Opinion ID: 725498
Heading Depth: 2
Heading Rank: 4

Heading: Withdrawal of the Reference to the Bankruptcy Court

Text: 23 After the district court found that the bankruptcy court had erred in denying the third extension motion, it ruled on the merits of the motion, stating that Burger Boys would have an additional fifteen days to make an election to assume or reject the lease. The district court further stated that it did not believe it's necessary to withdraw the reference in order to make these modifications but [if] it be adjudged that is so, then the reference is withdrawn only to the extent of making the order hereby to be entered. 24 We agree with South Street that, before deciding the merits of the third extension motion, the district court was required to withdraw its reference from the bankruptcy court. The district court's initial jurisdiction over this matter stems from 28 U.S.C. § 158(a), which grants to district courts jurisdiction over appeals from final judgments, orders, and decrees of bankruptcy courts. Acting in this appellate role, the district court only had the power to review the bankruptcy court's determination of the third extension motion, either affirming, modifying, or reversing the bankruptcy court's order. See Bankr.R. 8013; In re Bodine, 190 B.R. 759, 762 (S.D.N.Y.1995). As we noted above, the determination of whether cause existed for an extension of time required not just resolution of questions of law, but findings on factual issues that are disputed by the parties, such as whether Burger Boys already had been given sufficient time to make a decision. The district court, acting in its appellate capacity, could not make these decisions, and therefore it would have been error for it to decide the third extension motion de novo in its appellate capacity. See In re Cohn, 54 F.3d 1108, 1113 (3d Cir.1995) (error for a district court acting in its appellate capacity to make its own factual findings); In re Batie, 995 F.2d 85, 88 (6th Cir.1993) (district court bound by bankruptcy court's factual findings unless they are clearly erroneous). 25 The district court could obtain jurisdiction over the merits of the third extension motion by withdrawing the reference to the bankruptcy court pursuant to 28 U.S.C. § 157(d). Withdrawal under § 157(d) requires a showing of cause, a term which § 157(d) does not define. See In re Pruitt, 910 F.2d 1160, 1168 (3d Cir.1990). We have previously held, however, that in deciding whether to withdraw an issue from the bankruptcy court, the district court should weigh several factors, of which the first is the most important: (1) whether the claim is core or non-core, (2) what is the most efficient use of judicial resources, (3) what is the delay and what are the costs to the parties, (4) what will promote uniformity of bankruptcy administration, (5) what will prevent forum shopping, and (6) other related factors. In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir.1993), cert. dismissed, --- U.S. ----, 114 S.Ct. 1418, 128 L.Ed.2d 88 (1994); see also Pruitt, 910 F.2d at 1168 (citing Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 999 (5th Cir.1985)). 26 The district court, in stating its reasons for deciding the third extension motion rather than remanding it to the bankruptcy court, did not expressly recite all of the Orion factors. However, the district court's failure to do so is not fatal to the district court's decision. See, e.g., Brown v. E.F. Hutton Group, Inc., 991 F.2d 1020, 1032 (2d Cir.1993) (holding that remand not required even where district court did not recite all factors as to whether reliance by investors on a representation was justified). In this case, there was no dispute concerning the first factor because the decision to grant or deny the motion for an extension of time is plainly a core bankruptcy matter, see Orion, 4 F.3d at 1102, and the district court explicitly discussed the second and third factors--the efficient use of judicial resources and the delay and costs to the parties. Furthermore, because the district court withdrew the reference sua sponte, there was no concern that either party was engaged in forum shopping. Finally, under the circumstances of this litigation, the district court's limited withdrawal of the reference as to this single issue posed no threat to the uniformity of the administration of this estate. Although it would have been preferable for the district court to have discussed the Orion factors in greater detail, on this record we find no error in the decision to withdraw the reference from the bankruptcy court. 27