Source: http://docs.justia.com/cases/federal/district-courts/kentucky/kyedce/0:2011cv00134/68898/14/
Timestamp: 2014-07-25 09:07:34
Document Index: 783707623

Matched Legal Cases: ['§ 502', '§ 1334', '§ 1334', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 158', '§ 157', '§ 157', '§ 157', '§ 158', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 548', '§ 157', '§ 544', '§ 157', '§ 544', '§ 544', '§ 157', '§ 548', '§ 544', '§ 157', '§ 547', '§\n157', '§ 157', '§ 544', '§ 157', '§ 157', '§ 157', '§\n157', '§ 1334', '§ 157', '§ 1334', '§ 157', '§ 1334', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 157', '§ 548', '§ 157']

MEMORANDUM OPINION AND ORDER; denying motion to withdraw refernece 1 for Official Committee of Unsecured Creditors of Appalachian Fuels, LLC v. Branch Banking and Trust Company et al :: Justia Dockets & Filings Justia.com
CIVIL ACTION NOS. 0:11-CV-128; 0:11-CV-129; 0:11-CV-130; 0:11-CV-131; 0:11-CV132; 0:11-CV-133; 0:11-CV-134; 0:11-CV-135; 0:11-CV-136
IN RE: APPALACHIAN FUELS, LLC, ET AL.
Adv. Proc. No. 11-01041
OF APPALACHIAN FUELS, LLC
ENERGY COAL RESOURCES, INC. ET AL.
This bankruptcy adversary proceeding comes before the Court on several
Defendants’ and Plaintiff’s motions to withdraw the reference to the United States
Bankruptcy Court for the Eastern District of Kentucky. On June 11, 2009, several creditors
filed an Involuntary Petition against Debtor Appalachian Fuels, LLC (“the Debtor”) under
Chapter 7 of the United States Bankruptcy Code. (09-10343; Doc. # 1). Thereafter, some
of the Debtor’s affiliates filed Chapter 11 petitions. On June 29, 2009, the Bankruptcy
Court converted the Debtor’s Chapter 7 bankruptcy to a Chapter 11. (09-10343; Doc. #
144). On July 14, 2009, the Court appointed the Official Committee of Unsecured Creditors
of Appalachian Fuels, LLC (“the Committee”)1. (09-10343; Doc. # 194). On July 17, 2009,
the Court ordered that the Debtor’s Chapter 11 bankruptcy be jointly administered with the
bankruptcies of its affiliates.2
On June 22, 2011, the Committee filed its Complaint, commencing the abovecaptioned adversary proceeding. (11-1041; Doc. # 1). On August 19, 2011, the Committee
filed its First Amended Complaint. (11-1041; Doc. # 20). The Amended Complaint asserts
107 separate causes of action against 37 different defendants. (Id.).
This matter is currently before the Court on Defendant Business Aircraft Leasing,
Inc.’s (BALI) Motion to Withdraw the Reference (11-128; Doc. # 1), Defendants Bruce
Addington, Erik Addington, EBA Development LLC, and Horsepower Leasing, LLC’s Motion
to Withdraw the Reference (11-129; Doc. # 1), Defendants Machinery Sales and Service,
LLC, John C. Smith, and Jeffrey Muncy’s Motion to Withdraw the Reference (11-130; Doc.
# 1), Defendants Energy Coal Resources, Inc. (ECR), Illinois Fuel Company, Inc., and
Stephen Addington’s Motion to Withdraw the Reference (11-131; Doc. # 1), Defendants
Robert Addington, Frank Bennett, Julie Hudson, David Jones, Mark Garrett Smith, and
Gregory Stumbo’s Motion to Withdraw the Reference (11-132; Doc. # 1), Defendants Larry
Addington, Addington Aviation, LLC, Addington Land Company, Appalachian Machinery,
Inc. (AMI), Big Sandy Properties, LLC, Carbon Fuels Illinois, LLC, Larry Austin Dickerson,
On January 23, 2012, the Bankruptcy Court entered an Order substituting The Liquidating Trustee
of App Fuels Creditors Trust as Plaintiff in the adversary proceeding. (11-01041; Doc. # 160).
The cases being jointly administered with Appalachian Fuels, LLC, Case No. 09-10343 include:
Appalachian Holding Company, Inc., Case No. 09-10372; Appalachian Premium Fuels, LLC, Case No. 0910373; Appalachian Environmental, LLC, Case No. 09-10374; Kanawha Development Corporation, Case No.
09-10375; Appalachian Coal Holdings, Inc., Case No. 09-10405; and Southern Eagle Energy, LLC, Case No.
09-10406.
Midwestern Biofuels, LLC, Pyramid Island Development, Inc., Kathryn Reid, and Task
Trucking, Inc.’s Motion to Withdraw the Reference (11-133; Doc. # 1), Plaintiff Official
Committee of Unsecured Creditors’ Conditional Motion to Withdraw the Reference (11-134;
Doc. # 1), Defendant Jet Support Services, Inc.’s Motion to Withdraw the Reference (11135; Doc. # 1), and Defendant Tri-State Airport Authority’s Motion to Withdraw the
Reference (11-136; Doc. # 1). The motions have been fully briefed, and oral argument was
held on April 11, 2012 in Covington. The matter is now ripe for review. For the reasons
stated herein, the moving parties’ motions to withdraw the reference are hereby DENIED.
The Committee commenced this adversary proceeding to (1) avoid and recover
funds that were allegedly fraudulently or preferentially transferred to the Defendants; (2)
recover damages arising out of Defendants’ corporate waste, breaches of fiduciary duty,
civil conspiracy, unjust enrichment, and aid and abetment of other Defendants in doing the
same; and (3) recover damages arising from the legal malpractice and conflicted
representation committed by Appalachian Fuels’ attorneys.3 (11-1041; Doc. # 20, ¶ 1).
