a “ “

based on allegedly fraudulent conveyances made by the debtor to these co-defendants, In the
pending bankruptcy case, the plaintiff has filed a Complaint Objecting to the Discharge of the
Debtor, as well as a Motion to Dismiss the case. In the case at hand, the plaintiff is requesting
that the court declare the transfer of Zoran Trlin’s assets void. In addition, plaintiff seeks the
disgorgement of funds by Yolanda Trlin and Deal Transport, Inc. Clearly, the sought relief
would have a direct impact on Zoran Trlin’s estate and affect the amount of property available
for the creditor.

Plaintiff argues that the bankruptcy Trustee did not pursue a fraudulent transfer action in
bankruptcy court, and therefore, plaintiff should be permitted to sue defendants in state court.
Because Defendants have successfully removed the case to federal court based on diversity of
citizenship, however, the only issue properly presented is whether this case should remain in
federal district court or be referred to bankruptcy court. The Court finds that this case is “related
to” the bankruptcy proceeding and therefore should be referred to the bankruptcy court.

CONCLUSION

A proceeding may be referred if it is “related to a case under title 11.” 28 U.S.C. §

157(a), 28 U.S.C. § 1334. Because this case is “related to” Jn re Zoran Trlin, No. 02-35573, the

motion to refer is granted.

Dated: August 15, 2003 ENTERED

QA An.S

AMY J. ST.
United States ict Judge



~ “

claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the
debtor and others but that [28 U.S.C. § 1334(b)] allows to be forced into bankruptcy court so that
all claims by and against the debtor can be determined in the same forum.” Zerand-Bernal
Group, 23 F.3d at 161.

Because this case involves three defendants who are not parties to the pending bankruptcy
action, it is necessary to examine the limits of the bankruptcy court’s jurisdiction. The Supreme
Court has held that “related to” jurisdiction can include “suits between third parties which have
an effect on the bankruptcy estate.” Celotex Corp. v. Edwards, 514 U.S. 300, 307 n.5, 115 S.Ct.
1493, 131 L.Ed.2d 403 (1995), See also In re Emerald Acquisition Corp., 170 B.R. 632, 640
(Bankr. N.D. Ill. 1994) (Proceedings classified as “related to” include “suits between third parties
which in one way or another affect the administration of the title 11 case.””) One purpose of the
bankruptcy court is to “force into the bankruptcy court suits to which the debtor need not be a
party but which may affect the amount of property in the bankrupt estate.” Zerand-Bernal
Group, 23 F.3d at 162.

Courts are careful, however, to curb the potentially limitless reaches of the “related to”
language. See, e.g., Cytomedix, Inc. v. Perfusion Partners & Assocs., Inc., 243 F.Supp.2d 786,
790 (N.D. Ill. 2003), Zerand-Bernal Group, 23 F.3d at 161. In cases involving creditors, the
Seventh Circuit stated that a bankruptcy court’s jurisdiction under the “related to” language of 28
U.S.C. § 157(c) extends to cases which “affec{t] the amount of property available for distribution
or the allocation of property among creditors.” Matter of Xonics, 813 F.2d at 131.

Even under these limitations, this case is related to the pending bankruptcy action.

Counts I, I, and III of the Complaint seek recovery from Yolanda Trlin and Deal Transport, Inc.



Hoatese ~ fa
nited States District Court, Northern District of Illinois

Name of Assigited J Sletlug Judge if Oth
nmesifetingsece | Amy J. St. Eve et et oer
CASE NUMBER 03 C 3883 DATE 8/15/2003

CASE Freedom Business vs. Trlin

TITLE

[in the following box (a) indicate the party filing the motion, e.g. plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature

MOTION: of the motion being presented.]
DOCKET ENTRY:

ql) im Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motiondue

@) Qo Answer brief to motion due___. Reply to answer briefdue___.

(4) oO Ruling/Hearingon___—_—setfor___—__sat

(5) Qo Status hearing{held/continued to] [set for/re-set for]on___—ssetfor__ sat.

