Court Opinion

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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

9-19-2008

In Re: Exide Tech
Precedential or Non-Precedential: Precedential

Docket No. 07-2230

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Recommended Citation
"In Re: Exide Tech " (2008). 2008 Decisions. Paper 436.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/436

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                                      PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT
                 ________

                    No. 07-2230
                    _________

         IN RE: EXIDE TECHNOLOGIES,
                REORGANIZED DEBTOR

   PACIFIC DUNLOP HOLDINGS (USA) INC.;
PACIFIC DUNLOP HOLDINGS (EUROPE) LIMITED;
      PD INTERNATIONAL PTY LIMITED;
  PACIFIC DUNLOP HOLDINGS (HONG KONG)
                LIMITED;
 PACIFIC DUNLOP HOLDINGS (SINGAPORE) PTE
                 LIMITED,

                                    Appellants

 *(Amended in accordance with the Clerk's Order dated
                    07/30/07)

                     _________
      On Appeal from the United States District Court
                for the District of Delaware
               (D.C. Civil No. 05-cv-00561)
        District Judge: Honorable Sue L. Robinson
                        __________

                  Argued June 30, 2008

 Before: RENDELL, SMITH, and FISHER, Circuit Judges

               (Filed: September 19, 2008 )

Douglas N. Candeub, Esq. [ARGUED]
Brett D. Fallon, Esq.
Morris James
500 Delaware Avenue, Suite 1500
P. O. Box 2306
Wilmington, DE 19899

Counsel for Plaintiffs-Appellants
  Pacific Dunlop Holdings (Usa) Inc.;
  Pacific Dunlop Holdings (Europe) Limited;
  PD International PTY Limited;
  Pacific Dunlop Holdings (Hong Kong) Limited;
  Pacific Dunlop Holdings (Singapore) PTE Limited

                            2
Benjamin G. Chew, Esq.    [ARGUED]
Andrew Zimmitti, Esq.
Patton Boggs
2550 M Street, N.W.
Washington, DC 20037

Laura D.Jones, Esq.
James E. O’Neill, Esq.
Pachulski Stang Diehl & Jones
919 North Market Street, 17th floor
P. O. Box 8705
Wilmington, DE 19801

Counsel for Reorganized Debtor-Appellee
  Exide Technologies

                         __________

                OPINION OF THE COURT
                      __________

RENDELL, Circuit Judge.

       Appellants, Pacific Dunlop Holdings (USA), Inc. (“PDH
USA”), and four of its foreign affiliates, Pacific Dunlop
Holdings (Europe) Limited (“PDH Europe”), P.D. International
Pty Limited (“PD Int’l”), Pacific Dunlop Holdings (Hong Kong)
Limited (“PDH Hong Kong”), and Pacific Dunlop Holdings

                              3
(Singapore) Pte. Ltd. (“PDH Singapore”) (collectively, the
“PDH Foreign Entities”), appeal the Bankruptcy Court’s denial
of their motion to remand to state court, and/or abstain from,
their claims against three foreign subsidiaries of Exide
Technologies, f/k/a Exide Corporation (“Exide”) – namely,
Exide Holding Europe (“Exide Europe”), Exide Holding Asia
Pte. Limited (“Exide Asia”), and Exide Singapore Pte. Ltd.,
f/k/a Bluewall Pte. Ltd. (“Exide Singapore”) (collectively, the
“Exide Foreign Entities”) – and their motion for reconsideration.

        The crux of the appeal is whether the Bankruptcy Court
properly decided that the state law cause of action between non-
debtor parties, the PDH Foreign Entities and the Exide Foreign
Entities, was a “core” bankruptcy proceeding under 28 U.S.C.
§§ 157(b)(2)(B) and (C) over which exclusive bankruptcy
jurisdiction was appropriate. For the reasons that follow, we
conclude that the Bankruptcy Court erred and we will vacate and
remand for further proceedings.

               I. Facts and Procedural History

       PDH USA and PDH Foreign Entities, collectively, owned
the GNB Companies (“GNB”), a global automotive and
industrial battery business; each of the PDH entities owned
portions of GNB in designated territories around the world. In
May and June of 2000, PDH USA and the PDH Foreign Entities
entered into a series of sale agreements to sell their interests in
GNB to Exide and the Exide Foreign Entities. PDH USA sold

                                4
its interests in GNB to Exide, and each of the four PDH Foreign
Entities sold its respective interests to the three Exide Foreign
Entities.1 Separate agreements were concluded between the
companies’ counterparts. Each agreement provided that
“Buyer’s sole and exclusive indemnification obligations under
this Agreement are set forth in the Coordinating Agreement.”
App. 257, 286, 344, 389, 434. On May 9, 2000, the
Coordinating Agreement was concluded and, inter alia, set forth
procedures to deal with potential disputes, including various
provisions addressing venue, submission to jurisdiction, and
governing law. App. 565. It included a forum selection clause,
pursuant to which any claims arising under the agreement were
to be filed in “a state or federal court located in the County of
Cook, State of Illinois.” App. 582.

      According to the PDH entities, after the sale’s closing,
Exide and the foreign entities swept GNB’s cash accounts and
appropriated approximately $16.6 million of cash at hand that
was due to the sellers under the sales agreements. The PDH

    1
       PDH Singapore sold its interests to two Exide entities,
entering into the India Agreement with Exide Asia and the
Singapore Agreement with Exide Singapore. PDH Hong Kong
sold its interests to Exide Asia under the Hong Kong/PRC
Agreement. PDH Europe sold a portion of its GNB interests to
Exide Europe under the UK Agreement and sold the remainder
of its interests, jointly with PD Int’l, to Exide Europe under the
Europe Agreement.

                                5
entities reportedly asked that the cash be released to them, but
the Exide entities refused all such requests.

       Thus, on July 21, 2001, the PDH entities filed suit against
the Exide entities in the Circuit Court of Cook County, Illinois,
alleging breach of contract, unjust enrichment, and conversion.2
The specific claims and amounts were as follows:

       •      PDH Singapore against Exide Asia in the
              amount of $396,817 for breach of contract
              (the India Agreement), conversion, and
              unjust enrichment;

       •      PDH Singapore against Exide Singapore in
              the amount of $278,446 for breach of
              contract (the Singapore Agreement),
              conversion, and unjust enrichment;

       •      PDH Hong Kong against Exide Asia in
              the amount of $791,524 for breach of

   2
     In December 2001, PDH USA filed a second complaint
solely against Exide claiming a breach of contract with respect
to certain letters of credit and seeking relief in the amount of
approximately $3.14 million.           This was consolidated
administratively with the first action but did not raise the same
issues. It is not at issue here.

                                6
               contract (the H ong            K ong/PR C
               Agreement), conversion,        and unjust
               enrichment;

       •       PDH Europe against Exide Europe in the
               amount of $6,665,051 for breach of
               contract (the UK Agreement), conversion,
               and unjust enrichment;

       •       PD Int’l and PDH Europe against Exide
               Europe in the amount of $1,788,054 for
               breach of contract (the European
               Agreement), conversion, and unjust
               enrichment; and

       •       PDH USA against Exide in the amount of
               approximately $6,700,000 for breach of
               co n trac t ( th e U S A A g r e e m e n t),
               conversion, and unjust enrichment.3

The complaint included a demand for a jury trial.

       The Exide defendants moved to dismiss the complaint on
September 17, 2001 under Illinois Code of Civil Procedure
Section 2-615, arguing that plaintiffs failed to state a valid cause

  3
   This last claim is undisputedly “core” and is not at issue on
appeal.

                                 7
of action. In their motion, they asserted, inter alia, that the
plaintiffs contractually agreed to waive the claims of breach of
contract, conversion, and unjust enrichment and were only
entitled to seek indemnification. Furthermore, they contended,
the plaintiffs had not alleged a breach of a covenant made by
“Exide,” defined as Exide and the Exide Foreign Entities. The
motion was subsequently denied by the Illinois trial judge
overseeing the case. Accordingly, the Exide defendants filed an
answer, affirmative defenses, and counterclaim on January 22,
2002. In their answer, the Exide Foreign Entities raised several
defenses but did not assert that they were not proper parties to
the litigation or that the exclusive remedy for breach was against
Exide alone.

        Discovery had just begun in the state court action when
Exide and several of its domestic subsidiaries, who are not
parties here, filed petitions for Chapter 11 bankruptcy in the
United States Bankruptcy Court for the District of Delaware on
April 15, 2002. None of the Exide Foreign Entities filed for
bankruptcy, and Exide is the only defendant to the Illinois action
that is involved in bankruptcy proceedings.

       Recognizing that the automatic stay under 11 U.S.C.
§ 362(a) applied to its claims against Exide, PDH USA did not
pursue them further in Illinois state court. The PDH Foreign
Entities, however, continued to prosecute their claims against
the non-debtor defendants. The Exide Foreign Entities
consequently asked the state court to stay discovery on the

                                8
claims against them as well, which it initially did. After three
hearings, however, the judge lifted the stay on July 8, 2002,
holding that the stay did not apply to the non-debtor defendants
and ordering that the case move forward without Exide.

        The Exide Foreign Entities then filed a motion to dismiss
the claims against them for lack of necessary party. Rather than
wait for the state court’s ruling, however, on August 21, 2002,
the day before a hearing was to be held in state court on the
motion to dismiss, the Exide defendants removed the action to
the United States Bankruptcy Court for the Northern District of
Illinois. They also moved to transfer the action to the United
States Bankruptcy Court for the District of Delaware.

       The PDH Foreign Entities in turn moved for remand to
state court or, in the alternative, abstention. They argued that
removal was improper because the claims asserted against
Exide’s non-debtor subsidiaries did not “arise under” the
bankruptcy code or “arise in” Exide’s bankruptcy case and were
not “related to” the bankruptcy case as required for the court to
exercise jurisdiction under 28 U.S.C. § 1334.