The Committee alleges that Appalachian Fuels was reduced to an “insolvent husk” as the
result of self-dealing by brothers Larry and Stephen Addington (along with other family
members and friends) who “surreptitiously used Appalachian Fuels to generate funds and
The Committee alleges it has standing to pursue the claims asserted in the Amended Complaint
pursuant to (a) the Order Conferring Standing on the Official Committee of Unsecured Creditors of
Appalachian Fuels, LLC to Pursue Related Party Claims on Behalf of the Estates, dated February 12, 2010
(09-10343; Doc. # 907); (b) the Unopposed Order Concerning Related Party Claims, dated March 4, 2010 (0910343; Doc. # 933); and/or (c) the Agreed Order Conferring Standing on the Official Committee of Unsecured
Creditors of Appalachian Fuels, LLC to Pursue Recovery Actions on Behalf of the Estates, dated April 11,
2011. (11-1041; Doc. # 20, ¶ 13). None of the Defendants refute that the Committee has standing to bring
this adversary proceeding.
acquire assets that they then transferred to themselves and numerous corporate alter
egos,” referred to in the Amended Complaint as “Insiders.” (Id. at 2). For several years,
the Insiders forced Appalachian Fuels to enter into several transactions that benefitted
themselves at the expense of Appalachian Fuels and its creditors. (Id. at 3). These
transactions shifted valuable assets to the Insiders while leaving any associated liabilities
with Appalachian Fuels. (Id.). This continued even after Appalachian Fuels became
insolvent and had been forced into bankruptcy. (Id.). Thus, the Insiders actually intended
to and did remove assets from the reach of creditors for their own benefit. (Id.).
Defendants ECR, Illinois Fuel, Stephen Addington, Larry Addington, Addington
Land, AMI, Big Sandy, and Task Trucking have each filed proofs of claims against the
Debtor’s estate in the underlying bankruptcy action. Plaintiff’s final claim in the Amended
Complaint is an objection to these proofs of claim. Pursuant to 11 U.S.C. § 502(d), Plaintiff
requests that the Court disallow Defendants’ proofs of claim against the Debtor’s estate.
The remaining Defendants did not file proofs of claim.
On October 19, 2011, the parties entered into a stipulation to designate which of the
claims asserted by the Committee are core and which are non-core.4 This stipulation was
signed by the bankruptcy judge and filed on October 20, 2011. (11-1041; Doc. # 20). The
stipulation specifically notes that all parties entered the stipulation “with the explicit
understanding that they are not endorsing the designation of any other Defendant.” (Id. at
2 n.4). Furthermore, it states that “each Defendant takes no position as to whether any
Defendant Frost Brown Todd declined to enter into the stipulation because it objects to Branch
Banking & Trust’s (BB&T) characterization of its own claims as “core.” Although the stipulation states that
Defendant Gregory “Bernie” Mason participated in the designation of claims, Mason states in his response
in opposition to the motions to withdraw the reference that he did not participate in the stipulation of the
designation of claims.
other Defendant’s designation of claims as core or non-core are correct.” (Id. at 3).
With the exception of Defendant Mason’s First Set of Interrogatories and Requests
for Production of Documents (11-1041; Doc. # 52), discovery has not yet commenced in
the adversary proceeding. Currently pending before the Bankruptcy Court are six motions
to dismiss. (11-1041; Docs. # 53, 58, 61, 64, 68, 130). However, on February 3, 2012, the
Bankruptcy Court ordered that all matters in the adversary proceeding be stayed pending
disposition of the motions to withdraw the reference presently before this Court. (11-1041;
Doc. # 172).
District courts have original and exclusive jurisdiction over “all cases under title 11.”
28 U.S.C. § 1334(a). District courts also have original but not exclusive jurisdiction over
all civil proceedings “arising under title 11” or “arising in or related to cases under title 11.”
§ 1334(b). Proceedings that arise in a bankruptcy case or under title 11 are deemed “core
proceedings,” while those that are otherwise related to a case under title 11 are considered
“non-core proceedings.” Stern v. Marshall, 564 U.S. ----, 131 S. Ct. 2594, 2605 (2011)
(citing 28 U.S.C. § 157(b), (c)). A district court may refer any or all actions within its
bankruptcy jurisdiction to the bankruptcy judges for that district. 28 U.S.C. § 157(a). The
Eastern District of Kentucky’s August 15, 1984 Standing Order requires automatic
reference of all bankruptcy cases to the Bankruptcy Court in this district. Moreover,
pursuant to Local Rule 83.12, all matters arising under or arising in or related to cases
arising under title 11 are referred to the Bankruptcy Court.
A party may move to withdraw the reference to the Bankruptcy Court pursuant to
28 U.S.C. § 157(d), which provides that:
The district court may withdraw, in whole or in part, any case or proceeding
referred under this section, on its own motion or on timely motion of any
party, for cause shown. The district court shall, on timely motion of a party,
so withdraw a proceeding if the court determines that resolution of the
proceeding requires consideration of both title 11 and other laws of the
United States regulating organizations or activities affecting interstate
According to the statute, there are both mandatory and discretionary withdrawals. In the
present case, Plaintiff and moving Defendants assert that discretionary withdrawal is
appropriate. Thus, the Court may grant discretionary withdrawal of the reference if the
motion was “timely,” and the movants have shown “cause.”
Timeliness of the Motions
The first issue is whether the motions to withdraw the reference are timely. 28
U.S.C. § 157(d). Timely refers to “as soon as possible after the moving party is aware of
grounds for withdrawal of reference” or “at the first reasonable opportunity after the moving
party is aware of grounds for withdrawal of reference.” In re Black Diamond Mining Co.,
LLC, No. 10-84, 2010 WL 5173271, at *1 (E.D. Ky. Dec. 14, 2010) (quoting In re Mahlman,
149 B.R. 866, 869 (N.D. Ill. 1993)). The timeliness requirement prevents parties from
“forum shopping, stalling, or otherwise engaging in obstructionist tactics.” Id. (quoting In
re Mahlman, 149 B.R. at 869). This adversary proceeding was initiated on June 22, 2011.
(11-1041; Doc. # 1). Plaintiff’s Amended Complaint was filed on August 19, 2011. (111041; Doc. # 20). The moving parties’ motions to withdraw the reference were filed
between October 31 and November 10, 2011, less than three months after the Amended
(11-1041; Docs. # 63, 71, 73, 76, 77, 91, 100, 106, 110).
Furthermore, at oral argument, counsel for Defendant Frost Brown Todd indicated that the
moving Defendants advised Plaintiff early on that they intended to file motions for
withdrawal of the reference. None of the objecting parties assert that the motions were
untimely, and the Court finds that the motions are timely.
Cause for Withdrawal of the Reference
A district court may grant discretionary withdrawal of reference “for cause shown.”
