2007 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit 4-20-2007 

# In Re: B anks P r e c e de nt i al or N on-P r e c e de nt i al : N on-P r e c e de nt i al D ocke t N o . 06-1847

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Thi s de c i sion i s br ou ght t o you for f r e e and ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i ll anova U nive r sity S choo l of L a

w Di git al Reposit ory

. It h as be e n a c c ept e d for inclusion in 2007 D e c i sion s b y an author i z e d a dmini s tr at or of V i ll anova U nive r sity S choo l of L a

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. F or mor e inform at ion, p le as e c ont a ct Be n j amin . C arl s on@l a

w . vi ll anova . e du . Re c omme nde d C it at ion " In Re: B ank s " (2007). 2007 D e cisio n s . P ape r 1240. http://d i git alc ommon s .l a

w . vi ll anova . e du/thir dc ir c uit_2007/1240B L D - 84 NOT P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT N O S. 06- 1847, 06- 1851, & 06- 1852

________________ I N RE : FRE D ER I CK H . BA N K S, D ebt or FRE D ER I CK H . BA N K S, A ppel l ant v. RO N A . LAB ELLA

__________________ I N RE : FRE D ER I CK H . BA N K S, D ebt or FRE D ER I CK H . BA N K S, A ppel l ant v. BE T T Y J O L AR GE NT ; DKT

__________________ I N RE : FRE D ER I CK H . BA N K S, D ebt or2 FRE D ER I CK H . BA N K S, A ppel l ant v. BA NK ONE , N. A.

____________________________________ O n A p p ea l Fro m the U n it ed S tat es D istri ct C o u rt F o r th e W e ste rn D istric t o f P e n n sy lv a n ia ( D . C . C i v. N os . 05- cv- 00612, 05- cv- 00616, 05- cv- 00617) D istric t Ju d g e : H o n o ra b le J o yF lo w e rs C o n ti

_______________________________________ Subm i t t ed ForPoss i bl e D i s m i s s al U nder28 U . S. C . § 1915( e) ( 2) ( B ) orSum m aryA ct i on

U n d e r T h ir d C ir c u it L A R 2 7 .4 a n d I.O .P . 1 0 .6

D ece m ber29, 2006 Be f o r e : M CK EE, FUEN TES AND RO TH, CI RCU I T J UD GES

( Fi l ed A pr i l 20, 2007)

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OP I NI ON

_______________________ P E R C UR I AM O n N ovember1, 2001, Fr eder i ck H . B anks fi l ed forbankrupt cypr ot ect i on under C hapt er7 of the B ankrupt cyC ode. T he appoi nt ed trus t ee i n bankrupt cyfi l ed a r eportof n o a ss e ts. In 2 0 0 5 , B a n k s f iled m a n ya d v e rsa rya c tio n s, in c lu d in g th e th re e a t issu e in t hes e r el at ed appe al s . T he B ankrupt cyC our t , hol di ng thati tl acke d s ubj ect - m at t erA lth o u g h B a n k s to o k iss u e in th e D istric t C o u rt w ith th e B a n k ru p tcy C o u rt’s a c tio n to 1 di s m i s s hi s adver s aryact i ons s ua s pont e, as the D i s t r i ctC our texpl ai ned, the B ankrupt cy C o u rt w a s o b lig a ted to e v a lu a te its ju risd ictio n a n d d ism iss th e a c tio n s o v e r w h ich it l acke d j ur i s di ct i on. 3 juri sd ict ion o v er the se a d v ersa ryac ti o n s (an d o thers tha t w e d o n o t prese n tl yco n side r) becau se theyrel at ed o nlyt o p ost -pet i t i on act s unrel at ed to the ad m i nis t rat i on of B ank s’ bankrupt cycas e, di s m i s s ed them. B anks appea l ed t o t he D i s t r i ctC our t . T he D i s t r i ct C o u rt a f f ir m e d th e o rd e r d is m is s in g th e a d v e rs a ry a c tio n s . B a n k s a p p e a ls . T he D i s t r i ctC our thad j ur i s di ct i on t o r evi ew the B ankrupt cyC our t ’ s or der p u rsua n t t o 2 8 U . S . C . § 1 5 8 (a), an d w e h av e jurisdicti o n to rev iew the D istri ct C o u rt ’s or derunder28 U . S. C . §§ 158( d) & 1291. W e exe r ci s e the s ame st andar d of r evi ew as t he D i s t r i ctC our t , s ubj ect i ng t he B ankrupt cyC our t ’ s l egal det erm i nat i ons t o pl enaryr evi ew and r evi ew i ng i t s fac tual fi ndi ngs forcl earerr or . See I n r e U ni t ed H eal t hcar e Sy s . , 396 F .3 d 2 4 7 , 2 4 9 (3 d C ir . 2 0 0 5 ). W e w ill s u m m a ri ly af