        The Exide Foreign Entities argued that the claims were
at minimum “related to” Exide’s bankruptcy case and thus
subject matter jurisdiction should be found to exist. The crux of
their argument was that the Coordinating Agreement provided
that Exide was the “sole indemnitor” and, therefore, the

                               9
exclusive remedy available to the PDH Foreign Entities was a
direct claim against Exide, not the foreign subsidiaries.

       Exide’s arguments that only it had assumed
indemnification obligations turned on the meaning of the term
“Buyer” as used within the first phrase of Section 4.2(a) of the
Coordinating Agreement, which set forth remedies available
against the Exide entities under the sales agreements and
provided:

       Indemnification by Buyer

       (a) Subject to Sections 4.2(b), 4.2(c), and 4.2(d),
       Buyer agrees to indemnify and hold Seller and the
       International Sellers and their Affiliates harmless
       from and against any and all Losses and Expenses
       incurred by Seller or the International Sellers and
       their Affiliates in connection with or arising from:

              (i) any breach by Buyer of any of its
              covenants or agreements in the Sale
              Agreements or in this Agreement;

              (ii) any breach of any warranty or the
              inaccuracy of any representation by Buyer
              contained in the Sale Agreements, . . .; or

                               10
              (iii) any breach by Buyer of any covenant
              contained in Section 11.1 or Section 12.2
              of the U.S. Agreement or the
              corresponding provisions in the other Sale
              Agreements.

App. 578-79. Under the Coordinating Agreement, PDH USA
and its affiliates were “Seller” and “International Sellers,”
respectively. As to the buyers, the first page of the Coordinating
Agreement identified “Exide Corporation” as “Buyer” and the
Exide subsidiaries as “International Buyers.” Under the
definitional section of the Coordinating Agreement, however,
the term “Buyer,” as used in articles 1 and 3 to 7, inclusive, was
further defined to mean “Buyer and/or (as the context may
require) any International Buyer.” App. 565, 567. The
Coordinating Agreement used these terms throughout and was
meant to “provide a single avenue of recourse for
indemnification claims arising under the Sale Agreements.”
App. 565.

       The Exide Foreign Entities took the position before the
Bankruptcy Court that 4.2(a) fixed liability on Exide alone and
that the Exide Foreign Entities were not named indemnitors
under the agreement. According to this interpretation, the term
“Buyer” in the heading to 4.2 and the opening clause of 4.2(a)
means only Exide, rather than “Buyer and/or any International
Buyer.” More specifically, Exide claimed that Amendment
No. 1, one of three lengthy amendments to the Coordinating

                               11
Agreement, had altered this indemnification provision and made
unambiguous that it was the only proper defendant to the PDH
Foreign Entities’ claims. Amendment No.1 provided “Section
4.2(a)(i) is hereby amended to insert the words ‘or, for the sake
of clarification, any International Buyer’ after the word ‘Buyer’
in the first line of such section.” App. 745. With the new
language inserted, the relevant part of the section read:

       Buyer agrees to indemnify and hold Seller and the
       International Sellers and their Affiliates harmless
       from and against any and all Losses and Expenses
       incurred by Seller or the International Sellers and
       their Affiliates in connection with or arising from:

              (i) any breach by Buyer or, for the sake of
              clarification, any International Buyer of
              any of its covenants or agreements in the
              Sale Agreements or in this Agreement

App. 579. Because Amendment No.1 added “or, for the sake of
clarification, any International Buyer” to only one subsection of
4.2(a), as the argument goes, “Buyer” in the remainder of the
section cannot include international buyers.

       On February 4, 2003, Judge Sonderby of the Bankruptcy
Court in Illinois ruled on the Exide defendants’ motion for
transfer. Although she observed that “[i]t appears, from a
review of the agreements and the parties’ contentions, that there

                               12
may be an ambiguity on the indemnification issue,” she did not
resolve the issue. App. 660. Instead, she found “at least ‘related
to’ jurisdiction over the removed action,” App. 661, and,
accordingly, transferred the action, including PDH Foreign
Entities’ pending motion to remand or abstain, to the United
States Bankruptcy Court for the District of Delaware.4 I n t h e
meantime, April 23, 2003 was set as the deadline for filing
proofs of claim in Exide’s bankruptcy case. PDH USA and each
of the PDH Foreign Entities filed proofs of claim. PDH USA’s
proof of claim, which is not at issue on appeal, was against
Exide directly. The PDH Foreign Entities’ proofs of claims, by
contrast, were contingent, indicating a right of recovery against
Exide only if they succeeded in their action against the non-
debtor defendants and they proved unable to satisfy the
judgment. Typical of the PDH Foreign Entities’ proofs of claim
is PDH Europe’s proof of claim, which indicates that it claimed
“approximately $6,665,051.00, . . . from the Debtor’s subsidiary,
Exide Holding Europe, on the grounds set forth in a Complaint
filed in Cook County, Illinois . . . .” App. 500. The proof of
claim explains the background of litigation in the bankruptcy
courts in both Illinois and Delaware and then continues,

       As set forth in the Memorandum Opinion [of the
       United States Bankruptcy Court for the Northern

   4
     Despite the transfer, the actual case files from the Illinois
state court were not received in Delaware until January 14,
2004, long after a decision on the motion to remand was issued.

                               13
       District of Illinois transferring the litigation], the
       parties disagree regarding the liability of the
       Debtor for any breaches of the sale agreements.
       It is PDH (Europe)’s position that Exide Holding
       Europe is primarily liable for its breaches, and
       that the Debtor is secondarily liable to the extent
       that Exide Holding Europe is unable to satisfy
       PDH (Europe). The Debtor contends that it is the
       sole indemnitor for breaches by it or its
       subsidiaries under the related sales agreements.
       Accordingly, if the appropriate court determines
       that the Debtor is the sole indemnitor, PDH
       (Europe) has a direct claim against the Debtor for
       any breaches. Conversely, if the appropriate court
       determines that Exide Holding Europe is
       primarily liable for its breaches, PDH (Europe)
       has a contingent claim against the Debtor, which
       is dependent on Exide Holding Europe’s ability to
       satisfy PDH (Europe)’s claims.

App. 500-01.

        On October 3, 2003, PDH Foreign Entities filed a
renewed motion in the Delaware Bankruptcy Court for remand
or abstention. In their motion, the PDH Foreign Entities argued
that: (1) the forum selection clause in the parties’ Coordinating
Agreement compelled remand to Illinois state court; (2) the
Bankruptcy Court lacked subject matter jurisdiction; (3)

                                14
principles of equitable remand under 11 U.S.C. § 1452(b)
should be applied; and (4) mandatory abstention under
28 U.S.C. § 1334(c)(2) applied.

        The Exide entities filed a response to the motion to
remand arguing that, under the Coordinating Agreement, Exide
should be understood to be the “sole indemnitor” of all of the
PDH Foreign Entities’ claims, and therefore, the PDH Foreign
Entities were not entitled to any remedy against Exide Foreign
Entities. The Exide entities also argued that the automatic stay
under the Bankruptcy Code should be extended to PDH Foreign
Entities’ claims against the non-debtor Exide Foreign Entities.
Under the then-existing local bankruptcy rules, PDH had no
right to file a reply, unless ordered to do so by the court. Del.
U.S. Bankr. Ct. L.R. 9006-1(d) (2003).

        On November 19, 2003, the Delaware Bankruptcy Court
held a hearing on the motion to remand. At the outset of the
hearing, the judge opined as to the key issue, noting that “it’s
clear to me that by virtue of the filing of the Proofs of Claim that
in large measure the matters before me are core.” App. 49. He
then continued,

       it seems to me . . . that the mandatory abstention
       part of the motion is one I’m going to deny for the
       reason that these are, at least in large measure,
       core, and secondly, by virtue of the filing of the
       Proof of Claim you’ve – the forum selection falls

                                15
       away, because, as some of the cases say, once
       you’ve done that you’ve chosen your forum.

App. 50.

        Nonetheless, the parties made their arguments. Exide’s
counsel asserted that the language in the Coordinating
Agreement was unambiguous and clearly stated that any claims
could only proceed against Exide as the sole indemnitor and,
thus, should be litigated in Bankruptcy Court. In the alternative,
counsel argued that the claims against the non-debtor entities
and the claims against the debtor were “so inextricably
intertwined that it was impossible as a practical matter to
disentangle them,” and urged the Court to follow In re RBGSC
Inv. Corp., 253 B.R. 369 (E.D. Pa. 2000), and find that the
claims against the non-debtors were core. App. 87. PDH’s
counsel protested that the merits of the Coordinating Agreement
should not be determined on a motion for remand and that they
had had no opportunity to reply to Exide’s merits arguments.
Moreover, the claims against the non-debtor Exide entities, he
argued, should be deemed non-core and, consequently,
mandatory and/or discretionary abstention should apply.

       At the conclusion of the hearing, the Court held:

       While Judge Sonderby points out that there may
       be ambiguity [in the language of the Coordinating

                               16
       Agreement], I conclude as a matter of law that
       there is none. And that Exide is the sole
       [i]ndemnitor under § 4.2 and I reach this
       conclusion, largely as a result of Amendment
       number 1, where the parties specifically chose to
       include language which addressed the very issue
       of what the buyer should mean in that subsection
       . . . . That’s why I make that conclusion. This
       results in making Exide solely liable for the
       asserted breaches . . . .

App. 103. It, therefore, found the claims within its jurisdiction
under 28 U.S.C. §§ 157(b)(2)(B) and (b)(2)(C) and determined
that remand and abstention were not warranted. It requested that
counsel jointly draft an order memorializing its decision.

      On December 11, 2003, the order was entered and
provided:

       For the reasons articulated on the record on
       November 19, 2003, Plaintiffs’ Motion is
       DENIED. The Court finds that Section 4.2(a) of
       the Coordinating Agreement as modified by
       Amendment No.1 of the Coordinating Agreement
       is unambiguous, that Debtor Exide is the sole
       indemnitor thereunder, and that consequently the
       foreign Pacific Dunlop entities have no right of
       recovery against the non-debtor Exide entities.