28 U.S.C. § 157(d). Although “cause” is not defined in the Bankruptcy Code, most courts
consider the following factors to determine whether cause exists: (1) judicial economy; (2)
uniformity in bankruptcy administration; (3) reducing forum shopping and confusion; (4)
fostering economical use of the debtor’s and creditor’s resources; (5) expediting the
bankruptcy process; and (6) the presence of a jury demand. In Re Angelucci, No. 09-70,
2009 WL 798805, at *3 (E.D. Ky. Mar. 23, 2009) (citing Big Rivers Elec. Corp. v. Green
River Coal Co., Inc., 182 B.R. 751, 754 (W.D. Ky. 1995)). Other courts in this circuit have
found that discretionary withdrawal of reference requires a “compelling” cause. See In re
Washington Mfg. Co., 133 B.R. 113, 116 (M.D. Tenn. 1991) (“[O]nly a compelling cause
warrants withdrawal from the automatic reference to bankruptcy under the non-mandatory
provision.”); In re Onyx Motor Car Corp., 116 B.R. 89, 91 (S.D. Ohio 1990) (“Let it be clear,
without truly exceptional and compelling circumstances, a motion for withdrawal of
reference will not be well received by this Court.”). Indeed, when considering § 157(d),
Congress indicated that there was no intention to allow this subsection to become “an
escape hatch through which most bankruptcy matters will be removed to the District Court
from the bankruptcy court.” In re Onyx Motor Car Corp., 116 B.R. at 91 (quoting 100 Cong.
Rec. H1850) (internal quotations omitted).
Furthermore, in considering whether a withdrawal motion should be granted,
“whether a proceeding is core or non-core ... is a central question.” In re Black Diamond
Min. Co., LLC, 2010 WL 5173271, at *2; see also e.g., Boyd v. King Par, LLC, No. 1:11-CV1106, 2011 WL 5509873, at *1 (W.D. Mich. Nov. 10, 2011); Welch v. Gordulic, No. 10-MC37, 2011 WL 2490943, at *1-2 (N.D. Ohio June 22, 2011). “The relevance of the core/noncore distinction is that the bankruptcy court may generally enter final orders and judgment
in core proceedings, but must submit proposed findings of fact and conclusions of law to
the district court in non-core proceedings.” Boyd, 2011 WL 5509873, at *1 (citing 28 U.S.C.
§ 157(b)(1), (c)(1); see also Orion Pictures Corp. v. Showtime Networks, Inc., 4 F.3d 1095,
1101 (2d Cir. 1993) (“A district court considering whether to withdraw the reference should
first evaluate whether the claim is core or non-core, since it is upon this issue that
questions of efficiency and uniformity will turn. ... Thus once a district court makes the
core/non-core determination, it should weigh questions of efficient use of judicial resources,
delay and costs to the parties, uniformity of bankruptcy administration, the prevention of
forum shopping, and other related factors.”). However, whether a proceeding is core or
non-core will not alone determine whether the proceeding must be withdrawn. District
courts may withdraw both core and non-core proceedings. In re Holman, 325 B.R. 569,
572 (E.D. Ky. 2005) (citing 28 U.S.C. § 157(d)).
Under 28 U.S.C. § 157(b)(1), bankruptcy judges may hear and enter final judgments
in “all cases under title 11 and all core proceedings arising under title 11, or arising in a
case under title 11,” subject to discretionary review by the district court under § 158.
Additionally, Congress provided a non-exhaustive list of “core” matters under § 157(b)(2).
For example, core proceedings include: (1) counterclaims by the estate against persons
filing claims against the estate; (2) proceedings to determine, avoid, or recover preferences
and fraudulent conveyances; and (3) orders to turn over property of the estate. 28 U.S.C.
§ 157(b)(2)(C), (E), (F), (H). A bankruptcy judge may also hear non-core proceedings that
are otherwise related to a case under title 11. § 157(c)(1). In such proceedings, the
bankruptcy judge submits “proposed findings of fact and conclusions of law to the district
court, and any final order or judgment shall be entered by the district judge after
considering the bankruptcy judge’s proposed findings and conclusions and after reviewing
de novo those matters to which any party has timely and specifically objected.” Id.
However, with the consent of all parties, the district court may refer non-core proceedings
to a bankruptcy judge to enter final orders and judgments, subject to discretionary review
under § 158. § 157(c)(2).
Several of the moving Defendants argue that the Court should withdraw the
reference of the instant adversary proceeding because it involves, for the most part, noncore claims. In support of their argument, Defendants allege that the Supreme Court’s
recent opinion in Stern v. Marshall, 564 U.S.----, 131 S. Ct. 2594 (2011) invalidates 28
U.S.C. §§ 157(b)(2)(F) and (H) as a basis for bankruptcy courts to enter final orders and
judgments in fraudulent transfer and preference actions where, as here, they have not filed
a proof of claim against the bankruptcy estate.5 There is no disagreement that Plaintiff’s
state law tort claims arising out of Defendants’ alleged corporate waste, breaches of
As stated previously, Defendants Larry Addington, Stephen Addington, Addington Land, AMI, Big
Sandy, ECR, Illinois Fuel, and Task Trucking have all filed proofs of claim in the underlying bankruptcy
proceeding. These Defendants’ arguments will be addressed in turn.
fiduciary duty, civil conspiracy, unjust enrichment, and aid and abetment of other
Defendants in doing the same are clearly non-core claims under § 157(c)(1).
In Stern, the Supreme Court found that Congress’ enumeration of core matters in
§ 157(b)(2) overstepped constitutional boundaries in at least one respect and therefore
determined that “identifying a claim as ‘core’ or ‘non-core’ under [§ 157(b)(2)] does not
necessarily determine whether a bankruptcy court is constitutionally empowered to finally
adjudicate the matter.” Dev. Specialists, Inc. v. Akin Gump Strauss Hauer & Feld LLP, 462
B.R. 457, 464 (S.D.N.Y. 2011). It is worth noting the unique facts of the case. After her
husband died without including her in his will, Vickie Lynn Marshall filed suit in state probate
court alleging that her husband’s son fraudulently induced his father to sign a living trust
that did not include her despite his purported intent to leave her half of his estate. Vickie
then filed for bankruptcy in federal court.
The son filed a complaint in the federal
proceeding, claiming that Vickie had defamed him by inducing her lawyers to tell members
of the press that he had engaged in fraud to gain control of his father’s assets. He sought
a declaration that his defamation claim was not dischargeable in the bankruptcy
proceedings. Then, Vickie filed a counterclaim for tortious interference with the gift she
expected from her deceased husband’s estate.