f ir m b e c a u s e n o s u b s ta n tia l q u e s tio n is p re s e n te d o n a p p e a l. See L. A . R . 27. 4; I . O . P. 10. 6. T he B ankrupt cyC our tl acke d s ubj ect - m at t erj ur i s di ct i on overt he thr ee l i s t ed adve r s aryact i ons . T w o s t atut es , 28 U . S. C . §§ 1334 and 157, 1 provide t he sou rce of a ban kruptcycou rt ’s j uri sdi ct i on . S ee B i nd er v. P ri ce W at erhouse & C o. , 372 F. 3d 154, 161 ( 3d C i r . 2004) . U nderthes e s t atut es , and r el evantt o our anal y s i s her e, a bankrupt cycour thas j ur i s di ct i on overthos e ca s es “‘ atl eas t“r el at ed t o” t he bankrupt cy . ’ ” I n r e M ar cus H ook D ev. Par k, I nc. , 943 F. 2d 261, 266 ( 3d C i r . 1991)4

(c itatio n s o m itt e d ). L iti g a tio n is re late d to a b a n k ru p tcy i f its o u tco m e c o u ld “ c o n c e iv a b ly have a nyeff

ecton the es t at e bei ng admi ni s t r at ed i n bankrupt cy . ” See Pac or , I nc. v. H ig g in s , 7 4 3 F .2 d 9 8 4 , 9 9 4 (3 d C ir . 1 9 8 4 ); s e e a ls o In re M a rc u s H o o k D e v . P a rk , In c ., 943 F. 2d at264 ( s t r es s i ng t he t erm “conc ei vabl y ”) . M or e s peci fi cal l y , an ac t i on i s r el at ed t o bankrupt cyi f i t s out come “coul d al t erthe debt or ’ s r i ght s , l i abi l i t i es , opt i ons , or fr eedom of act i on ( ei t herpos i t i vel yornegat i vel y ) and w hi ch i n anyw ayi m pact s upon t he handl i ng and admi ni s t r at i on of the bankrupt cyes t at e. ” See Pac or , 743 F. 2d at994. T he th re e a d v e rsa rya c tio n s w e re u n re late d to b a n k ru p tcy be c a u se , as B a n k s p lain lya lleg e d in hi s compl ai nt s , t he s uppos ed w r ongs occurr ed i n 2002 and 2003, atthe ea r l i es t , aft erhe had fi l ed forbankrupt cypr ot ect i on. A ccor di ngl y , theyar e notpr oper t yof the bankrupt cy e s ta te s u c h th a t th e irre s o lu tio n w o u ld a f f e c t th e h a n d lin g o r a d m in is tr a tio n o f th e e s ta te . See I n r e B obr off, 766 F. 2d 797, 803 ( 3d C i r . 1985) ( ci t i ng 11 U . S. C . § 541 forthe p rop o sit ion that “the o n lyp rop ertyinterests of a d eb tor th at be co m e p art of the e stat e a re tho se e x ist ing ‘as o f th e c o m m en ce m en t of the c ase . ’”) In su m , b e c a u se th e B a n k ru p tcy C o u rt lac k e d su b jec t-m a tter ju risd ictio n , w e w ill a f f ir m th e o rd e r i n s o m u c h a s it d is m is s e d th e th re e lis te d a d v e rs a ry a c tio n s .