                               17
       The Court also finds that all the claims asserted
       by the Plaintiffs, including those of the foreign
       Pacific Dunlop entities, are core proceedings to
       which the automatic stay applies, that the Court
       has jurisdiction over this matter pursuant to
       28 U.S.C. §§ 157(b)(2)(B) and (C), that
       mandatory abstention pursuant to 28 U.S.C.
       § 1334(c)(2) is inapplicable, and that neither
       remand pursuant to 28 U.S.C. § 1452(b) nor
       discretionary abstention pursuant to 28 U.S.C.
       § 1334(c)(1) is warranted.

App. 23-24. The order also extended the automatic stay to the
claims against the Exide Foreign Entities.

       The PDH Foreign Entities subsequently filed a motion
for reconsideration, urging the Court to allow them to adduce
evidence to counter this interpretation of the Coordinating
Agreement because they had not anticipated that the meaning of
this agreement would be decided as part of their motion to
remand or abstain. The Bankruptcy Court held a hearing on the
motion on February 26, 2004, but did not issue a decision for
approximately 18 months.

       In the interim, Exide’s reorganization plan was confirmed
on April 20, 2004 and became effective two weeks later. Under
the plan, the reorganized Exide created a new foreign subsidiary
and merged Exide Europe and Exide Asia into it. PDH Foreign

                              18
Entities’ rights against Exide Foreign Entities were not impaired
by the reorganization plan. In fact, in providing for the
discharge of claims against Exide, the Confirmation Order
expressly stated: “excepting, however, that any claims of the
Pacific Dunlop Holdings Entities against non-debtor subsidiaries
of the debtors are not affected hereby.” App. 1711.

      More than a year after the plan was confirmed, the
Bankruptcy Court denied PDH’s motion for reconsideration.
App. 25. The clerk’s docketing of the order characterizes it as
a dismissal of the PDH Foreign Entities’ claims against the
Exide Foreign Entities.

        PDH appealed the denial of their motions to the United
States District Court for the District of Delaware. At oral
argument, the District Court focused largely on the PDH Foreign
Entities’ filing of proofs of claim and said “I think you have to
choose whether you are going to try to collect against the debtor
or you are going to choose to withdraw your proofs of claim and
do what you say you want to do, which is just proceed against
the nondebtor entity.” App. 146; see also App. 166, 150 (“I
don’t think the Bankruptcy Court would have jurisdiction at all
but for the [contingent] claim.”). When the hearing concluded,
it requested supplemental briefing on whether filing proofs of
claim when there is an indemnity relationship between debtor
and non-debtors gives the bankruptcy court core jurisdiction
over the underlying cause of action between non-debtors.

                               19
       On March 22, 2007, the District Court issued a
memorandum order, denying the PDH Foreign Entities’ appeal
and affirming the orders of the Bankruptcy Court. First, it
decided that the PDH Foreign Entities’ four proofs of claim
against Exide invoked the claims allowance process and were
core proceedings.5 Second, it agreed with the Bankruptcy Court
that the Coordinating Agreement was unambiguous in its
designation of Exide as the sole indemnitor. It concluded that,

       [o]nce Exide was identified as the sole indemnitor
       for the state claims brought by the PDH Foreign
       Entities against the Exide Foreign Entities, it
       follows that the PDH Foreign Entities, through
       their proofs of claim, have direct claims against
       the debtor and its bankruptcy estate and that the
       resolution of the claims through the claims
       process is a core proceeding subject to the
       jurisdiction of the bankruptcy court.

  5
     The District Court’s memorandum order referred to three
PDH Foreign Entities and four total proofs of claim, including
PDH USA’s proof of claim. This appears to have been an
oversight as there are four PDH Foreign Entities and five proofs
of claim filed in total, inclusive of PDH USA’s proof of claim.

                              20
Ohio App. 11-12. In support of its conclusion, the Court cited Pacor
v. Higgins, 743 F.2d 984, 995 (3d Cir. 1984), as representing our
recognition that “a debtor’s agreement to indemnify a third party
gives rise to jurisdiction over nonbankrupt controversies with
that third party, especially where the third party has filed a claim
against the debtor.” App. 12. PDH USA and the PDH Foreign
Entities timely appealed the District Court’s order.

          II. Jurisdiction and Standard of Review

       The District Court had jurisdiction to hear the PDH
Foreign Entities’ appeal from the Bankruptcy Court’s denial of
their motion to remand and/or abstain and motion for
reconsideration, respectively, pursuant to 28 U.S.C. § 158(a)(1).
The District Court’s subsequent affirmance of the Bankruptcy
Court’s orders on March 22, 2007 gave rise to this appeal, over
which we have jurisdiction pursuant to 28 U.S.C. § 158(d)(1)
and 28 U.S.C. § 1291. We review the appeal of the ruling not
to exercise mandatory abstention under 28 U.S.C. § 1334(d).
Stoe v. Flaherty, 436 F.3d 209, 212 (3d Cir. 2006). The
consequent ruling not to remand, however, is “not reviewable by
appeal or otherwise by the court of appeals under section 158(d),
1291, or 1292 of [title 28].” 28 U.S.C. § 1452(b).

        Our review of the Bankruptcy Court’s orders is the same
as that exercised by the District Court. In re Zinchiak, 406 F.3d
214, 221-22 (3d Cir. 2005). We review its rulings as if we were
reviewing it in the first instance, and our review is plenary. See

                                21
Stonington Partners, Inc. v. Lernout & Hauspie Speech Prods.
N.V., 310 F.3d 118, 121 (3d Cir. 2002); Zinchiak, 406 F.3d at
221-22; In re Continental Airlines, 203 F.3d 203, 208 (3d Cir.
2000). We, therefore, exercise plenary review of the questions
of whether the claims at issue are core proceedings and whether
the mandatory abstention provision of § 1334(c)(2) applies to
this removed case. Stoe, 436 F.3d at 212. Because the District
Court acted as an appellate court, our review of its decision is
similarly plenary. In re Myers, 491 F.3d 120, 124 (3d Cir.
2007).

                       III. Discussion

        Bankruptcy jurisdiction extends to four types of
proceedings: (1) cases “under” title 11, that is, the bankruptcy
petition; (2) proceedings “arising under title 11”; (3)
proceedings “arising in” a bankruptcy case; and (4) proceedings
“related to” a bankruptcy case. 28 U.S.C. § 1334(b); In re
Combustion Eng’g, Inc., 391 F.3d 190, 225 (3d Cir. 2005). The
first three categories are “core” proceedings in which the
bankruptcy court has power to hear, decide, and enter orders and
judgments. 28 U.S.C. § 157(b)(1). The fourth category,
“related to” proceedings, are “non-core” proceedings, which the
bankruptcy court can hear, but in which it can only submit
proposed findings of fact and conclusions of law to the district
court, not issue orders. Halper v. Halper, 164 F.3d 830, 836
(3d Cir. 1999). As we have said, “a ‘non-core’ proceeding
belongs to ‘the broader universe of all proceedings that are not

                              22
core proceedings but are nevertheless related to a bankruptcy
case.’” Id. at 837 (internal citations omitted). They, therefore,
“need not necessarily be against the debtor or against the
debtor’s property,” but, rather, need only be such that “the
outcome of that proceeding could conceivably have any effect
on the estate being administered in bankruptcy.” Pacor, 743
F.2d at 994; see also In re Federal-Mogul Global, Inc., 300 F.3d
368, 381 (3d Cir. 2002).

       Whether claims are considered core or non-core
proceedings dictates not only the bankruptcy court’s role and
powers but also the availability of mandatory abstention, see
28 U.S.C. § 157(b)(4), and the enforcement of forum selection
clauses, see In re Diaz Contracting, Inc., 817 F.2d 1047, 1051-
53 (3d Cir. 1987). If the claims of the PDH Foreign Entities
against the Exide Foreign Entities are merely “related to” the
debtor’s bankruptcy case, abstention and enforcement of the
forum selection clause of the Coordinating Agreement are
appropriate. The dispositive issue, therefore, is whether the
claims asserted by the PDH foreign entities against the Exide
foreign entities in state court are “core” bankruptcy claims
within the meaning of 28 U.S.C. § 157(b). We accordingly will
begin by examining the bases upon which the Bankruptcy Court
found that the claims at issue were “core.”

                               23
       A. Core v. Non-Core Proceedings

       In order to evaluate whether a claim is “core,” a court
must first look to the illustrative list of “core” proceedings found
in § 157(b)(2). It must then conduct this Court’s two-step test,
according to which a claim will be deemed core “if (1) it
invokes a substantive right provided by title 11 or (2) if it is a
proceeding, that by its nature, could arise only in the context of
a bankruptcy case.” Halper, 164 F.3d at 836 (citing In re Guild
& Gallery Plus, Inc., 72 F.3d 1171, 1178 (3d Cir. 1996)). Each
claim within the same cause of action must be analyzed claim by
claim and each alone must satisfy this test in order to be
considered a core proceeding. Halper, 164 F.3d at 836-37.
A single cause of action may include both core and non-core
claims. The mere fact that a non-core claim is filed with a core
claim will not mean the second claim becomes “core.” See In re
Best Reception Systems, Inc., 220 B.R. 932, 947 (Bankr. E.D.
Tenn. 1998).

        Here, the claims brought by the PDH Foreign Entities are
state law claims, respectively, breach of contract, conversion,
and unjust enrichment, asserted against non-debtor defendants.
None of the claims fall neatly into the list of core proceedings
under 28 U.S.C. § 157(b)(2).6

   6
    Under § 157(b)(2), “core proceedings include, but are not
limited to”:
                                               (continued...)

                                24
6
    (...continued)
         (A) matters concerning the administration of the
         estate;
         (B) allowance or disallowance of claims against
         the estate or exemptions from property of the
         estate, and estimation of claims or interests for the
         purposes of confirming a plan under chapter 11,
         12, or 13 of title 11 but not the liquidation or
         estimation of contingent or unliquidated personal
         injury tort or wrongful death claims against the
         estate for purposes of distribution in a case under
         title 11;
         (C) counterclaims by the estate against persons
         filing claims against the estate;
         (D) orders in respect to obtaining credit;
         (E) orders to turn over property of the estate;
         (F) proceedings to determine, avoid, or recover
         preferences;
         (G) motions to terminate, annul, or modify the
         automatic stay;
         (H) proceedings to determine, avoid, or recover
         fraudulent conveyances;
         (I) determinations as to the dischargeability of
         particular debts;
         (J) objections to discharges;
         (K) determinations of the validity, extent, or
         priority of liens;
         (L) confirmations of plans;
                                                       (continued...)

