to apply to the relief requested”; and 

(2) if it did, we consider whether the bankruptcy court’s application of the 

legal standard was illogical, implausible, or without support in inferences

that may be drawn from the facts in the record. United States v. Hinkson, 585 

F.3d 1247, 1262 (9th Cir. 2009) (en banc).
9

DISCUSSION

It is not clear what VOL hopes to accomplish in bringing this appeal. 

Although VOL argues that the bankruptcy court abused its discretion in 

abstaining, VOL contends that the bankruptcy court erred in not deciding 

the claims dispute in VOL’s favor, and it takes the position that it could be 

paid immediately should we so find. As such, VOL focuses much of its 

argument on the merits of the dispute. But the primary issue in this appeal 

is whether the bankruptcy court appropriately abstained from hearing the 

dispute; the merits are not before us. Oddly enough, VOL also argues that 

the bankruptcy court lacked subject matter jurisdiction over the dispute.

If anything, the bankruptcy court’s order was favorable to VOL in 

that it granted VOL’s motion for reconsideration, which simply put the 

parties back in the position they were in before the initial ruling on the

claim objections, leaving them free to litigate their dispute elsewhere. 

VOL’s appeal seems counterproductive given its complaint that the 

abstention ruling is delaying distribution of the Judgment proceeds. As 

discussed below, we see no abuse of discretion in the bankruptcy court’s 

decision to abstain.

A. VOL’s motion to modify the record on appeal or for judicial notice

is denied.

As a threshold matter, we address VOL’s motion to modify the 

record on appeal, or in the alternative, its request for judicial notice with 

respect to several documents that were not included in its excerpts of 
10

record but are all available on the bankruptcy court’s docket. VOL argues 

that several of those documents are material to the decision in this appeal, 

while the remaining documents provide “undisputed background and 

context to the issues on appeal.” VOL also contends that some of the 

documents are relevant to show that HeartWise advanced certain 

arguments in the bankruptcy court that are contrary to those asserted on 

appeal. HeartWise and MCG each filed objections to the motion on the

ground that permitting supplementation of the record at this time would 

be prejudicial. 

Although we have discretion to permit supplementation of the 

record, see Rule 8009,5 we find it unnecessary to our resolution of this 

appeal. We note that some of the documents were included in MCG’s 

excerpts of the record. In any event, we have discretion to take judicial 

notice of documents electronically filed in the underlying bankruptcy case, 

and we have done so here, as appropriate. See Atwood v. Chase Manhattan

Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003). VOL’s 

motion is thus DENIED.

5 Rule 8009(e)(2) provides, in relevant part, 

“[i]f anything material to either party is omitted from or misstated in the record 

by error or accident, the omission or misstatement may be corrected, and a 

supplemental record may be certified and transmitted:

. . .

(C) by the court where the appeal is pending.
11

B. MCG had standing in the bankruptcy court.

VOL contends that the bankruptcy court should have found that 

MCG lacked standing to object to VOL’s claim, an issue that VOL raised in 

its motion for reconsideration. VOL contends that MCG lacked

constitutional standing, prudential standing, and statutory standing. VOL 

also contends that because MCG lacked standing, the bankruptcy court had

no jurisdiction to determine MCG’s claim objection.

But VOL’s standing arguments are premised upon the notion that 

MCG has no valid claim in the HeartWise bankruptcy, which has yet to be 

determined. The vacatur of the Disallowance Order, standing alone, did 

not result in the disallowance of MCG’s claim; the bankruptcy court 

explicitly abstained from that determination. Unless and until it is 

determined that MCG has no right to the funds being held in the court 

registry, it has standing.

C. The bankruptcy court did not abuse its discretion in permissively

abstaining.

Pursuant to 28 U.S.C. § 1334(c)(1), a bankruptcy court may abstain 

from hearing a matter over which it has jurisdiction under 28 U.S.C. 

§ 1334(a) and (b). Subsection (c)(1) of 28 U.S.C. § 1334 provides, in relevant 

part, “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.”
12

In determining whether permissive abstention is appropriate, courts 

generally consider the following factors:

(1) the effect or lack thereof on the efficient administration of 

the estate if a Court recommends abstention, (2) the extent to 

which state law issues predominate over bankruptcy issues,

(3) the difficulty or unsettled nature of the applicable law,

(4) the presence of a related proceeding commenced in state 

court or other nonbankruptcy court, (5) the jurisdictional basis, 

if any, other than 28 U.S.C. § 1334, (6) the degree of relatedness 

or remoteness of the proceeding to the main bankruptcy case,

(7) the substance rather than form of an asserted ‘core’ 

proceeding, (8) the feasibility of severing state law claims from 

core bankruptcy matters to allow judgments to be entered in 

state court with enforcement left to the bankruptcy court,

(9) the burden of [the bankruptcy court’s] docket, (10) the 

likelihood that the commencement of the proceeding in 

bankruptcy court involves forum shopping by one of the 

parties, (11) the existence of a right to a jury trial, and (12) the 

presence in the proceeding of nondebtor parties.