(6) oO Pretrial conference[held/continued to] [set for/re-set for]on_____—ssetfor__—s at__S
(0) o Trial[set for/re-set for]on__at

(8) Oo [Bencl/Jury trial] [Hearing] held/continued toa

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) (O)Local Rule 41.1. CUFRCP41(aX1) O) FRCP41(a)(2).

for 8/18/03 is stricken.

a1) @f [For further detail see order attached to the original minute order.]

(10) MH [Otherdocketentry] Enter Memorandum Opinion and Order. Defendant’s motion to refer the case
to the United States Bankruptcy Court for the Northern District of Illinois is granted. Status hearing set

No notices required, advised in open court.
No notices required. emmnber pf scsices
Notices mailed by judge’s staff. 615 2003
Notified counsel by telephone. a docketed
a | Docketing to mail notices.
Mail AO 450 form. {YNGD LOWLSIA “SA
Copy to judge/magistrate judge. 7 yy313
7 lewnem BGaL HH STONY ED sect
TH epuy's Ouyang ot Fd
cond cs oer scr



a A

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

FREEDOM BUSINESS BROKERS,

La

it Ay
Plaintiff G 7 5
2003

No. 03 C 3883
v.

YOLANDA TRLIN, DEAL TRANSPORT,
INC., ZORAN TRLIN, and Z TRANSPORT,
INC.,

we veveernvrnve verve

Defendants.
-MEMORANDUM OPINION AND ORDER
AMY J. ST. EVE, District Judge:

Defendants Yolanda Trlin, Deal Transport, Inc., Zoran Trlin, and Z Transport, Inc. have
moved to refer this case to the United States Bankruptcy Court for the Northem District of
Illinois. Because this case is “related to” the bankruptcy case of Jn re Zoran Trlin, No. 02-35573,
Defendants’ motion is granted.

FACTUAL AND PROCEDURAL BACKGROUND

Zoran Trlin and his wife Yolanda Trlin are citizens of Illinois. Z Transport, Inc. and Deal
Transport, Inc. are trucking corporations which are owned by Zoran Trlin and Yolanda Trlin,
respectively, and are incorporated in Illinois. Freedom Business Brokers is incorporated in
California with its principal place of business in California.

In April, 2002, arbitration proceedings took place between Plaintiff and Zoran Trlin and Z
Transport in California. On June 21, 2002, a California state court issued a judgment on the

arbitration award against Zoran Trlin and Z Transport in the amount of $180,670, plus interest



~y “

and costs.

On September 13, 2002, Zoran Trlin filed a chapter 7 petition in the Bankruptcy Court of
the Northern District of Illinois. See Jn re Zoran Trlin, No. 02-35573 (Bankr. N.D. Il.) (Judge
Schwartz). That action is currently pending. On January 15, 2003, the bankruptcy court entered
an order lifting the automatic stay and allowing the plaintiff to pursue a state court action for
fraudulent transfer of assets.

On April 25, 2003, Plaintiff filed a seven count complaint in the Circuit Court of Cook
County, Illinois against Defendants. Plaintiff alleged fraudulent conveyances and preferential
transfers. The complaint also seeks to void certain alleged transfers made from Zoran Trlin to his
co-Defendants, as well as to disgorge funds from various Defendants. On June 6, 2003,
Defendants removed the case to this Court. Defendants now seek referral of the case to the
bankruptcy court.

ANALYSIS

The purpose of bankruptcy jurisdiction is “to provide a single forum for dealing with all
claims to the bankrupt’s assets.” In the Matter of Xonics, Inc., 813 F.2d 127, 131 (7" Cir. 1987).
A district court may refer to a bankruptcy court proceedings “arising under title 11” as well as
proceedings “arising in . . . a case under title 11.” 28 U.S.C. § 157(a); 28 U.S.C. § 1334(b). The
domain of these types of proceedings is “limited to questions that arise during bankruptcy
proceeding and concern administration of bankruptcy estate, such as whether to discharge a
debtor.” Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7" Cir. 1994).

District courts may also refer cases that are “related to” a title 11 proceeding. 28 U.S.C. §

157(a). These can encompass “tort, contract, and other legal claims by and against the debtor,