                                 25
        Even assuming that the claims fall within the list, none –
on its face – invokes a substantive right under the Bankruptcy
Code. Each claim is a state law cause of action, sounding in
contract and tort. Each pre-dated the filing of the bankruptcy
petition and were filed in state court and, consequently, do not
appear to be proceedings that “could arise only in the context of
a bankruptcy case.” It is important, however, that a court “not
simply [] apply the terms of the statute but rather [] analyze the
nature of the underlying claim to determine whether, given
constitutional constraints on bankruptcy jurisdiction . . . , that
claim should be considered a core proceeding.” Meadowlands
Commc’n, Inc. v. Banker’s Trust Co., 79 B.R. 198 (D.N.J.
1987).

  6
      (...continued)
           (M) orders approving the use or lease of property,
           including the use of cash collateral;
           (N) orders approving the sale of property other
           than property resulting from claims brought by the
           estate against persons who have not filed claims
           against the estate;
           (O) other proceedings affecting the liquidation of
           the assets of the estate or the adjustment of the
           debtor-creditor or the equity security holder
           relationship, except personal injury tort or
           wrongful death claims; and
           (P) recognition of foreign proceedings and other
           matters under chapter 15 of title 11.

                                  26
        Here, the Bankruptcy Court determined that the PDH
Foreign Entities’ claims,        although seemingly between
non-debtors, were actually claims against the debtor’s estate
and, therefore, core proceedings under §§ 157(b)(2)(B) and (C).
In reaching this conclusion, it adopted two alternative theories.
According to the first, the PDH Foreign Entities’ claims against
the Exide Foreign Entities were, in actuality, claims directly
against Exide, over which the Bankruptcy Court had exclusive
jurisdiction. As the argument goes, Article 4.2(a) of the
Coordinating Agreement – read correctly – limited the PDH
entities’ right of recovery to an action for indemnification
against Exide alone as the sole defendant. Their claims were,
therefore, against the debtor and core proceedings pursuant to
§ 157(b)(2)(B); the counterclaims asserted in the defendants’
complaint similarly became core proceedings under
§ 157(b)(2)(C). According to the second theory, the PDH
Foreign Entities voluntarily submitted to the jurisdiction of the
Bankruptcy Court by filing proofs of claim in Exide’s
bankruptcy case. Because the bankruptcy claims allowance
process can arise only in the context of a Title 11 bankruptcy
and the PDH Foreign Entities filed proofs of claims against the
debtor, their claims constituted core proceedings.

        On appeal, the PDH Foreign Entities challenge both
grounds. First, they assert that their claims in the state court
action are strictly between non-debtor plaintiffs and non-debtor
defendants and, therefore, non-core. Second, they say, their
filing contingent proofs of claim indicates only that the debtor

                               27
might be called upon if the Exide Foreign Entities are unable to
pay; it does not transform the claims into a core proceeding. The
Bankruptcy Court, therefore, either was required to abstain or to
enforce the forum selection clause and remand the action to state
court. The appellees, by contrast, contend that: 1) the
Coordinating Agreement designates the debtor Exide as the
“sole indemnitor” for claims arising under the sales agreements
and, consequently, the PDH Foreign Entities’ claims against the
Exide Foreign Entities are barred and actually claims against the
debtor directly; and 2) the PDH Foreign Entities’ filing proofs
of claim against the debtor subjects them irrevocably to the
jurisdiction of the Bankruptcy Court for the purposes of
deciding the cause of action originally filed in state court. The
appellees also assert that, even if these other two arguments
were unavailing, the claims should be deemed “core,” because
they are so intertwined with claims against the debtor in the
same cause of action.

       We will examine each of the grounds for the Bankruptcy
Court’s decision in turn, as well as appellees’ contention that the
claims are core because they are “intertwined” with core claims.
As the discussion below will make clear, we disagree with each
of these bases for finding “core” jurisdiction.

                                28
     B. The Coordinating Agreement and the “Sole
Indemnitor” Theory

       The Bankruptcy Court and the District Court each relied
heavily on Exide’s interpretation of the contractual language in
the Coordinating Agreement in finding core jurisdiction. Both
looked to the language of the Coordinating Agreement and the
merits of the Exide defendants’ contractual interpretation
argument and held that the claims, although ostensibly against
the non-debtor Exide Foreign Entities, were actually more
properly understood as leveled directly against the debtor,
Exide. In so concluding, they found the Coordinating
Agreement excludes all indemnification obligations of the Exide
Foreign Entities by clearly and unambiguously designating
Exide as the sole indemnitor, with the result that the PDH
Foreign Entities have no valid claim against the Exide Foreign
Entities. Because only the debtor is an appropriate defendant,
the PDH Foreign Entities’ claims become claims of non-debtors
against a debtor, the resolution of which must take place in
bankruptcy court.

       On appeal, the PDH Foreign Entities argue that they did
not have a fair opportunity to respond to this merits argument as
the extant court rules provided them no right of reply. Del. U.
S. Bankr. Ct. L.R. 9006-1(d)(2003). They also contend that,
because their motion to remand or abstain was a procedural and
jurisdictional motion which did not present the issue of contract
interpretation, the Bankruptcy Court’s decision on the merits of

                               29
their claims against the Exide Foreign Entities took them by
surprise. According to the appellants, the Court erred in
considering the merits of Exide’s interpretation of the
Coordinating Agreement and should have confined itself to the
jurisdictional issues presented, instead of reaching any issues
regarding the claims and defenses of the parties.

       In response, the Exide Entities insist that the appellants
were not unfairly surprised by the Court’s order dismissing their
claims against the Exide Foreign Entities because they “had
every reason to expect that Exide would address the
interpretation of the Coordinating Agreement in its response to
the Remand Motion” and because they could have sought leave
of the Court to file a reply.7 They argue that the Court properly

    7
      The appellees devote a large section of their brief to
procedural barriers they allege defeat the PDH Foreign Entities’
argument that the Bankruptcy Court’s decision on the merits
surprised them and improperly prevented them from presenting
defenses. They alternately contend that the appellants waived
the argument, endorsed the Bankruptcy Court’s order and are
estopped from challenging it, and are precluded from
challenging it because it did not dispose of their claims.
       We are not persuaded. As to waiver, the appellants
repeatedly objected to the Bankruptcy Court’s decision as
having ambushed and surprised them. They raised the argument
before the Bankruptcy Court on reconsideration and the District
Court on appeal and preserved it for our review.
                                                   (continued...)

                               30
reached the merits and correctly concluded the relevant contract
language was clear and unambiguous.

       Given the requirement that a court carefully evaluate
every claim individually to determine if it is “core,” “non-core,”
or unrelated to the bankruptcy case, we agree with the Exide
appellees that both the Bankruptcy Court and the District Court
correctly decided that the issue of the Coordinating Agreement’s
interpretation had to be resolved in order to decide the motion

  7
    (...continued)
         Equally lacking in merit is the Exide Foreign Entities’
theory that appellants should be estopped from challenging the
2003 Order because their counsel suggested the language used
therein and therefore endorsed it. The Bankruptcy Court issued
its ruling at the conclusion of the hearing on the motion to
remand or abstain and simply requested that counsel draft the
order to memorialize its decision. The fact that appellants’
counsel helped draft the order to reflect accurately the Court’s
ruling does not estop appellants from challenging the order.
         As to whether the order disposed of the PDH Foreign
Entities’ claims, it states clearly that “the foreign Pacific Dunlop
entities have no right of recovery against the non-debtor Exide
entities.” App. 24. Although the Exide Foreign Entities’
argument that the order did not represent an allowance or
disallowance of the PDH Foreign Entities’ proofs of claim
against debtor Exide’s estate is technically correct, it is
irrelevant as to whether the order was dispositive as to the PDH
Foreign Entities’ claims against the Exide Foreign Entities.

                                31
to abstain or remand. A determination as to whether the PDH
Foreign Entities’ claims had to proceed against the debtor alone
was necessary to the disposition of the motion. However, we
believe that both courts erred in concluding that the
Coordinating Agreement was unambiguous.

       Indeed, the contractual provision at issue is anything but
clear. Article 4.2(a), entitled “Indemnification by Buyer,”
delineates the obligations of “Buyer” to PDH USA and the PDH
Foreign Entities (“Seller” and “International Sellers,”
respectively) as follows:

       (a) Subject to Sections 4.2(b), 4.2(c), and 4.2(d),
       Buyer agrees to indemnify and hold Seller and the
       International Sellers and their Affiliates harmless
       from and against any and all Losses and Expenses
       incurred by Seller or the International Sellers and
       their Affiliates in connection with or arising from:

              (i) any breach by Buyer of any of its
              covenants or agreements in the Sale
              Agreements or in this Agreement;

              (ii) any breach of any warranty or the
              inaccuracy of any representation by Buyer
              contained in the Sale Agreements, . . .; or

                               32
              (iii) any breach by Buyer of any covenant
              contained in Section 11.1 or Section 12.2
              of the U.S. Agreement or the
              corresponding provisions in the other Sale
              Agreements.

App. 578-79. The provision does not define “Buyer” to mean
only Exide nor does it use the term “sole indemnitor” or
establish that Exide would be exclusively a proper party for any
claims. For the purposes of the Coordinating Agreement, the
term “Buyer” is in fact to mean “Buyer and/or (as the context
may require) any International Buyer.” App. 567.