Eastport Assocs. v. City of Los Angeles, 935 F.2d 1071, 1075-76 (9th Cir. 1991)

(quoting Christensen v. Tucson Ests., Inc. (In re Tucson Ests., Inc.), 912 F.2d 

1162, 1167 (9th Cir. 1990) (quotations and additional citations omitted).

The bankruptcy court analyzed these factors and determined that 

they weighed in favor of abstention. Specifically, the court found that, 

because the plan has been substantially consummated, and funds have 

been set aside to pay whichever party is determined to be entitled to them, 

abstention would have no impact on the effective administration of the 

estate. Next, it correctly found that the dispute revolved entirely around 
13

state law issues. The court also found that the Utah District Court was 

better suited to resolve the issue of who has the right to payment of the 

Judgment and that having the matter resolved there would alleviate the 

burden on the bankruptcy court to resolve a non-bankruptcy matter.

VOL argues that the bankruptcy court erred in not addressing MCG’s 

standing. But we have rejected VOL’s standing argument above. In the 

alternative, VOL argues that, if MCG had standing, the bankruptcy court 

had an “unflagging obligation” to adjudicate the dispute. It cites cases from 

the Supreme Court and the Ninth Circuit, which stand for the proposition 

that abstention is the exception, not the rule, and that abstention should be 

exercised only in exceptional circumstances. See Sprint Commc’ns, Inc. v. 

Jacobs, 571 U.S. 69, 77 (2013); Allegheny Cnty. v. Frank Mashuda Co., 360 U.S. 

185, 188-89 (1959); Ctr. For Biological Diversity v. U.S. Forest Serv., 925 F.3d 

1041, 1050-51 (9th Cir. 2019). VOL argues that abstention will result in the 

parties’ time and resources being wasted, but it cites no case law holding 

that this alone is a reason to retain jurisdiction. And their “unflagging

obligation” argument makes no sense given that the plan has been 

confirmed, so the resolution of the dispute would have no impact on the 

bankruptcy estate. In fact, in VOL’s reply brief, it argues that the 

bankruptcy court lacked subject matter jurisdiction over MCG’s claim 

objection for this very reason.

Next, VOL argues that the bankruptcy court erred in abstaining in 

the absence of a parallel state court proceeding, citing Schulman v.
14

California, 237 F.3d 967, 981 (9th Cir. 2001), and Security Farms v. 

International Brotherhood of Teamsters, Chauffers, Warehousemen & Helpers, 124 

F.3d 999, 1009 (9th Cir. 1997).6 Although this is a correct statement of the 

rule articulated in those cases, they are distinguishable. See Moore v. Hatfield 

(In re Hatfield), No. 08-3140 TC, 2009 WL 2849538, at *2 (Bankr. N.D. Cal. 

2009).

In Hatfield, the bankruptcy court denied reconsideration of its order 

abstaining from hearing an adversary proceeding that involved state law 

claims between non-debtor parties. In its ruling, the bankruptcy court held 

that the absence of a parallel state court proceeding was not fatal to its 

decision to abstain. Id. The court pointed out that the holdings of Lazar and 

Security Farms were based on the procedural posture of those cases—the 

respective state court proceedings had been removed to the bankruptcy 

court, thus extinguishing those proceedings. The Ninth Circuit held that, in 

that context, the bankruptcy court’s decision whether to keep those

proceedings was governed by the statutes and rules governing remand of 

removed proceedings, rather than by the more general provisions 

governing abstention. Sec. Farms, 124 F.3d at 1009-10.

The Hatfield court noted that the Ninth Circuit expressly stated in 

Tucson Estates that the pendency of another proceeding is only a factor in 

determining whether to remand, and in Eastport Associates, although no 

6 Although the District Court case has been closed, the Judgment provides that 

the final amount of attorney’s fees and costs are to be determined post-judgment.
15

state court action was pending, “the Ninth Circuit treated that fact merely 

as a consideration weighing against abstention, and not as a bar against 

abstention.” In re Hatfield, 2009 WL 2849538, at *2 (citing Eastport Assoc., 935 

F.2d at 1078).

7

VOL also complains that bankruptcy court analyzed only three out of

the twelve factors and that it assumed several facts “that it later retracted”

but did not revisit its analysis. Contrary to VOL’s assertion, the bankruptcy

court’s findings explicitly addressed the first, second, fourth, ninth, and 

twelfth Tucson Estates factors. And its other findings implicitly address 

most of the other factors. For example, in analyzing the Disallowance 

Order, the bankruptcy court concluded that it was unclear from the case 

law that the terms of the engagement letter vested an interest in MCG such 

that MCG could pursue payment against HeartWise (factor three: difficulty 

or unsettled nature of applicable state law). The bankruptcy court also 

implicitly found that the dispute was only peripherally related to the main 

bankruptcy case and, despite the core nature of a claims allowance 

proceeding, HeartWise would be entirely unaffected by the outcome of the 

dispute (factors six and seven: degree of relatedness or remoteness of the 

7 VOL also cites our unpublished decision in Skyline Ridge, LLC v. Cinco Soldados, 

LLC (In re Skyline Ridge, LLC), BAP No. AZ-21-1108-LBS, 2022 WL 884724 (9th Cir. BAP