The Supreme Court found that although the bankruptcy court had statutory authority,
pursuant to § 157(b)(2)(C), to enter a final judgment on the state law counterclaim, it
lacked constitutional authority to do so under Article III. Stern, 131 S. Ct. at 2608. The
Court stated that “[t]he Bankruptcy Court below lacked the constitutional authority to enter
a final judgment on a state law counterclaim that is not resolved in the process of ruling on
a creditor’s proof of claim.” Id. at 2620. The Court emphasized that the issue before it was
a “narrow one” and that its decision would not change “all that much.” Id. (internal
quotations omitted). Furthermore, the Court concluded that “Congress, in one isolated
respect, exceeded the limitation in the Bankruptcy Act of 1984.” Id. (emphasis added).
Statutorily defined core proceedings include “proceedings to determine, avoid, or
recover fraudulent conveyances.” 28 U.S.C. § 157(b)(2)(H). A proceeding under 11 U.S.C.
§ 548, which authorizes a trustee to set aside fraudulent conveyances made within two
years of the filing of a bankruptcy petition, is undoubtedly a core proceeding pursuant to
28 U.S.C. § 157(b)(2)(H). However, whether a state fraudulent transfer claim is also
considered a core proceeding under the statute is less clear. Under 11 U.S.C. § 544, a
trustee may bring a state fraudulent conveyance action to set aside a conveyance that an
unsecured creditor could have set aside under state law. Based upon the plain language
of 28 U.S.C. § 157(b)(2)(H), there is no indication that Congress intended to limit the
statute’s application to only federal fraudulent conveyance proceedings. Moreover, the fact
that the substantive law applied in a § 544 proceeding would be state law is of no
consequence, as “the claim still arises under title 11 because it is the bankruptcy code that
transfers the cause of action from the creditor to the trustee.” XL Sports, Ltd. v. Lawler, 49
F. App’x 13, 21 (6th Cir. 2002) (table) (citing In re Mankin, 823 F.2d 1296, 1298-1300 (9th
Cir. 1987) (concluding that a fraudulent conveyance action under 11 U.S.C. § 544(b), which
gives the trustee the same power to avoid any conveyances which an unsecured creditor
would have under state law, was a core proceeding)); see also In re Bliss Technologies,
Inc., 307 B.R. 598, 604-05 (Bankr. E.D. Mich. 2004). 28 U.S.C. § 157(b)(3) also states that
“[a] determination that a proceeding is not a core proceeding shall not be made solely on
the basis that its resolution may be affected by State law.” Therefore, regardless of
whether the fraudulent transfer claims are brought under § 548 or § 544, they are
considered core claims. XL Sports, Ltd., 49 F. App’x at 21 ; see also Boyd v. King Par,
LLC, No. 1:11-cv-1106, 2011 WL 5509873, at *1 (W.D. Mich. Nov. 10, 2011). Likewise,
pursuant to 28 U.S.C. § 157(b)(2)(F), “proceedings to determine, avoid, or recover
preferences” under § 547 are statutorily defined core proceedings.
The question now becomes whether the holding of Stern renders unconstitutional
fraudulent conveyance and preference proceedings statutorily defined by Congress as
core. First, it should be noted that there is a disagreement among courts regarding the
extent to which Stern will impact the bankruptcy court’s authority to enter final orders and
judgments in other core proceedings. Compare In re Safety Harbor Resort & Spa, 456
B.R. 703 (Bankr. M.D. Fla. 2011) (holding that the bankruptcy court has authority to enter
final judgments in fraudulent transfer actions because nothing in Stern actually limits a
bankruptcy court’s authority to adjudicate the other “core proceedings” identified in §
157(b)(2)) with In re Heller Ehrman LLP, 464 B.R. 348 (N.D. Cal. 2011) (holding that the
bankruptcy court lacks constitutional authority to enter final judgments in fraudulent
conveyance claims).
In its decision, the Supreme Court clearly intended to, and did in fact, limit the
application of its holding. The Court stated:
Article III of the Constitution provides that the judicial power of the United
States may be vested only in courts whose judges enjoy the protections set
forth in that Article. We conclude today that Congress, in one isolated
respect, exceeded that limitation in the Bankruptcy Act of 1984. The
Bankruptcy Court below lacked the constitutional authority to enter a final
judgment on a state law counterclaim that is not resolved in the process of
ruling on a creditor’s proof of claim.
Stern, 131 S. Ct. at 2620 (emphasis added). Notably, the Court did not find that the
bankruptcy court lacked constitutional authority to enter a final judgment on all state law
Further, the Court emphasized that its holding would not
“meaningfully change[] the division of labor” under § 157. Id. Most importantly, “nothing
in the Supreme Court’s opinion actually limits a bankruptcy court’s authority to adjudicate
the other ‘core proceedings’ identified in section 157(b)(2).” In re Safety Harbor Resort &
Spa, 456 B.R. at 715. Indeed, one bankruptcy court has stated that “[t]o broadly apply
Stern’s holding is to create a mountain out of a mole hill.” In re USDigital, Inc., 461 B.R.
276, 292 (Bankr. D. Del. 2011).
Despite the Supreme Court’s intention to limit the application of its holding, several
courts have expressed uncertainty about Stern’s effect on the bankruptcy court’s authority
to enter final orders and judgments in other statutorily defined core proceedings. See e.g.,
In re Appleseed’s Intermediate Holdings, LLC, No. 11-807, 2011 WL 6293251 (D. Del. Dec.
15, 2011); Boyd, LLC, 2011 WL 5509873. Arguably, the Supreme Court’s reliance on
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989)6 has called into question whether
bankruptcy courts can continue to enter final orders and judgments in fraudulent
In Stern, the Court explained that Granfinanciera’s “distinction
between actions that seek ‘to augment the bankruptcy estate’ and those that seek ‘a pro
rata share of the bankruptcy res’ reaffirms that Congress may not bypass Article III simply
because a proceeding may have some bearing on a bankruptcy case ... .” Stern, 131 S.
The issue in Granfinanciera was whether the Seventh Amendment grants certain defendants a right
to a jury trial in an action by a trustee to avoid fraudulent transfers. The Court stated that defendants were
entitled to a jury trial on the fraudulent conveyance proceeding unless the claim fell within the public rights
doctrine. Granfinanciera, 492 U.S. at 56. The Court held that a fraudulent conveyance action against a
defendant who had not filed a proof of claim against the bankruptcy estate did not fall within the “public rights”
exception. Id.