        The Bankruptcy Court and the District Court, however,
reasoned that Amendment No.1 to the Coordinating Agreement
clarified the provision and unambiguously designated Exide as
the “sole indemnitor” and the only proper party for any breach
of the sales agreements. After the amendment, subsection (i)
read: “any breach by Buyer or, for the sake of clarification, any
International Buyer of any of its covenants or agreements in the
Sale Agreements or in this Agreement” (new inserted language
emphasized).        The remaining language in 4.2(a) was
unchanged.

       Based on the amendment, the Bankruptcy Court held
there was no ambiguity in 4.2(a) and Exide was unambiguously
“solely liable for the asserted breaches.” App. 103. It reasoned,

                               33
       I reach this conclusion, largely as a result of
       Amendment number 1, where the parties
       specifically chose to include language which
       addressed the very issue of what the buyer should
       mean in that subsection, and it strikes me that
       there’s no other reasonable inference to be drawn
       from the making of that amendment other than the
       parties intended to make that clarification with
       respect to section 4.2(a) small Roman “i” . . . .
       That’s why I make that conclusion. This results
       in making Exide solely liable for the asserted
       breaches . . . .

Id. Its order similarly provided:

       The Court finds that Section 4.2(a) of the
       Coordinating Agreement as modified by
       Amendment No.1 of the Coordinating Agreement
       is unambiguous, that Debtor Exide is the sole
       indemnitor thereunder, and that consequently the
       foreign Pacific Dunlop entities have no right of
       recovery against the non-debtor Exide entities.

App. 23-24. Faced with the PDH Foreign Entities’ motion for
reconsideration, the Bankruptcy Court further reasoned that:

                              34
       By virtue of Amendment No. 1, the parties
       specifically and deliberately carved out only one
       clause of Section 4.2(a) to “clarify.” The other
       parts of Section 4.2(a) remained unchanged.
       Therefore, the only reasonable inference that
       arises from Amendment No. 1[] is that the parties
       intended that the term “Buyer,” as used in the
       remainder of Section 4.2(a), means only Exide
       Corporation.

App. 36. On appeal from the Bankruptcy Court’s order, the
District Court agreed with this conclusion.

       This was error. Amendment No.1 does not make clear
that Exide is the sole indemnitor under the Coordinating
Agreement. Even after the amendment, Article 4.2(a) does not
unambiguously state that only one of the numerous contracting
buyers assumed indemnification obligations. Nothing in the
agreement indicates that the sole recourse of the PDH Foreign
Entities is against Exide or provides a waiver of rights as against
the non-debtor Exide entities. No amendment provided that the
term in the heading or first phrase of 4.2(a) should no longer be
defined as “Buyer and/or . . . International Buyer.”

       We find illogical the Bankruptcy Court’s assertion that
the “only reasonable inference” from the amendment is that
“Buyer” means only Exide in the other subsections of the
provision. It simply does not follow that, because the

                                35
amendment clarified that the term “Buyer” in subsection
4.2(a)(i) meant Exide or one of the Exide Foreign Entities, it
also established that “Buyer” used elsewhere in 4.2(a)
unambiguously meant only Exide. In fact, “Buyer” as used in
other subsections of Article 4.2(a) is more reasonably read to
mean both Exide and the Exide Foreign Entities. Subsection
(iii), for instance, provides as an event for which the sellers will
be indemnified “any breach by Buyer of any covenant contained
in Section 11.1 or Section 12.2 of the U.S. Agreement or the
corresponding provisions in the other Sales Agreements.” App.
579. The reference to “Buyer” here could mean only both Exide
and the Exide Foreign Entities because Exide was not a party to
the “other Sales Agreements” and could not, therefore, have
breached any covenants therein. Thus, “Buyer” has to mean
Exide and the Exide Foreign Entities. The language of
subsection (ii) suggests a similar interpretation.

        Accordingly, the Bankruptcy Court erred in concluding
that the Coordinating Agreement unambiguously designates the
debtor as the “sole indemnitor” and only proper party to the
PDH Foreign Entities’ claims.

       This error was magnified by the Court’s somewhat
precipitous consideration of this important and dispositive issue.
The Court gave no notice to the parties that it would decide this
issue as to the meaning of the agreement at the hearing. The
PDH entities had no right to reply to Exide’s merits argument.
Yet, at the very outset of the hearing, the Court stated that it

                                36
considered the claims to be “core.” It, in essence, credited the
defendants’ argument before PDH’s counsel had even had an
opportunity to address the issue.

       In so doing, the Court failed to provide the PDH Foreign
Entities with adequate notice and opportunity to present
arguments regarding the proper interpretation of the contract
under Illinois law. Prior to the hearing, neither party had even
researched Illinois law applicable to the presentation of extrinsic
evidence or the interpretation of the contract. Counsel for PDH
protested that the Exide Foreign Entities had acknowledged that
they could be held liable under the Coordinating Agreement and
perhaps waived the “sole indemnitor” theory, saying,

       I should point out that there was in the State Court
       in the first complaint an answer filed by the Exide
       entities collectively. And in the answer, which I
       have and can submit also - and I don’t think there
       would [be] any dispute about that, it’s a document
       – there’s no defense asserted. You can’t sue us,
       the foreign entities; it’s not in there. They didn’t
       raise that. They didn’t raise that for a good long
       time . . . in the litigation in Illinois. Why not?
       Because they understood that there was a right to
       sue them there. So that’s another factor by way of
       the behavior of the parties to show the
       understanding and their intent.

                                37
Ohio App. 73. He further noted that Exide’s counsel did not disagree
that the Exide defendants’ answer and counterclaim in state
court failed to raise the sole indemnitor theory asserted before
the Bankruptcy Court.8 The Bankruptcy Court had not yet
received the pleadings from Illinois state court and never even
addressed this argument.

        The PDH Foreign Entities should have had the
opportunity to pursue their contention that they were entitled to
sue their respective contracting Exide Foreign Entities based on
Illinois state law and the contracting parties’ understanding of
the Coordinating Agreement.              In their motion for
reconsideration, the PDH Foreign Entities urged the Court “to
reconsider its decision not to consider any extrinsic evidence, its
apparent decision that there was not even a latent ambiguity in
the agreements at issue between the parties, and its narrow
interpretation of a portion of Amendment No. 1 to the

       8
          At the hearing with respect to the motion for
reconsideration, counsel made this point again. He said, “it’s
not true that these issues were presented in the Illinois
proceedings. There was no – in fact, by Schaff and Weiss, the
predecessor’s counsel, there was no argument made in the
Illinois State Courts at any time by them that Pacific Dunlap
[sic] Entities could not go against the foreign entities. That was
an argument that was created later by later counsel, and that’s
another reason why it shows that they didn't intend it or they
would have raised that right at the start.” App. 120.

                                38
Coordinating Agreement . . . .” App. 1435. They argued that
Illinois law supported consideration of extrinsic evidence and
they raised the defenses of mutual mistake and latent ambiguity
as well. At the hearing on the motion, counsel for PDH urged
the Court to reconsider its decision because the motion for
remand had not presented the contractual interpretation issue on
which the Court based its decision and he had not been prepared
to argue the issue and fully develop defenses. Yet, in ultimately
denying reconsideration 18 months later, after Exide’s
bankruptcy plan had been confirmed, the Bankruptcy Court
dismissed this argument as “new legal theories that could have
been raised previously.” App. 37.

       Because the Court acted precipitously, it failed to permit
the PDH Foreign Entities to challenge Exide’s proposed
interpretation of the Coordinating Agreement. Based on its
holding that the relevant provision was unambiguous, it also
refused to consider extrinsic evidence. Accordingly, although
we now reverse the Court’s determination that Exide is
unambiguously the sole indemnitor, we cannot evaluate the
contract interpretation on its merits because the record was not
developed in the Bankruptcy Court. While the Court correctly
determined that an analysis of the indemnification provision in
the Coordinating Agreement was necessary to determine
whether the PDH Foreign Entities’ claims were actually directed
against the debtor and therefore core, it erred in concluding that
the provision was unambiguous and failing to allow extrinsic
evidence to be introduced. See, e.g., Farm Credit Bank of St.

                               39
Louis v. Whitlock, 144 Ill. 2d 440, 447, 581 N.E.2d 664, 667 (Ill.
1991) (noting that when a contract “is capable of being
understood in more sense than one,” parol evidence is
admissible).

        We will, therefore, remand in order to permit the
Bankruptcy Court to evaluate the issue more thoroughly. Upon
remand, the Court should allow the parties to brief the issue of
whether the Coordinating Agreement makes Exide solely liable
for all of the PDH Foreign Entities’ claims, to present extrinsic
evidence, and to develop the evidentiary record. In evaluating
whether the claims are core proceedings, the Court should also
exercise care to analyze each claim individually.9 We note that,
although, as the Exide Foreign Entities point out, the PDH
Foreign Entities did not specifically address this issue in
connection with their motion to remand or abstain, they had no
right to file a reply. They should be permitted to respond to it on
remand.

   9
     For example, the PDH Foreign Entities have argued that,
even if Exide were the sole indemnitor for the breach of contract
claims subject to the contract remedy provisions of the
Coordinating Agreement, the conversion claims stand apart and
can be asserted against the Exide Foreign Entities according to
Illinois law. We do not comment on the merits of this
contention, but simply note that it may be necessary to address
it even if the Bankruptcy Court concludes that the breach of
contract and unjust enrichment claims are core proceedings.

                                40
       C. Proofs of Claim and Core Proceedings

        Although we hold that the Bankruptcy Court erred and
should consider anew the meaning of the Coordinating
Agreement, we must also address the second, alternate and
potentially dispositive ground upon which the Bankruptcy Court
and District Court relied–namely, that the PDH Foreign Entities’
filing proofs of claims in Exide’s bankruptcy case rendered their
claims against the Exide Foreign Entities core proceedings.

