IN RE: Phillip L. Reed

Filing 7

ORDER AND REASONS denying 1 Motion to Withdraw Reference. Signed by Judge Jane Triche Milazzo on 5/5/2017. (ajn)

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

CIVIL ACTION
IN RE: PHILLIP L REED

NO: 17-908
SECTION: “H”(5)

ORDER AND REASONS
Before the Court is a Motion to Withdraw the Reference from
Bankruptcy Court (Doc. 1). For the following reasons, this Motion is DENIED.
BACKGROUND
On March 19, 2014 Phillip L. Reed (the “Debtor”) filed a voluntary
petition for relief under Chapter 7 of the Bankruptcy Code. Trustee David V.
Adler (the “Trustee”) initiated the instant adversary proceeding against
Defendants The Schumacher Group of Louisiana, St. Martin Emergency
Group, LLC, Lafourche Emergency Group, LLC, and Eunice Emergency
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Group, LLC asserting four causes of action: (1) a claim to recover the value of
transferred receivables made within 2 years of the petition date pursuant to
11 U.S.C § 548(a)(1)(A); (2) a claim to recover the value of transferred
receivables made within 2 years of the petition date brought pursuant to 11
U.S.C. § 548(a)(1)(B); (3) a claim to recover the value of transferred receivables
made within 2 years of the petition date brought pursuant to 11 U.S.C. §
544(b); and (4) alternatively, a claim for the collection of outstanding debt owed
to the debtor brought pursuant to 11 U.S.C. § 542(b). The Defendants have
filed the instant Motion to Withdraw the Reference, which the Trustee opposes.
LAW AND ANALYSIS
This Court’s decision in this matter is governed by 28 U.S.C. § 157(d),
which provides for both permissive and mandatory withdrawal. It states that:
The district court may withdraw, in whole or in part, any
case or proceeding referred under this section, on its own motion
or on timely motion of any party, for cause shown. The district
court shall, on timely motion of a party, so withdraw a proceeding
if the court determines that resolution of the proceeding requires
consideration of both title 11 and other laws of the United States
regulating organizations or activities affecting interstate
commerce.
This case presents an issue of permissive withdrawal. Although “cause shown”
is not defined by statute, the Fifth Circuit has indicated that the district court
should consider the following factors in articulating the foundation for its
decision:
(1) whether the matter at issue is a core or a non-core
proceeding, (2) whether the proceedings involve a jury demand,
and (3) whether withdrawal would further the goals of (a)
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promoting uniformity in bankruptcy administration, (b) reducing
forum shopping and confusion, (c) fostering the economical use of
the debtor’s and creditors’ resources, and (d) expediting the
bankruptcy process.1
In their Motion, Defendants argue that their jury demand entitles them to
immediate withdrawal of the reference, as the Bankruptcy Court cannot
conduct a jury trial. Though the Trustee does not appear to dispute that
Defendants are entitled to a jury trial in this Court should the same become
necessary, he argues that withdrawal of the reference is premature until the
Bankruptcy Court has determined all pretrial matters.
Multiple courts, including other sections of court in this District, have
found that a motion to withdraw is premature until such time as it is
determined that a jury trial must be conducted.2 Indeed, “[u]ntil that time, it
may better serve judicial economy . . . for the bankruptcy court to resolve pretrial matters.”3 “Under the circumstances, the Court need not decide whether
a jury trial is proper, but may deny the motion to withdraw the reference until
such time as it becomes clear that a jury trial, if available, is necessary.”4
Here, it is not yet clear that a jury trial will be necessary. Indeed, the
Court notes that there is presently pending before the Bankruptcy Court a
Motion for Summary Judgment wherein Defendants seek dismissal of all
claims asserted against them in an adversary proceeding. The Court finds that

In re Gulf States Long Term Acute Care of Covington, L.L.C., 455 B.R. 869, 874
(E.D. La. 2011) (citing Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 998 (5th
Cir. 1985)).
2 Id. at *5 (E.D. La. Sept. 19, 2006); Post Confirmation Bd. of Wadleigh Energy Grp.,
Inc. v. Wadleigh, 516 B.R. 850, 853 (E.D. La. 2014).
3 In re OCA, Inc., 2006 WL 4029578 at *5.
4 Id. at *5.
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it could benefit from the Bankruptcy Court’s considerable expertise in
resolving this Motion, as it involves claims arising under the Bankruptcy Code.
“Indeed, allowing the bankruptcy court time ‘to function much like [a]
magistrate[ ] to the district court on matters that are merely ‘related to’ a
bankruptcy,’ or that are otherwise unable to be finally adjudicated by that
court, could considerably expedite the litigation.”5 Accordingly, the Court finds
that, in the interests of judicial efficiency, the reference should be maintained
at this time.

Once it becomes clear that a jury trial must be conducted,

Defendants may re-urge their Motion.
CONCLUSION
For the foregoing reasons, Defendants’ Motion to Withdraw the
Reference is DENIED.
New Orleans, Louisiana this 5th day of May, 2017.

____________________________________
JANE TRICHE MILAZZO
UNITED STATES DISTRICT JUDGE

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Post Confirmation Bd. of Wadleigh Energy Grp., Inc, 516 B.R. at 856.

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