Ct. at 2618 (quoting Granfinanciera, 492 U.S. at 56) (internal citations omitted) (emphasis
in the original)). Moreover, the Court stressed that the “question is whether the action at
issue stems from the bankruptcy itself or would necessarily be resolved in the claims
allowance process.” Id. Many courts have viewed this language as a “new limit on the
Court’s constitutional authority to finally resolve other ‘core’ proceedings, such as fraudulent
conveyance or preference actions.” In re Safety Harbor Resort & Spa, 456 B.R. at 717.
However, despite the reliance on Granfinanciera in Stern, the fact still remains that
the sole issue in Granfinanciera was whether defendants who had not filed a proof of claim
against the bankruptcy estate had a Seventh Amendment jury trial right in light of statutory
authority that allowed a non-Article III tribunal to adjudicate the claims against them.
Granfinanciera, 492 U.S. at 50 (“We are not obliged to decide today whether bankruptcy
courts may conduct jury trials in fraudulent conveyance suits brought by a trustee against
a person who has not entered a claim against the estate, either in the rare procedural
posture of this case or under the current statutory scheme. Nor need we decide whether,
if Congress has authorized bankruptcy courts to hold jury trials in such actions, that
authorization comports with Article III when non-Article III judges preside over the actions
subject to review in, or withdrawal by, the district courts. ... The sole issue before us is
whether the Seventh Amendment confers on petitioners a right to a jury trial in the face of
Congress’ decision to allow a non-Article III tribunal to adjudicate the claims against them.”
(internal citations omitted)). Furthermore, Granfinanciera has been the law for over twenty
years, and it was not until after the Court’s decision in Stern that the bankruptcy court’s
authority to enter final orders and judgments in fraudulent conveyance or preference
actions has been challenged. In re Safety Harbor Resort & Spa, 456 B.R. at 717.
Taking the specific facts and issues in Stern and Granfinanciera into consideration,
in addition to the Supreme Court’s deliberate attempt to limit the scope of its holdings in
both cases, this Court cannot extend the holding of Stern to fraudulent conveyance and
preference actions. The statutorily core claim examined in Stern was a counterclaim based
on state tort law and was “in no way derived from or dependent upon bankruptcy law.” See
Stern, 131 S. Ct. at 2618. In the present proceeding, Plaintiff’s fraudulent conveyance and
preference claims “arise under” the Bankruptcy Code, or at least, “arise in” a bankruptcy
case. See 11 U.S.C. §§ 544, 547, 548, 550. The Stern decision itself acknowledged that
whether a matter is core requires a consideration of “whether the action at issue stems
from the bankruptcy itself” or is “derived from or dependent upon bankruptcy law ... .”
Stern, 131 S. Ct. at 2618. Moreover, but for the bankruptcy, Plaintiff could not assert the
fraudulent conveyance and preference claims against Defendants. See In re Heller
Ehrman LLP, No. 08-32514, 2011 WL 4542512, at *5 (Bankr. N.D. Cal. Sept. 28, 2011)
(citing In re Mankin, 823 F.2d at 1307 n.4) (Fraudulent transfer claims “cannot exist but for
the debtor’s insolvency, its inability to pay debts as they become due, or its unreasonably
small capital–conditions which generally result in a bankruptcy.”). Accordingly, Plaintiff’s
fraudulent transfer and preference claims are statutorily defined core claims to which the
holding of Stern does not apply, and therefore the Bankruptcy Court has authority to enter
final orders and judgments on such claims pursuant to 28 U.S.C. § 157(b)(1).
Next, Defendants ECR, Illinois Fuel, and Stephen Addington argue that despite the
fact that they have all filed proofs of claim against the Debtor’s estate, it would be
unconstitutional for the Bankruptcy Court to enter final orders and judgments against them.
Katchen v. Landy, 382 U.S. 323 (1966) and Lagenkamp v. Culp, 498 U.S. 42 (1990) held
that bankruptcy courts have the power to rule, without a jury trial, on avoidable preference
claims against creditors who have filed proofs of claims against the bankruptcy estate.
These Defendants assert that Katchen and Lagenkamp should be reconsidered in light of
the fact that they rest on a faulty, previously unchallenged presumption, namely that
bankruptcy courts have constitutional authority to rule on the validity of proofs of claim in
the first place. It appears that no party has asked the Supreme Court to consider whether
non-Article III bankruptcy courts are constitutionally permitted to determine whether to allow
creditor’s claims. Defendants contend that this is supported by footnote 7 from Stern and
footnote 11 from Granfinanciera, where the Court noted that the parties to those cases had
not requested reconsideration of the public rights framework for bankruptcy. See Stern,
131 S. Ct. at 2614 n.7 (“We noted that we did not mean to ‘suggest that the restructuring
of debtor-creditor relations is in fact a public right.’” (quoting Granfinanciera, 492 U.S. at 56
n.11)). For these reasons, Defendants ask this Court to overrule Katchen and Lagenkamp
or distinguish them on the grounds that the parties therein did not contest the bankruptcy
court’s authority to rule on the validity of a proof of claim. The Court refuses to do so.
Defendants are in essence asking the Court to consider the entire constitutionality
of 28 U.S.C. § 157 and whether bankruptcy judges have the authority to not only adjudicate
some but all bankruptcy matters. Unless and until the Supreme Court rules that § 157 is
unconstitutional, this Court will continue to adhere to its principles. Since Defendants Larry
Addington, Stephen Addington, Addington Land, AMI, Big Sandy, ECR, Illinois Fuel, and
Task Trucking have all filed proofs of claim against the bankruptcy estate, Plaintiff’s
fraudulent conveyance and preferential transfer claims arise out of the claims allowance
process, and therefore the Bankruptcy Court has authority to enter final orders and
judgments on such claims. See In re Washington Mfg. Co., 133 B.R. at 117 (“This result
follows from the reasoning that once a creditor makes a claim in bankruptcy, the fraudulent
conveyance issue becomes closely intertwined with the federal regulatory scheme of
bankruptcy, and thus may be adjudicated by a non-Article III court without a jury.” (citing
Granfinanciera, 492 U.S. at 54-55)).