        Section 157(b)(2)(B) provides that “core” proceedings
include “allowance or disallowance of claims against the estate.”
Both courts reasoned that, by filing a proof of claim in the
debtor’s bankruptcy case, the PDH Foreign Entities invoked the
allowance process and their claims became core. We could
accept this reasoning if it were premised upon the Coordinating
Agreement’s designation of Exide as the only proper party to the
PDH Foreign Entities’ claims so that the subject matter of the
proofs of claim is the same as that of the state law action.
However, the Bankruptcy Court suggested that, whenever a
proof of claim is filed by a claimant in the debtor’s bankruptcy
case, whatever claims are referenced therein become core
proceedings under 28 U.S.C. § 157(b)(2)(B). Even before
considering the “sole indemnitor” argument, the Bankruptcy
Court stated, “it’s clear to me that by virtue of the filing of the
Proofs of Claim that in large measure the matters before me are
core . . . .” App. 49. On appeal, the District Court similarly
expressed a belief that by filing proofs of claim against the

                                41
debtor, the PDH Foreign Entities were precluded from
proceeding against the non-debtor defendants. It stated, “it
seems to me that . . . if they hadn’t filed cont[ingent] proofs of
claim in bankruptcy, that, truly, the Bankruptcy Court would not
have had necessarily jurisdiction over this dispute so long as
there wasn’t any recourse to the debtor.” App. 150. It then
concluded that, “when the PDH Foreign Entities filed their
[four] proofs of claim against the Exide bankruptcy estate, they
irrevocably consented to have their claims heard and decided by
the bankruptcy court.” App. 20. It is this proposition that we
must now examine.

        On appeal, the PDH Foreign Entities argue that their
filing of contingent proofs of claim in the debtor’s bankruptcy
case does not establish that claims against non-debtors constitute
“core” proceedings. The proofs of claim were for contribution
or indemnification from Exide, contingent on securing a
judgment against the Exide Foreign Entities and their not being
able to pay it, and, while they might have submitted the PDH
Foreign Entities to the jurisdiction of the Bankruptcy Court, they
did not render the claims against the non-debtor Exide
defendants “core.” 10

  10
    We note that it is undisputed that, should the PDH Foreign
Entities secure a judgment against the Exide Foreign Entities
and these entities prove unable to pay, their contingent proofs of
claim against the debtor should be determined or estimated by
                                                    (continued...)

                               42
       In response, the Exide Foreign Entities urge us to affirm
the Bankruptcy Court’s decision, contending that the filing of
proofs of claims against the debtor rendered the PDH Foreign
Entities’ claims textbook “core” proceedings. The contingent
language within the proofs of claims, they say, has no bearing
on the Bankruptcy Court’s jurisdiction.

        To address these arguments properly, we must first
clarify the effect the filing of a proof of claim in a debtor’s
bankruptcy has on the jurisdiction of the bankruptcy court over
claims against non-debtors. As the following explains, we
believe the case law is clear that the filing of a proof of claim
may cause claims against non-debtors to be deemed “related to”

  10
    (...continued)
the Bankruptcy Court. See also Langenkamp v. Culp, 498 U.S.
42, 44 (1990) (holding that when a party submits a proof of
claim, it “trigger[s] the process of ‘allowance and disallowance
of claims,’” and thereby is consenting to jurisdiction of the
bankruptcy court to make a final decision as to its claim) (citing
Granfinanciera v. Nordberg, 492 U.S. 33 (1989)). The PDH
Foreign Entities acknowledge that the Bankruptcy Court has
core jurisdiction over its proofs of claim against Exide itself.
Appellant’s Br. 41; Reply Br. 17. The consent to jurisdiction,
however, is limited to claims against the debtor itself, not claims
against non-debtors. See 3 Collier on Bankruptcy ¶ 362.03[3][4]
(15th ed. 2005) (noting that when one defendant files a
bankruptcy petition, the suit may proceed against non-debtor co-
defendants).

                                43
proceedings, but will not result in their being considered “core”
proceedings.

        We agree, as Exide observes, that “it is axiomatic that
filing a proof of claim triggers the claims allowance process
under 11 U.S.C. § 501 et seq., which, by its very nature, is a
“core” proceeding that can arise only in a title 11 case.”
Appellee’s Br. 21; see also In re Argus Group 1700, Inc., 206
B.R. 737, 747-48 (Bankr. E.D. Pa. 1996) (“Debtors’ proposition
that the filing of a proof of claim in bankruptcy transforms a
pre-petition state law claim which was filed in state court before
the bankruptcy into a core proceeding is sound.”). Indeed, it has
long been black letter law that

       The filing of the proof invokes the special rules of
       bankruptcy concerning objections to the claim,
       estimation of the claim for allowance purposes,
       and the rights of the claimant to vote on the
       proposed distribution. Understood in this sense,
       a claim filed against the estate is a core
       proceeding because it could arise only in the
       context of bankruptcy. Of course, the state-law
       right underlying the claim could be enforced in a
       state court proceeding absent the bankruptcy, but
       the nature of the state proceeding would be
       different from the nature of the proceeding
       following the filing of a proof of claim.

                               44
Matter of Wood, 825 F.2d 90, 97 (5th Cir. 1987); see also In re
Continental Airlines, 125 F.3d 120, 131(3d Cir. 1999) (citing
and following Wood).

        Nonetheless, the case law belies the assertion that, when
a plaintiff files a proof of claim in a debtor’s bankruptcy case,
it creates core bankruptcy jurisdiction over claims against non-
debtor defendants as well. For example, in Holiday RV
Superstores, Inc., plaintiffs brought state law claims of fraud,
breach of fiduciary duty and successor liability against the
debtor’s principal and successor, but did not name the debtor.
362 B.R. 126 (D. Del. 2007). Although one of the plaintiffs
filed a proof of claim, which included a copy of the complaint,
the court held that it established only that the plaintiffs “may
have a claim against someone other than the estate for the same
claim” and did “not transform a non-core proceeding into a core
proceeding.” Id. at 129. Similarly, in CIT Communications
Financial Corp. v. Level 3 Communications, LLC, plaintiff’s
state court action against non-debtors, asserting breach of
contract, unjust enrichment, and conversion arising from an
equipment lease the defendants had purchased from the debtor,
was found to be “unrelated” to the bankruptcy case. 483 F.
Supp.2d 380 (D. Del. 2007). Despite the defendants’ assertions
that the debtor was the responsible party whom they would need
to implead and the plaintiff’s filing a proof of claim that
concerned the same lease, the court rejected the defendants’
jurisdictional argument because “plaintiffs are alleging two
separate contractual breaches, one attributable to the Debtors

                               45
(before they sold their assets), and the other for defendants’
subsequent, independent failure to make the Monthly Payments
to plaintiff after purchasing those assets.” Id. at 388.

        Exide, however, claims our decision in Travellers Int’l
AG. v. Robinson, 982 F.2d 96 (3d Cir. 1992), dictates that
because the PDH Foreign Entities filed proofs of claim, their
claims are “core” proceedings. We disagree. In Travellers, we
held that “[w]here . . . a creditor has filed a claim, even though
the claim is couched in protective language and is contingent,
that creditor has submitted to the bankruptcy court’s equitable
jurisdiction and waived any Seventh Amendment right to a jury
trial.” Id. at 100. Our decision, however, was limited to “[t]he
sole legal question . . . [of] whether a contingent proof of claim
filed against a bankrupt estate, arising from a judgment in favor
of a creditor . . ., subjects the creditor corporation to the
equitable jurisdiction of the bankruptcy court.” Id. at 97
(emphasis added). We did not purport to do away with our
traditional analysis, nor did we indicate that filing a proof of
claim renders claims between non-debtors “core.”

       We can find no authority to support Exide’s broad
assertion as to the impact of filing proofs of claim. We agree
with the appellants that, as a general rule, “actions asserted by
those plaintiffs who filed actions against non-debtor parties
exclusively, regardless of whether they filed a proof of claim,”
are “presumptively non-core.” In re Best Reception Systems,
220 B.R. at 947; accord In re Harrah’s Entm’t, Inc. Sec. Litig.,

                               46
Civ. A. No. 95-3925, 1996 WL 684463, *3 (E.D. La. Nov. 26,
1996) (“While . . . [Langenkamp] might stand for the
proposition that plaintiffs have waived their jury trial right
against ... [the debtor] by submitting a proof of claim in the . . .
[debtor’s] bankruptcy proceedings, . . . [Langenkamp] do[es] not
stand for the broader proposition that plaintiffs have waived
their jury right in a non-core proceeding . . . against non-debtor
defendants simply by filing a proof of claim against a debtor in
a related bankruptcy case); In re Argus Group, 206 B.R. at 748
(rejecting debtors’ argument that the plaintiff’s proofs of claims
filed in their bankruptcy cases transformed his pre-petition state
law causes of action against the debtor’s operating entity which
was not in bankruptcy into a “core” proceeding).

           The proposition that a contingent proof of claim against
a debtor for contribution or indemnification somehow changes
the analysis, rendering state court claims against non-debtors
“core,” similarly receives no support in the case law. See, e.g,
Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. P’ship, No. 04
Civ 708(GEL), 2004 WL 1048239, *2 (S.D.N.Y. May 7, 2004)
(“Even if the proofs of claim filed by the . . . plaintiffs in the
Jones bankruptcy render their claims against Jones ‘core’ . . .,
they have no effect on the claims against the other defendants
[or] the many cross-claims among defendants other than Jones
. . ., all of which are clearly non-core.”); Hickox v. Leeward Isles
Resorts, Ltd., 224 B.R. 533, 538 (S.D.N.Y. 1998) (finding
related to jurisdiction where “plaintiff’s suit against defendant
over the promissory notes may ‘conceivably’ affect the

                                47
administration of the debtor’s estate” because debtor served as
guarantor of the defendant’s loan and proofs of claim had been
filed); I.G. Davis v. Merv Griffin Co., 128 B.R. 78 (Bankr.
D.N.J. 1991) (finding related to jurisdiction where a proof of
claim filed by non-debtor defendant claimed he was entited to
indemnification by debtor). In Davis v. Life Investors Insurance
Company of America, the court considered and rejected an
argument like the one Exide now advances. 282 B.R. 186 (S.D.
Miss. 2002). There, Life Investors, a non-debtor defendant in
a state court action, attempted to establish “core” bankruptcy
jurisdiction over the state court cause of action because it had an
alleged contractual right to indemnity from debtor for any
judgment the plaintiff might obtain against it and had filed a
proof of claim in the debtor’s bankruptcy case. Id. at 189. The
court was not persuaded and held that the case was “not a core
proceeding merely because the outcome of this case, if adverse
to Life Investors, will result in a claim (or support the existing
contingent claim) by Life Investors against [the debtor’s]
bankruptcy estate which in turn might affect the assets of the
estate.” Id. at 193. In sum, “there is no authority that a party
with a contingent claim for indemnification can bootstrap its
claim onto the Bankruptcy Court’s core jurisdiction.” In re
Amanat, 338 B.R. 574, 581 (Bankr. S.D.N.Y. 2005).

