Tembee Industries, Inc. et al v. Amzak Capital Management et al

Filing 7

RULING AND ORDER as to 1 Motion to Withdraw Reference. The motion is GRANTED and the jury demand is reinstated. Signed by Judge James J. Brady on 1/23/2012. (LSM) Modified on 1/23/2012 to edit text (LSM).

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
TEMBEC INDUSTRIES
CIVIL ACTION
VERSUS
NO. 11-622-JJB
AMZAK CAPITAL MANAGEMENT

RULING AND ORDER
This matter is before the court on a motion by Amzak Capital Management to
withdraw the reference to the bankruptcy court. The motion is opposed by Stewart Title
Guaranty Company.
The parties agree that there are several factors to consider in determining whether
a reference should be withdrawn: whether it is core or non-core; whether there is a jury
demand; the goals of promoting uniformity in bankruptcy administration; reducing forum
shopping; fostering economic use of the debtors’ and the creditors’ resources; and
expediting the bankruptcy process. Holland America Ins. Co. v. Roy, 777 F.2d 992, 999
(5th Cir. 1985).
Amzak makes several arguments relative to the above-cited factors. Preliminarily,
however, Amzak contends that the recent Supreme Court decision in Stern v. Marshall,
131 S.Ct. 2594 (2011) casts doubt on the bankruptcy court’s jurisdiction and that the
reference should be withdrawn as a precautionary matter. Amzak points to the fact that
Judge Dodd held that this is a non-core proceeding and that after the trial he would
accordingly be issuing findings of fact and conclusions of law. Then a couple of months
later when the Stern decision came out, Judge Dodd promptly ordered the parties to file

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Bankruptcy

briefs on jurisdiction. Prior to the expiration of the briefing deadline, Amzak filed its motion
in this court to withdraw the reference.
Returning to address the factors pertinent to withdrawing the reference, Amzak
argues that it retains the right to a jury trial if the reference is withdrawn. Additionally, it
contends that the claims between Amzak and Stewart involve state law only and will have
a de minimus effect on the bankruptcy. Finally, it denies forum shopping and argues that
the bankruptcy court has no greater familiarity with the claims and that a withdrawal of the
reference would not slow down the process of winding down the estate.
In opposition, Stewart Guaranty argues that Stern is inapplicable to non-core
matters from which the bankruptcy court merely prepares proposed findings of fact and
conclusions of law. Stewart Guaranty further argues that Amzak “newfound desire” to
proceed in the district court “contradicts its past briefing.” As to the relevant factors to the
considered, Stewart Guaranty contends that Amzak simply puts the wrong spin on all of
them.
Having carefully considered the arguments, the court finds that the reference should
be withdrawn. At present, there is some uncertainty cast by the Stern decision. Moreover,
an analysis of the above-cited factors weighs in favor of withdrawing the reference. Amzak
retains its right to a jury trial in this non-core proceeding; the claims left for trial are purely
ones of state law; it does not appear that there would be any adverse impact on the
winding down process; and, judicial efficiently is as readily served by withdrawing the
reference as not.
Accordingly, the motion (doc. 1) to withdraw the reference is GRANTED and the jury

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demand is reinstated.
Baton Rouge, Louisiana, January 23, 2012.

JAMES J. BRADY, JUDGE
MIDDLE DISTRICT OF LOUISIANA

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