Finally, Defendant BB&T, who has filed a response in opposition to Plaintiff’s and
moving Defendants’ motions to withdraw, argues that Stern has created a “no-man’s land”
of statutorily defined core claims that cannot be tried at all in the federal court system
absent some other jurisdictional basis, because the Bankruptcy Court is not statutorily
empowered to treat a core claim in the same manner as a claim falling within 28 U.S.C. §
157(c)(1), i.e., a non-core claim. Thus, BB&T argues that if the Court does not sever the
core claims against BB&T and allow them to remain in the Bankruptcy Court, the Court
must dismiss these claims against BB&T for lack of jurisdiction as part of a withdrawal of
the remainder of the case.7 This argument is without merit.
This Court’s jurisdiction over bankruptcy matters stems from 28 U.S.C. § 1334, not
§ 157. Pursuant to § 1334, the Court has original jurisdiction over bankruptcy cases and
all civil proceedings “arising under title 11, or arising in or related to cases under title 11.”
§ 157(a) then allows this Court to refer actions within its bankruptcy jurisdiction to the
bankruptcy judges of this district. Thus, BB&T’s argument that the core claims against it
must remain in Bankruptcy Court or be dismissed from this Court for lack of jurisdiction is
wholly incorrect. If this Court does not have jurisdiction over this proceeding pursuant to
Defendant BB&T asserts that the claims against it are “core” based on the stipulation entered by the
Bankruptcy Court (11-01041; Doc. # 50).
§ 1334, then the Bankruptcy Court also lacks jurisdiction to hear the case.
BB&T’s argument also raises an issue that has recently been addressed in several
bankruptcy cases post-Stern, namely that if there are statutorily defined core claims that
the bankruptcy courts cannot finally adjudicate, there is no statutory authority to allow them
to submit proposed findings of fact and conclusions of law to the district court on such
claims. This argument is unpersuasive and has been repeatedly rejected by numerous
bankruptcy and district courts.
In Stern, the Supreme Court specifically stated that the “removal of counterclaims
such as [debtor’s] from core bankruptcy jurisdiction [does not] meaningfully change[] the
division of labor in [ § 157].” Stern, 131 S. Ct. at 2620. Since Congress delegated broader
authority to bankruptcy courts in core matters than in non-core matters, including the
authority to hear and determine all cases and enter appropriate orders, it simply would not
make sense to preclude bankruptcy courts from also submitting proposed findings of fact
and conclusions of law to the district court on core matters.
“Removing fraudulent
conveyance actions from core bankruptcy jurisdiction, and also determining bankruptcy
courts could not enter proposed findings of fact and conclusions of law on such actions,
would meaningfully change the division of labor in the statute between bankruptcy and
district courts.” In re Heller Ehrman LLP, 464 B.R. 348, 355-56 (N.D. Cal. Dec. 13, 2011).
Moreover, as stated above, § 157(a) allows district courts to refer actions within its
bankruptcy jurisdiction to the bankruptcy judges of their districts, so the distinction between
core or non-core is immaterial. Indeed, several courts have reached this same conclusion.
See e.g., In re Rothstein, Rosenfeldt, Adler, P.A., No. 11-62612, 2012 WL 882497, at *3
(S.D. Fla. Mar. 14, 2012) (“[T]he majority of district and bankruptcy courts that have
addressed this argument conclude that what is certain is that the Supreme Court did not
intend to deprive the bankruptcy courts of any role in dealing with fraudulent conveyance
actions.”); In re Tolliver, 464 B.R. 720, 734-35 (Bankr. E.D. Ky. Feb. 2, 2012) (“[T]he Court
expressly rejects the conclusion ... that it has no statutory authority to render findings of fact
and conclusion[s] of law for core proceedings that it may not constitutionally hear.”);
Adelphia Recovery Trust v. FLP Group, Inc., No. 11-6847, 2012 WL 264180, at *6-7
(S.D.N.Y. Jan. 30, 2012) (holding that bankruptcy courts may issue proposed findings of
facts and conclusions of law in fraudulent transfer actions); In re The Mortgage Store, Inc.,
No. 11-0439, 2011 WL 5056990, at *6 (D. Haw. Oct. 5, 2011) (“[T]he court has little
difficulty in finding that Congress, if faced with the prospect that bankruptcy courts could
not enter final judgments on certain “core” proceedings, would have intended them to fall
within 28 U.S.C. § 157(c)(1) granting bankruptcy courts authority to enter findings and
recommendations.”).
One final matter deserves brief comment. In the present case, a majority of the
parties entered into a stipulation designating the numerous claims against each Defendant
as either core or non-core, and the stipulation was thereafter filed by the Bankruptcy Court.
(11-1041; Doc. # 20). Defendant Frost Brown Todd did not participate in the stipulation.
Moreover, each Defendant took no position as to whether any other Defendant’s
designation of claims as core or non-core was correct. Indeed, in Defendants Horsepower
Leasing, EBA Development, Bruce Addington, and Erik Addington’s Reply to the Response
filed by BB&T and in further support of their Motion to Withdraw the Reference (11-129;
Doc. # 10), they argue that the claims asserted against BB&T are incorrectly classified as
core claims. Despite the stipulation filed by the Bankruptcy Court, in deciding whether to
withdraw the reference, this Court is not bound by the Bankruptcy Court’s determination
of the core/non-core issues. See In re Enron Creditors Recovery Corp., 410 B.R. 374, 37980 (S.D.N.Y. 2008) (“A motion to withdraw the reference, which is addressed to the sound
discretion of the District Court, permits that court to address the full range of issues relating
to the proper forum in which to litigate the pending dispute. ... [T]he District Court does not
engage in appellate ‘review’ of any determination of the Bankruptcy Court; it simply
addresses a legal issue relevant to its own exercise of discretion with respect to the division
of labor between the District Court and its bankruptcy subdivision.”). Furthermore, at oral
argument, counsel for Frost Brown Todd indicated that the stipulation was simply done as
a formality so the parties would be able to file their motions to withdraw. Each party
unilaterally designated its own claims, and Judge Scott made no independent determination
regarding the designation of claims as core or non-core. Therefore, the Court need not
In conclusion, the Court finds that the holding of Stern does not apply to the
fraudulent transfer and preference claims in Plaintiff’s Amended Complaint. Therefore,
core claims predominate in this case, and this factor weighs in favor of denying the motions
However, even if the Supreme Court subsequently found that it was
unconstitutional for bankruptcy judges to enter final orders and judgments on fraudulent
transfer and preference proceedings, they would still have the authority to submit proposed
findings of fact and conclusions of law to the district court on these matters.