       Yet, the District Court stated that our decision in Pacor
v. Higgins provides just such authority. In concluding that the
PDH Foreign Entities’ claims were “core,” it stated – incorrectly
– that Pacor stands for the proposition that “a debtor’s

                                48
agreement to indemnify a third party gives rise to jurisdiction
over nonbankruptcy controversies with that third party,
especially where [it] has filed a claim against the debtor.” App.
22 (citing Pacor, 743 F.2d at 995). This is not accurate. Pacor
clearly holds that in the event of such an indemnification
obligation, “related to” jurisdiction might exist. To the extent
that the filing of a proof of claim against a debtor who has an
obligation to indemnify is relevant, it is so because it
“transforms the improbable into the conceivable,” thereby
rendering the underlying claims involving non-debtor
indemnitees related to the bankruptcy case – not core. In re
Salem Mills, Inc., 148 B.R. 505, 510 n.9 (N.D. Ill. 1992)
(observing that “[a]bsent the filing of a proof of claim involving
a third-party indemnification action, it is unknown whether the
original indemnitor will assert a claim if prevailing”); I.G.
Davis, 128 B.R. at 99 (“Without doubt, the filing of a proof of
claim [asserting a right to indemnification] and consequently the
demand to share in the pro rata share of distribution of the estate
in connection with [plaintiff’s] action has some effect on
debtor’s estate and its rights, liability and freedom of action.”).
Accordingly, claims between non-debtors may be related to a
bankruptcy case, but generally do not qualify as core
proceedings under 28 U.S.C. § 157(b). See, e.g., Pacor, 743
F.2d at 994-95; In G-I Holdings, Inc., 278 B.R. 376 (Bankr.
D.N.J. 2002); In re Federal-Mogul Global, supra; In re Athos
Steel and Aluminum, Inc., 71 B.R. 525 (Bankr. E.D. Pa. 1987).

                                49
        This case does not differ in any meaningful way from the
cases referenced above in which there were state court claims
against non-debtors, proofs of claim filed, and a duty of the
debtor to indemnify, and the claims were found to be non-core
proceedings.11 Here, the PDH Foreign Entities filed pre-petition
state law causes of action exclusively against the Exide Foreign
Entities, making the claims at issue strictly between non-debtors.
The proofs of claim submitted against Exide are separate from
the right to proceed against the non-debtor foreign entities and
were filed in light of an imminent claim bar date. The proofs of
claim do not assert the state law causes of action against Exide,

    11
         Although Exide argues that this case is not like the
indemnity cases and cites other cases, its citations are
unpersuasive: some involved state lawsuits and proofs of claim
where the debtor was the only defendant, In re S.G. Phillips
Constr., 45 F.3d 702 (2d Cir. 1995); others resulted in decisions
that the claims fell within the bankruptcy court’s purview
because they were “related” to a bankruptcy action, not because
they were “core” proceedings, In re Argus Group, supra, and
still others had a result that actually supports the PDH Foreign
Entities’ position. For instance, Exide cites In re Best Reception
Systems, as establishing that the PDH Foreign Entities’ became
core when the proofs of claim were filed, when in fact the court
in that case held that, although the claims against the debtor
were core given the filing of proofs of claim, the actions
“against non-debtor parties asserted by those plaintiffs who have
filed a proof of claim and named the Debtor as a defendant”
were non-core. 220 B.R. at 944.

                               50
but rather assert a right to collect from Exide, should the PDH
Foreign Entities win a judgment that the Exide Foreign Entities
are unable to satisfy. They are essentially contribution or
indemnification claims where the claimants are looking to the
non-debtors for payment in the first instance and are clearly
different from the breach of contract, conversion, and unjust
enrichment claims asserted against the Exide Foreign Entities in
state court. The language of the proofs of claim filed make
apparent the distinction, noting their position that each of the
Exide Foreign Entities “is primarily liable for its breaches, and
that the Debtor is secondarily liable to the extent that [the
individual Exide Foreign Entity] is unable to satisfy” the
judgment against it. See, e.g., App. 500-01.

        As the PDH entities note, only by erasing the distinction
between the PDH Foreign Entities’ state court claims against the
Exide Foreign Entities and their proofs of claim against the
Exide estate, is Exide able to argue that the PDH Foreign
Entities state law claims are core. To follow Exide’s argument
to its logical conclusion, whenever a plaintiff sues multiple
defendants and one files for bankruptcy, if that plaintiff files a
proof of claim against the debtor, his or her claims against the
remaining co-defendants would become “core” proceedings as
well. We know this is not the case. In the context of mass tort
or securities cases, involving large numbers of defendants and
indemnity relationships, courts routinely find that the remaining

                               51
claims between non-debtors are non-core or even entirely
unrelated to the bankruptcy case.12

       Therefore, we now hold that, by filing proofs of claim in
Exide’s bankruptcy proceeding, the PDH Foreign Entities have
not transformed their state law claims against non-debtor
defendants into core matters that the Bankruptcy Court must
resolve. The claims asserted in the PDH Foreign Entities’
proofs of claim are not the same as the claims against the non-
debtor defendants in the state court action. See In re Argus
Group, 206 B.R. at 748. The PDH Foreign Entities’ filing of
contingent proofs of claim does not render the dispute between
non-debtor plaintiffs and defendants “core.” The proofs of

  12
     See In re Combustion Eng’g, 391 F.3d at 230-31 (finding
no related to jurisdiction over claims against debtor’s co-
defendants in large asbestos litigation despite arguments that the
bankruptcy estate could be affected by future contribution or
indemnification claims); Transamerica Financial Life Ins. Co.
v. Merril Lynch & Co., Inc., 302 B.R. 620 (N.D. Iowa 2003)
(holding that, because Enron was not named as a defendant and
no third party complaint for indemnification had been filed,
claims against Enron bankers and underwriters were not related
to the bankruptcy but simply between non-debtors, despite the
plaintiffs’ filing proofs of claim); In re Federal-Mogul Global,
supra (holding that there was not even “related to” jurisdiction
over asbestos litigation between non-debtors, based upon
possibility that some defendants might assert indemnity claim
against debtors).

                               52
claim for indemnification against the debtor merely demonstrate
that the claims against the non-debtor Exide entities are “related
to” Exide’s bankruptcy case as they “could conceivably” have
an effect on the bankruptcy estate. Pacor, 743 F.2d at 994;
Halper, 164 F.3d at 837 (noting that “[c]ertainty or likelihood is
not a requirement”).13

    13
       Courts often have concluded that claims between non-
debtors were “related to” proceedings where there was a
contractual duty to indemnify and a claim for indemnification or
proof of claim for indemnification. See In re Resource
Technology Corp., No. 03 C 5785, 2004 WL 419918, *4 (N.D.
Ill. Feb. 13, 2004) (holding that a claim between non-debtors
was related to by virtue of the defendant’s having filed a proof
of claim expressing his intention to seek indemnification from
the debtor, which “ultimately may affect the allocation of
property among [the] creditors”); Life Investors Ins. Co., 282
B.R. at 190 (holding that in light of non-debtor defendant's
contractual right to indemnity from debtor for any judgment the
plaintiff might obtain and its filing of a proof of claim, the
claims between non-debtors were “related to” the bankruptcy);
In re Harrah’s Entm’t, 1996 WL 684463 at *2 (in a suit between
non-debtors, “the presence of an indemnification agreement
between several of the . . . defendants and debtor . . . means that
any adverse outcome in this suit against the . . . defendants could
conceivably have an effect on the administration of the
bankruptcy estate.”); Merv Griffin Co., 128 B.R. at 99 (finding
that contractual right to indemnification from debtor establishes
                                                      (continued...)

                                53
        Accordingly, if, after remand, the Bankruptcy Court
decides that, based on the Coordinating Agreement, Exide is the
only proper party against whom the PDH Foreign Entities may
seek a remedy, then the claims would be “core” proceedings. If,
however, the Court decides that the Coordinating Agreement
permits the PDH Foreign Entities to pursue their claims against
the non-debtor defendants, the claims will be not only non-core,
but also subject to mandatory abstention 14 and enforcement of

  13
    (...continued)
“related to” jurisdiction); Philippe v. Sharpe, 103 B.R. 355, 358
(D. Me. 1989) (deciding it had “related to” jurisdiction over
claims between non-debtors where “apparently unconditional
duty to indemnify” would result in automatic liability on the part
of the debtor).
    14
         In “non-core” proceedings, courts must abstain from
hearing a claim if (1) the proceeding is based upon state law
causes of action; (2) the causes of action are “related to” a case
under title 11, but do not “arise under” title 11 or “arise in” a
case under title 11; (3) federal courts would not have jurisdiction
absent its relation to a bankruptcy case; (4) an action is
“commenced” in a state forum of appropriate jurisdiction; and
(5) the action can be timely adjudicated in the state forum. Stoe,
436 F.3d at 213 (summarizing requirements under 28 U.S.C.
§ 1334(c)(2)). Here, there is no dispute as to the first four
factors. PDH Foreign Entities’ claims against the Exide Foreign
Entities constitute a state law cause of action commenced in a
state forum for which there is no independent basis for federal
                                                     (continued...)