Mar. 23, 2022), in which we relied on Lazar and Security Farms in holding that abstention 

provisions did not apply because there was no parallel state court proceeding. But the 

facts of Skyline Ridge were analogous to those in Lazar and Security Farms because the 

issue was not abstention, but whether the matter should be remanded.
16

proceeding to the main bankruptcy case and substance rather than form of 

an asserted core proceeding). 

Although the bankruptcy court should consider all twelve 

factors, one should not be beguiled into a false sense that a 

head count will yield the answer with mathematical certainty. 

Rather, the list serves to provide an intellectual matrix to guide 

the judge who considers abstention and to enable a reviewing 

court to ascertain whether there has been an abuse of 

discretion.

Fidelity Nat’l Title Ins. Co. v. Franklin (In re Franklin), 179 B.R. 913, 928

(Bankr. E.D. Cal. 1995) (citing Eastport Assocs., 935 F.2d at 1075). In our 

view, the bankruptcy court addressed the relevant factors sufficiently to 

support its ruling. And VOL does not address how the bankruptcy court’s 

clarifications regarding what court could decide the matter should have 

made any difference to the analysis.

VOL also contends that the bankruptcy court erred in finding that the 

dispute was a two-party dispute, arguing that HeartWise is necessarily a 

party to the dispute because it will have to pay the claims if allowed (at the 

same time, VOL argues that HeartWise has no standing in this appeal).8

But VOL does not address how the resolution of the dispute will impact 

the estate. VOL asserts that the bankruptcy court’s finding means that the 

8 In its reply brief, VOL asserts that HeartWise lacks standing in this appeal and 

is judicially estopped from arguing that VOL’s claim will not be deemed allowed unless 

and until VOL prevails in the Tenth Circuit appeal because it previously took the 

position that the claim was noncontingent. We have not relied on HeartWise’s 

arguments in resolving this appeal. Therefore, we need not address its standing.
17 

dispute is a non-core matter, which is error because it is a core matter 

concerning claims allowance. But the bankruptcy court implicitly, and 

correctly, found that, while the dispute was ostensibly a core proceeding, 

its substance was a two-party dispute that did not impact the estate.

 VOL also assigns error to the bankruptcy court’s abstention decision 

because its impact was to delay distribution on the claims at issue, which it 

contends violates the confirmation order. It states that the bankruptcy court 

“indicated that Claim 3 would be paid from the Court’s registry without 

awaiting resolution of any proceedings before the Tenth Circuit,” citing

language from the confirmation order in which the bankruptcy court 

explained why granting a stay of that order, which was requested by 

another creditor, would prejudice other creditors and HeartWise: 

There would seem to be a powerful incentive for VOL not to

appeal an order confirming the Plan because by declining to 

appeal (and assuming VOL can overcome an objection to . . . 

one of its claims by its former attorneys), VOL would stand to 

get paid approximately $14.5 million in cash in relatively short 

order and to continue to litigate its claimed entitlement to an 

additional $54 million.

But this verbiage does not order anything, and we fail to see how it 

supports VOL’s arguments. The language in the confirmation order that 

explicitly relates to the claims dispute is arguably ambiguous in stating that 

one of the two claims will be paid from the interpleaded funds “depending 

upon how the interpleader is ultimately resolved.” But the confirmed plan 

and the court’s findings and conclusions clarify that no distribution will be 
18

made on either claim until all disputes have been resolved, including the 

Tenth Circuit appeals.

VOL also argues that the bankruptcy court should have considered 

the merits of the claim objections. First, it contends that the bankruptcy 

court erred in not disallowing MCG’s claim because MCG is not a creditor, 

i.e., MCG has no right to enforce the Judgment. And second, VOL contends 

that the bankruptcy court erred in not allowing VOL’s claim because 

MCG’s objection was not brought pursuant to § 502(b). We have addressed 

VOL’s first argument in the standing discussion. As noted, with the 

vacatur of the Disallowance Order and the Objection Order, which VOL 

does not contest, the question of who has the right to enforce the Judgment 

is an open question. VOL’s second argument also lacks merit. MCG’s

limited objection did not seek to disallow the claim altogether but to 

redirect payment to itself based on the engagement agreement. Again, 

whether that is appropriate remains an open question.

In its reply brief, VOL complains that both appellees raised new 

arguments on appeal. But those arguments relate to the merits of the claim

objections, so we have not relied on them in deciding whether the 

bankruptcy court correctly abstained.

CONCLUSION

The bankruptcy court did not abuse its discretion in abstaining from 

deciding the dispute between VOL and MCG. We therefore AFFIRM.