Other Factors for the Court to Consider
As discussed above, courts should consider the following factors when determining
whether cause exists for permissive withdrawal of the reference: (1) judicial economy; (2)
bankruptcy process; and (6) the presence of a jury demand. In Re Angelucci, 2009 WL
798805, at *3 (citing Big Rivers Elec. Corp., 182 B.R. at 754). Since none of the parties
have made allegations of forum shopping and no evidence has been presented on the
issue, the Court need not address this factor.
Given that bankruptcy cases are regularly handled by bankruptcy judges and that
they have special expertise in handling these particular cases, withdrawing the reference
would not promote judicial economy or uniformity in bankruptcy administration. The claims
against Defendants are, for the most part, quintessential core bankruptcy claims, including
claims to recover preferences and fraudulent transfers under 28 U.S.C. § 157(b)(2)(F), (H).
Of the 107 counts asserted by Plaintiff, the majority are for avoidance and/or recovery of
fraudulent transfers and are premised on Sections 544, 548 and 550 of the Bankruptcy
Code.8 As stated above, such adversary proceedings are clearly core proceedings within
the meaning of § 157(b)(2)(H). See Kelley v. JPMorgan Chase & Co., 464 B.R. 854, 863
(D. Minn. 2011) (quoting In re Wencl, 71 B.R. 879, 882 (Bankr. D. Minn. 1987) (“In point
of fact, the process of garnering fraudulently-transferred assets back into the bankruptcy
Although the moving parties assert that the non-core claims predominate from a monetary
perspective, those claims seek to recover damages for various state law theories of liability. Because the
alleged damages which flow from the non-core claims are based on a purported long-term fraudulent scheme,
when compared to the core claims which only include specific monetary transfers to various defendants, it is
not surprising that the recovery sought for the non-core claims is significantly higher than the amount sought
to be recovered for core claims. Despite the moving parties’ arguments to the contrary, that disparity does
not tip the scales in favor of withdrawal.
estate–to the resultant benefit of all creditors–is one of those proceedings which is by its
very nature essential to the adjustment and restructuring of debtor-creditor relationships
that is at the core of federal bankruptcy jurisdiction.”)); see also Adelphia Recovery Trust
v. FLP Group, Inc., No. 11-cv-6847, 2012 WL 264180, at *7 (S.D.N.Y. Jan. 30, 2012) (“The
Bankruptcy Court has a wealth of knowledge and experience with fraudulent transfer claims
... .”).
The Court finds that the judicial economy and uniformity in bankruptcy administration
factors weigh in favor of denying the moving parties’ motions to withdraw.9 Withdrawal of
the reference at this early stage of the litigation would result in losing the benefit of the
Bankruptcy Court’s expertise in both the law and facts. This proceeding is in its early
stages. However, Judge Scott has presided over the underlying bankruptcy action since
2009. Since that time, there have been numerous adversary proceedings filed. Allowing
the case to remain with the Bankruptcy Court means that the discovery issues, settlement
conferences and motion practice will be supervised most efficiently by the same court that
is currently supervising the other adversary proceedings filed in connection with the
bankruptcy estate. Although Judge Scott may not have any specific knowledge of the facts
of this adversary proceeding because discovery has yet to commence, he has expansive
knowledge of the Debtor’s estate and several of the Defendants who have filed proofs of
claim against the estate. Moreover, it is not Judge Scott’s familiarity with the facts of this
case, but rather the Bankruptcy Court’s particularized knowledge of bankruptcy matters in
general, that convinces the Court that judicial economy and uniformity in bankruptcy
The Court also finds that the expediting the bankruptcy process factor coincides with the Court’s
analysis of the judicial economy and uniformity in bankruptcy administration factors.
administration would be best served by allowing this case to remain in the Bankruptcy
Court for pretrial proceedings.10
Furthermore, since a majority of the claims are core, the bankruptcy judge has the
authority to enter final orders and judgments on these claims. As for the non-core claims,
even though the bankruptcy judge may only issue proposed findings of fact and
conclusions of law, these recommendations “will narrow the issues to be resolved by this
Court.” In re Extended Stay, Inc., --- B.R.----, 2011 WL 5532258, at *9-10 (S.D.N.Y. Nov.
10, 2011) (The court’s review of the bankruptcy court’s findings of fact and conclusions of
law is not outside “the usual process,” since “[p]arties frequently appeal bankruptcy court
decisions to the district court” and district courts frequently review reports and
recommendations from Article I tribunals, such as magistrate courts.). Finally, keeping the
case with the Bankruptcy Court accords with the Supreme Court’s statement in Stern that
the decision does not “meaningfully change[] the division of labor” in 28 U.S.C. § 157
between the bankruptcy and district courts. Stern, 131 S. Ct. at 2620. Accordingly, the
Court finds that judicial economy and uniformity in the administration of bankruptcy would
not be served by withdrawing the reference at this time.
Costs to the Parties
The moving parties argue that handling all claims in one venue would be an
economical use of all parties’ resources. Moreover, since discovery has not commenced,
they assert that withdrawal of the reference will not cause any additional undue burden,
delay or cost to the parties. Given the considerations above concerning judicial economy
For the same reason, the upcoming retirement of Judge Scott in October 2012 does not compel
the granting of the motions to withdraw the reference.
and uniformity in the administration of bankruptcy, the Court finds this argument
unpersuasive. Even if this Court is ultimately needed to adjudicate or preside over a jury
trial on certain claims, it is not clear that this would cause unnecessary delay and costs,
especially considering the efficiency of having the Bankruptcy Court handle all pre-trial
matters in the first instance. Furthermore, Judge Scott’s upcoming retirement in October
2012, while certainly relevant to the Court’s consideration, is not dispositive of the Court’s
adjudication of the motions to withdraw the reference.
Also relevant to the inquiry is whether Defendants are entitled to a jury trial and, if
so, whether the trial is likely and whether the Bankruptcy Court has the power to hold such
a jury trial. In re Orion Pictures Corp., 4 F.3d 1095, 1101-02 (2d Cir. 1993). The
Bankruptcy Court may only hold a jury trial if all the parties so agree and the bankruptcy
judge is “specially designated to exercise such jurisdiction by the district court.” 28 U.S.C.
§ 157(e). In the present case, although Plaintiff has consented to a jury trial before the
Bankruptcy Court, none of the Defendants have done so besides BB&T.