                                54
the agreement’s forum selection clause 15 and should accordingly

  14
     (...continued)
jurisdiction other than § 1334(b). As to the fifth factor, the
Exide defendants claim that the Illinois State Court will not
timely adjudicate the claims. The question is “not whether the
action would be more quickly adjudicated in [the bankruptcy
court] than in state court, but rather, whether the action can be
timely adjudicated in the state court.” In re Freehand H.J., Inc.,
2007 WL 1775368, *4 (Bankr. E.D. Pa. June 19, 2007) (quoting
In re Trans World Airlines, Inc., 278 B.R. 42, 51 (Bankr. D. Del.
2002) (emphasis in original)). Here, the state court action was
moving along expeditiously; the judge had made clear his intent
to move the case forward; and the action had been placed in the
docket of the Cook County Circuit Court, designed to facilitate
the adjudication of commercial disputes. Accordingly, we
believe that this action can be timely adjudicated in the state
court.
  15
    A forum-selection clause is presumptively valid and will be
enforced unless the party objecting to its enforcement
demonstrates that enforcement of the clause would violate a
strong public policy of the forum. Coastal Steel Corp. v.
Tilghman Wheelabrator Ltd., 709 F.2d 190, 202 (3d Cir. 1983);
M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972).
Where the claims at issue are not “core” bankruptcy matters, this
rule applies equally to Chapter 11 debtors.          See Diaz
Contracting, 817 F.2d at 1051-53; In re Kamine/Besicorp
Allegany, L.P., 214 B.R. 953, 972-74 (Bankr. D.N.J. 1997).
                                                  (continued...)

                               55
be returned to the Illinois state court for trial.

       D. “Intertwined” Claims and In re RBGSC Inv. Corp

        Although appellees rely heavily on their sole indemnitor
theory, they aver there is yet another ground on which to base a
finding of core jurisdiction. They say, “assuming arguendo that
the PDH Foreign Entities had independent claims against the
Non-Debtor Affiliates . . . the Bankruptcy Court still has ‘core’
matter jurisdiction over the removed State Court Actions”
because of the close-knit indemnitor and subsidiary relationships
between the parties. Appellee’s Br. 27 n.30 (citing In re RBGSC
Inv. Corp., 253 B.R. at 379). Urging us to adopt the approach
of the district court in In re RBGSC Inv. Corp., they claim that
a state court action involving debtors and non-debtors becomes
core if the core and non-core claims are “‘so intertwined’ that
merely to ‘disentangle’ them would be ‘co-extensive with a
resolution of the merits of the disputes.’” Id. The Exide Entities

  15
     (...continued)
         Here, the Coordinating Agreement specifies that the
parties will file any suits arising out of the sales agreements to
a state or federal court in Cook County, Illinois. If the claims at
issue are non-core, this forum selection clause should be
enforced.

                                 56
made a similar argument to the Bankruptcy Court, which it
seemed to credit.16

    16
         The Bankruptcy Court also attached a great deal of
significance to the relative amounts in dispute between PDH
USA’s claims and the PDH Foreign Entities’ claims. It stated,
“the magnitude of the dispute is about $20 million, 16 million of
which is acknowledged to be sought against Exide alone.
Doesn’t that make the dispute as between non-debtor entities the
tail of the dog?” App. 54. The court suggested that “judicial
economy and efficiency” were appropriate factors to consider
with regard to the “core” determination. App. 53. This was not
correct. Pacor, 743 F.2d at 994 (observing that “[j]udicial
economy itself does not justify federal jurisdiction”). The test
for finding jurisdiction is not a mathematical one that relies on
weighing the value of total claims against non-debtors against
total claims against the debtor.
        The size of the claims, relative to the total bankruptcy
estate, may be a consideration in evaluating “related to”
jurisdiction. See, e.g., Phar-Mor, Inc. v. Coopers & Lybrand, 22
F.3d 1228, 1235 n.10 (3d Cir. 1994) (“It is essentially
undisputed that removal pursuant to § 1452 was appropriate
because the Phar-Mor/Coopers lawsuit will have a direct and
substantial impact on the size of Phar-Mor’s asset pool available
for distribution to creditors and therefore is ‘related to’ the
bankruptcy case pending in Ohio.”). However, here, the size of
the claims is relatively insignificant. In Exide’s bankruptcy
case, the over-6,100 proofs of claims filed in liquidated amounts
totaled approximately $4.4 billion (another approximately 1,100
                                                     (continued...)

                                57
        Lest the Bankruptcy Court be persuaded by Exide’s
intertwinement argument on remand, we now consider and
reject it.

        In In re RBGSC Inv. Corp., the only case Exide cites for
the rule that intertwined claims become core, plaintiffs asserted
a variety of state court claims, including injunction, specific
performance, defamation, and breach of various agreements,
arising out of a series of complex business arrangements, against
the debtor RBGSC and non-debtor defendants jointly. After
RBGSC removed the state court action to bankruptcy court and
filed a motion for relief from orders the state court had entered
prior to removal, its co-defendants filed similar motions; in
response, the plaintiffs moved for abstention and remand.
253 B.R. at 372-73. The bankruptcy court denied the plaintiffs’
motion on the ground that their claims against the non-debtor
defendants were “core” and essentially claims against the
debtor. Id. at 373.

       The district court on appeal held that:

       Where the links between and among the various
       parties, including the state court plaintiffs and the

  16
    (...continued)
proofs of claim were filed as unliquidated); the contingent
proofs of claim filed by the PDH Foreign Entities are – at
approximately $9.9 million – the proverbial drop in the bucket.

                                58
       debtor and non-debtor defendants, are so
       intertwined by virtue of the many agreements
       defining these relationships, we cannot see how
       Appellants’ state court claims could be viewed, in
       the wake of the bankruptcy, as anything other than
       a claim on the estate.

Id. at 379. Because plaintiffs had asserted state court claims
against RBGSC and the non-debtor defendants jointly, the court
concluded that “identifying claims from the state court
complaint that are not tied to RBGSC would in itself present a
daunting legal task” and, therefore, the claims against the non-
debtors were core proceedings whose determination “would be
co-extensive with a resolution of the merits of the disputes.” Id.
at 380.

       As an initial matter, it strikes us that In re RBGSC Inv.
Corp. is distingushable from the present case. Here, instead of
asserting claims directly against the debtor, jointly with other
defendants, each of the PDH Foreign Entities made discrete
claims against each of the non-debtors and did not assert those
claims against debtor or assert joint liability. Indeed, it is simple
to separate the PDH Foreign Entities’ claims against the Exide
Foreign Entities from the claims against the debtor, and from
one another, because they are stated separately. Each referenced
separate agreements and was filed against either one or two of
the Exide Foreign Entities.

                                 59
         Nonetheless, insofar as In re RBGSC Inv. Corp. holds
that non-core claims against non-debtors are rendered core
because of close business relationships between the debtor and
non-debtors or “intertwinement” with a claim against a debtor,
it is legally unsound and must be overruled. We reiterate that
courts must engage in a claim-by-claim analysis to determine
whether a proceeding is core. Halper, 164 F.3d at 836-37. Each
state court claim removed to bankruptcy court must be
considered individually; non-core claims do not become core
simply by virtue of being pursued in the same litigation as core
claims. Accordingly, the intertwinement theory cannot be
sustained.

        We note that the In re RBGSC Inv. Corp. decision has not
received subsequent support among district courts in this circuit
or others. See, e.g., Mirant Corp. v. Southern Co., 337 B.R.
107, 119 (N.D. Tex. 2006) (disagreeing with the bankruptcy
court that “non-core claims were so intertwined with the other
claims in the complaint” that core bankruptcy jurisdiction lay);
Davis, 282 B.R. at 193 (rejecting defendant’s argument that the
state court cause of action “is a core proceeding merely because
it is ‘intertwined with’ its indemnity claim”); In re Winstar
Commc’n, Inc., 284 B.R. 40, 50 (Bankr. D. Del. 2002)
(evaluating claims arising out of a contract between plaintiff and
three sellers, two chapter 11 debtors and wholly-owned
subsidiary non-debtor, and holding that “the mere fact that there
may be common issues of fact between a civil proceeding and

                               60
a controversy involving the bankruptcy estate does not bring the
matter within the scope of” section 1334(b)).

       Accepting the rule that Exide urges would turn virtually
every claim contained in an action in which the debtor is one of
the defendants and which is later removed to bankruptcy court
into a core proceeding. The PDH Foreign Entities cannot be
required to have their rights against Exide’s non-debtor
subsidiaries be determined by the Bankruptcy Court solely
because Exide invoked its protection. Adoption of the
“intertwinement theory” would cause debtors to

       bring[] every wholly owned subsidiary into every
       Bankruptcy case regardless of the circumstances
       and without the safeguards afforded by schedules,
       statements of financial affairs, notices to
       creditors, or meetings of creditors . . . [and] could
       result in debtors and others abusing the system by
       withholding from Bankruptcy or bringing into
       Bankruptcy subsidiaries in a revolving door
       fashion.

In re Winstar Commc’n, 284 B.R. at 51. Moreover, permitting
core bankruptcy jurisdiction to stretch so far would present
serious constitutional questions. Mirant Corp., 337 B.R. at 119
(observing that “[t]he principles announced in Marathon would
be violated if such an intertwinement theory were to be given
effect”).

                                61
       Thus, we now conclude that the “intertwinement” theory
espoused by In re RBGSC Inv. Corp has no place in our “core”
jurisprudence.

       IV. Conclusion

       As we set forth above, the Bankruptcy Court committed
several errors in reaching the conclusion that the claims at issue
here are “core” proceedings under 28 U.S.C. §§ 157(b)(2)(B)
and (C). The state of the record, however, does not permit us to
decide whether the claims can properly be deemed “core.”

       We, therefore, will VACATE the District Court’s
Memorandum Order entered on March 22, 2007, and REMAND
the case to the District Court with instructions to:

      (1) VACATE the decisions of the Bankruptcy Court
dated December 11, 2003 (entered December 15, 2003), and
June 16, 2005 (entered June 20, 2005), and

      (2) REMAND this case to the Bankruptcy Court for
proceedings consistent with this Opinion.

________________

                               62