AMBALO v. 6830 ROUTE 9 GROUP, LLC. et al

Filing 33

MEMORANDUM AND ORDER that the action is REFERRED to the United States Bankruptcy Court, District of New Jersey, in re: 12-24532, styled In re: 6830 Route 9 Group, LLC; that the Clerk shall administratively terminate the action without prejudice. Signed by Judge Peter G. Sheridan on 1/7/2013. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

OFER RAPHAEL AMBALO,
Civil Action No. 12-1173 (PGS)
Plaintiff,
v.
MEMORANDUM AND ORDER
6830 ROUTE 9 GROUP, LLC, et
al.
Defendants.

THE PLAINTIFF brings this action to recover damages for,
inter alia, breach of contract against defendants — 6830 Route 9
Group, LLC, Trop Manager, LLC, Keygate Investments, LLC, Alan
Rubin,

Israel

“Izzy”

Shur,

(Dkt. Entry no. 1, Compl.)

Dov

Trop,

and

Eliezer

Schwebber.

The plaintiff alleges that plaintiff

loaned defendant 6830 Route 9 Group, LLC, $460,000 pursuant to a
loan agreement.

The loan was allegedly guaranteed by the other

defendants in the action.

On June 5, 2012, subsequent to the

filing of the Complaint in this action, defendant 6830 Route 9
Group (the “Debtor”) filed a voluntary petition under Chapter 11
of the United States Bankruptcy Code with the United States
Bankruptcy Court for the District of New Jersey commencing a
Chapter 11 case.

See In re 6830 Route 9 Group, LLC, No. 12-

24532 (Bankr. D.N.J. 2012)(the “Bankruptcy Case”).

1

The Debtor

included plaintiff as a holder of a general unsecured claim on
Schedule F filed with the Petition in the amount of $515,200
based on plaintiff’s allegations in the Complaint, and indicated
on Schedule F that such claim is disputed.
AN ACTION is “related to” bankruptcy if “the outcome of
that proceeding could conceivably have any effect on the estate
being administered in bankruptcy”.

Pacor, Inc. v. Higgins, 743

F.2d 984, 994 (3d Cir. 1984) (emphasis omitted); see In re
Combustion Eng’g, 391 F.3d 190, 226 (3d Cir. 2004).1

To be

“related to” bankruptcy, the action need not be against the
debtor or the debtor’s property.

Pacor, Inc., 743 F.2d at 994.

An “action is related to bankruptcy if the outcome could alter
the debtor’s rights, liabilities, options, or freedom of action
(either positively or negatively) and which in any way impacts
upon the handling and administration of the bankrupt estate”.
Id.; see also In re Combustion Eng’g, 391 F.3d at 226.
Proceedings arising in or related to a case under title 11 may
be referred to bankruptcy courts for the district in which the
1

The “Supreme Court effectively has overruled Pacor with respect
to its holding that the prohibition against review of a remand
order in 28 U.S.C. § 1447(d) is not applicable in a bankruptcy
case. See Things Remembered, Inc. v. Petrarca, 516 U.S. 124 . .
. (1995). But Things Remembered does not disturb the authority
of Pacor on the points for which we cite it. In fact, the Pacor
test has been enormously influential as a cogent analytical
framework relied upon by our sister circuits more than any other
case in this area of the law.” In re Resorts Int’l, 372 F.3d 154,
164 n.6 (3d Cir. 2004) (quotations and citation omitted).
2

action is pending.

See 28 U.S.C. § 157(a) (stating “district

court may provide that any or all cases under title 11 and any
or all proceedings arising under title 11 or arising in or
related to a case under title 11 shall be referred to the
bankruptcy judges for that district”.)
THIS ACTION is related to the Bankruptcy Case because an
outcome here could affect the estate being administered, as the
plaintiff alleges the debtor entered into a loan agreement with
plaintiff prior to the filing of the bankruptcy petition.
the Bankruptcy Case is being actively litigated.

Also,

See Docket, In

re 6830 Route 9 Group, LLC, No. 12-24532(Bankr. D.N.J.)

Thus,

the interests of justice and the convenience of the parties
favor a transfer of venue, as the United States Bankruptcy Court
for the District of New Jersey will be better positioned to
determine how and to what extent the plaintiff’s claims will
affect (1) the bankruptcy estate, (2) the estate’s efficient
administration, and (3) asset distribution.

See 28 U.S.C. §

1412; Abrams, 2006 WL 2739642, at *9; Hohl, 279 B.R. at 178.
THE COURT intends to refer this action to the United States
Bankruptcy Court, District of New Jersey, immediately.2

2

The extent of the Bankruptcy Court’s authority over this action
depends on whether it is (1) a “core proceeding” or (2) a “noncore proceeding” otherwise related to a case under title 11. 28
U.S.C. § 157(b)(1)-(4); see 28 U.S.C. § 157(b)(1) (stating
bankruptcy court may enter order or judgment in core
proceeding); 28 U.S.C. § 157(c)(1) (stating bankruptcy court
submits proposed findings of fact and conclusions of law to
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ORDER
For the reasons set forth above,
IT IS on this 7th day of January, 2013, ORDERED that the
action is REFERRED to the United States Bankruptcy Court,
District of New Jersey, in re: 12-24532, styled In re: 6830
Route 9 Group, LLC; and
IT IS FURTHER ORDERED that the Clerk administratively
terminate the action, without prejudice to the right of the
parties to reopen the proceedings for good cause shown for the
entry of any stipulation or order, or for any other purpose
required to obtain a final determination of the litigation.

s/Peter G. Sheridan
PETER G. SHERIDAN, U.S.D.J.

January 7, 2013

district court in non-core proceedings, and final order will be
entered by district court after considering same); see also
Mullarkey v. Tamboer (In re Mullarkey), 536 F.3d 215, 220-21 (3d
Cir. 2008) (discussing bankruptcy court’s authority). The
Bankruptcy Court will determine whether this action is a core
proceeding or related-to proceeding. See 28 U.S.C. § 157(b)(3);
Certain Underwriters at Lloyd’s of London v. Otlowski, No. 083998, 2009 WL 234957, at *2 (D.N.J. Jan. 29, 2009) (stating
“Section 157(b)(3) calls for the bankruptcy judge to make the
initial decision on whether a case is a core proceeding, and its
language is not ambiguous”); E. W. Trade Partners v. Sobel WP
(In re E. W. Trade Partners), No. 06-1812, 2007 WL 1213393, at
*3-4 (D.N.J. Apr. 23, 2007) (same).
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