In the present matter, it is undisputed that several Defendants are entitled to a jury
trial. A creditor who has not filed a proof of claim in the underlying debtor’s bankruptcy
proceedings has a Seventh Amendment right to a jury trial when the trustee of the
bankruptcy estate sues the creditor in district court to recover monies for an actual or
constructive fraudulent conveyance under 11 U.S.C. § 548(a). Granfinanciera,, 492 U.S.
at 56. The right to a jury trial exists despite the statutory designation of fraudulent
conveyance actions as “core proceedings.” 28 U.S.C. § 157(b)(2)(H). The Supreme Court
ruled that although Congress may assign jurisdiction over claims asserting a “public” right,
Congress lacks the power to deny parties asserting “private” rights of their constitutional
right to a jury trial. The Court stated that fraudulent transfer suits are “quintessentially suits
at common law that more nearly resemble state-law contract claims brought by a [debtor]
corporation to augment the bankruptcy estate than they do creditors’ hierarchically ordered
claims to a pro rata share of the bankruptcy res” and therefore concluded that a bankruptcy
trustee’s right to recover a fraudulent conveyance is more accurately characterized as a
private right rather than a public right. Granfinanciera, 492 U.S. at 56.
Following Granfinanciera, the Supreme Court reiterated its ruling that defendants
who had filed proofs of claim in the underlying bankruptcy action were not entitled to a jury
trial in a preference action. Lagenkamp v. Culp, 498 U.S. 42, 44 (1990). The Court found
that if the creditor filed a proof of claim and was then met with a preference action, “that
action becomes part of the claims-allowance process which is triable only in equity.” Id.
“In other words, the creditor’s claim and the ensuing preference action by the trustee
become integral to the restructuring of the debtor-creditor relationship through the
bankruptcy court’s equity jurisdiction.” Id. (emphasis in the original). Thus, there is no
Seventh Amendment right to a jury trial for defendants who had filed proofs of claim in the
underlying bankruptcy action. Id.
As stated above, most of the Defendants in this proceeding have not filed proofs of
claim against the bankruptcy estate. Accordingly, these Defendants are entitled to a jury
trial on the fraudulent conveyance and preferential transfer claims. However, Defendants
ECR, Illinois Fuel, Stephen Addington, Larry Addington, Addington Land, AMI, Big Sandy,
and Task Trucking have all filed proofs of claim in the underlying bankruptcy action and are
therefore not entitled to a jury trial on such claims.
Several of the moving Defendants argue that their right to a jury trial weighs heavily
in favor of withdrawal of the reference. Because these Defendants did not consent to a jury
trial in the Bankruptcy Court, they contend the Bankruptcy Court lacks jurisdiction to
conduct the trial and therefore the case should be withdrawn to the district court. While the
Defendants are correct that the Bankruptcy Court lacks the authority to conduct a jury trial
without the consent of all of the parties, the Court disagrees that this factor compels
withdrawal of the reference at this juncture. The parties’ right to a jury trial does not
remove the bankruptcy judge’s authority to enter final orders and judgments when
necessary in core proceedings. See In re Petters Co., Inc., 440 B.R. 805, 810 (Bankr. D.
Minn. 2010) (“In the case of a proceeding where a party is entitled to a jury trial, the
bankruptcy judge will retain authority over the proceeding until–at the earliest–it is
established that a trial is necessary–i.e., all possibility of resolution via summary
adjudication under Rule 56 or otherwise has been exhausted.”).
In In re Healthcentral.com, 504 F.3d 775, 787 (9th Cir. 2007), the Ninth Circuit
examined cases from numerous courts that had addressed the issue of whether, once a
jury request is made, a bankruptcy court must relinquish jurisdiction and the case be
transferred to the district court. “Universally these courts have all reached the same
holding, that is, a Seventh Amendment jury trial right does not mean the bankruptcy court
must instantly give up jurisdiction and that the case must be transferred to the district
court.” Id. Rather, the bankruptcy court may retain jurisdiction over the matter for pre-trial
proceedings. The rationale for such a holding was stated as follows:
First, allowing the bankruptcy court to retain jurisdiction over pre-trial matters,
does not abridge a party’s Seventh Amendment right to a jury trial. ... A
bankruptcy court’s pre-trial management will likely include matters of
“discovery,” “pre-trial conferences,” and routine “motions,” which obviously
do not diminish a party’s right to a jury trial. ... Moreover, even if a bankruptcy
court were to rule on a dispositive motion, it would not affect a party’s
Seventh Amendment right to a jury trial, as these motions merely address
whether trial is necessary at all.
Second, requiring that an action be immediately transferred to district court
simply because of a jury trial right would run counter to our bankruptcy
system. ... Under our current system Congress has empowered the
bankruptcy courts to “hear” Title 11 actions, and in most cases enter relevant
“orders.” As has been explained before, this system promotes judicial
economy and efficiency by making use of the bankruptcy court’s unique
knowledge of Title 11 and familiarity with the actions before them. ...
Accordingly, if we were to require an action’s immediate transfer to district
court simply because there is a jury trial right we would effectively subvert
this system. Only by allowing the bankruptcy court to retain jurisdiction over
the action until trial is actually ready do we ensure that our bankruptcy
system is carried out.
Id. at 787-88 (internal citations omitted). Thus, even if withdrawal of the reference is
ultimately necessary for a jury trial, the court need not withdraw the reference immediately.
Withdrawal of the reference is the exception to the general rule that bankruptcy
matters should be adjudicated in the bankruptcy court. Container Recycling Alliance v.
Lassman, 359 B.R. 358, 360 (D. Mass. 2007). For the reasons stated herein, because
withdrawal is not required at this time, and the moving parties have not shown cause for
immediate withdrawal of the reference to the Bankruptcy Court, Defendant Business
Aircraft Leasing, Inc.’s Motion to Withdraw the Reference (11-128; Doc. # 1), Defendants
Bruce Addington, Erik Addington, EBA Development LLC, and Horsepower Leasing, LLC’s
Motion to Withdraw the Reference (11-129; Doc. # 1), Defendants Machinery Sales and
Service, LLC, John C. Smith, and Jeffrey Muncy’s Motion to Withdraw the Reference (1127
130; Doc. # 1), Defendants Energy Coal Resources, Inc., Illinois Fuel Company, Inc., and
Inc., Big Sandy Properties, LLC, Carbon Fuels Illinois, LLC, Larry Austin Dickerson,
Reference (11-136; Doc. # 1) are hereby DENIED.
G:\DATA\Opinions\Ashland\0-11-128-136 MOO Denying Motions to Withdraw.wpd