Opinion ID: 2780845
Heading Depth: 3
Heading Rank: 1

Heading: Adversary Proceeding

Text: The Federal Rules of Bankruptcy Procedure distinguish between adversary proceedings and contested matters. Adversary proceedings under Rule 7001 incorporate much of the Federal Rules of Civil Procedure. See Fed. R. Bankr. P. 7001 advisory committee’s note. Rule 7001 lists ten types of matters which must be brought as adversary proceedings, including “proceeding[s] to determine the validity, priority, or extent of a lien or other interest in property . . . .” Fed. R. Bankr. P. 7001(2). In contrast, contested matters are subject to less elaborate procedures specified in Rule 9014. “In a contested matter not otherwise governed by these rules, relief shall be requested by motion, and reasonable notice and opportunity for hearing shall be afforded the party against whom relief is sought.” Fed. R. Bankr. P. 9014(a). Contrary to the Zeltser Group’s argument, the bankruptcy court’s determination of the ownership issue was not a “proceeding to determine the validity . . . [of an] interest in property” under Rule 7001(2), and thus an adversary proceeding was not required. The validity of the $32 million debt alleged by the Petitioning Creditors, the only property interest at stake here, has not yet been adjudicated. The bankruptcy court resolved the threshold issue of ownership for purposes of determining who was authorized to represent the Alleged Debtors with respect to that debt. Furthermore, the bankruptcy court afforded the parties with 47 Case: 12-15595 Date Filed: 02/20/2015 Page: 48 of 57 essentially the same procedural protections applicable in adversary proceedings, providing the Zeltser Group with more than adequate “notice and opportunity for hearing.” See Fed. R. Bankr. P. 9014(a). Accordingly, the bankruptcy court did not err in allowing the ownership issue to proceed as a contested matter.