Supreme Court Grants Cert in the next Stern v. Marshall issue - July 1, 2014 - Wellness International Network, Limited, et al., Petitioners Case No. 13-935

On July 1, 2014, the Supreme Court granted Cert limiting Cert to Questions 1 and 3 as indicated in the petition.  Questions 1 and 3 are as follows:

1. Whether the presence of a subsidiary state property law issue in a 11 U.S.C. § 541 action brought against a debtor to determine whether property in the debtor’s possession is property of the bankruptcy estate means that such action does not  "stem[] from the bankruptcy itself” and therefore, that a bankruptcy court does not have the

constitutional authority to enter a final order deciding that action.


GRANTED CERT

2.  Whether Article III permits the bankruptcy courts to exercise the judicial power of the United States over claims against a debtor where the debtor has consented to the exercise of such judicial power by voluntarily filing for bankruptcy relief.

DENIED CERT

3.  Whether Article III permits the exercise of the judicial power of the United States by the bankruptcy courts on the basis of litigant consent, and if so, whether implied consent based on a litigant’s conduct is sufficient to satisfy Article III.

GRANTED CERT

Whether bankruptcy courts have the statutory authority to submit proposed findings of

fact and conclusions of law for de novo review by a district court in a "core" proceeding under 28 USC 157(b).

DENIED CERT

Jul 1 2014

Petition GRANTED limited to Questions 1 and 3 presented by the petition. 7-1-14 - Cert Granted See Prior Blog on Case - Wellness Blog 2013

Supreme Court - Executive Benefits Case - Analyzed by a Ohio District Court (2014) - Granting a Motion to Withdraw the Reference

An Ohio District Court stayed a motion to withdraw the reference pending the decision by the Supreme Court in the Executive Benefits case.  The Ohio case had similar facts as to Executive Benefit in which the Trustee filed an adversary complaint to avoid a fraudulent transfer against a third party who was not a creditor....but....the third party made demand for a jury trial. 


The Ohio District Court determined that the case was a "Stern" claim and the bankruptcy court could submit proposed findings of act and conclusions of law.  The Court found that the Bankruptcy Court had jurisdiction to handle the pre-trial supervision of the case but granted the motion to withdraw the reference for permissive withdrawal under 157(d) ("for cause shown").  Although cause is not defined the court should look at  a variety of factors (1) core/non core; (2) legal/equitable claims; (3) efficient use of judicial resources and (4) effect of the ruling on uniformity in administering bankruptcy law. 


In this case, the Court noted that in any instance the Bankruptcy Court's decision would have to be reviewed de novo by the District Court; that the Defendant has exercised her right to a jury trial and that the defendant did not consent to the jurisdiction of the bankruptcy court.  Accordingly, the Court granted the motion for permissive withdrawal of the reference.


Query:  Will District Court's be forced to handle more bankruptcy related cases?

Emerson v. Order & Alan J. Treinish

United States District Court for the Northern District of Ohio, Eastern Division

June 20, 2014, Decided

CASE NO. 1:13-mc-52

Stern v. Marshall analyzed by 7th Cir. - WELLNESS INTERNATIONAL NETWORK 8-21-13

Admittedly I have not fully reviewed nor analyzed the case but late yesterday I was advised of the new 7th Circuit case....check it out below:
 
We hold that a constitutional objection based on Stern is not waivable because it implicates
separation‐of‐powers principles. 

We also hold that the bankruptcy judge lacked constitutional

authority to enter a final judgment on the alter‐ego claim. In

contrast, we hold that the bankruptcy judge had constitutional

authority to enter final judgment on the first four counts of the

adversary complaint, each of which were objections to the

discharge of Sharif’s debts. Finally, we hold that the entry of

default judgment and awarding of fees were proper sanctions

under the circumstances, though we remand for a recalculation

of fees.
Wellness International