Bridgetree, Inc. et al v. RED F Marketing LLC et al

Filing 241

ORDER to withdrawreference of the following three cases from the Bankruptcy Court: RedF Marketing, LLC (Case No.12-32462 (JCW)), Target Point, LLC (Case No. 12-32463 (JCW)), and Mr. Daniel Roselli (CaseNo. 12-32461 (JCW)). Lifting Bankruptcy Stay. Stay pursuant to 11U.S.C. § 362 otherwise remains in full effect.. Signed by District Judge Frank D. Whitney on 10/19/2012. (blf)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
Civil Action No.: 3:10-cv-228-FDW-DSC
BRIDGETREE, INC., and
TWO BIT DOG, LLC,

)
)
)
Plaintiffs,
)
)
vs.
)
)
RED F MARKETING LLC, TARGET
)
POINT, LLC, DANIEL ROSELLI, TENG )
LI, MARK EPPERLY, and ELTON T.
)
SCRIPTER,
)
)
Defendants,
)
)
vs.
)
BRIDGETREE, INC., MARK BECK, and )
CHRIS TALLEY,
)
)
Counterclaim Defendants.
)
)

ORDER

THIS MATTER is before the Court sua sponte following Plaintiffs’ filing of a “Notice of
Bankruptcy Stay as to Defendants RedF Marketing, LLC; Target Point, LLC; and Daniel Roselli.”
(Doc. No. 240). The Notice indicates that on October 12, 2012, involuntary Chapter 7 Bankruptcy
Petitions were filed against RedF Marketing, LLC (Case No. 12-32462 (JCW)), Target Point, LLC
(Case No. 12-32463 (JCW)), and Mr. Daniel Roselli (Case No. 12-32461 (JCW)). These three
debtors in the bankruptcy proceedings are also Defendants in this action. The Court hereby takes
judicial notice of the dockets in those proceedings and notes that Bridgetree filed all three
involuntary petitions. Bridgetree, a Plaintiff in this action, prevailed at trial and received a monetary
judgement against these three debtors. Pursuant to 11 U.S.C. § 362, the bankruptcy filings result
in a stay of all proceedings against the debtors, including the stay of resolution of the multiple

pending post-trial motions in the case at bar. Although no party has requested such, this Court,
acting sua sponte, will WITHDRAW REFERENCE from the bankruptcy court in order to resolve
the pending post-trial motions and any appeal for the reasons explained below.
Pursuant to 28 U.S.C. § 1334, the United States District Courts have original jurisdiction
over all bankruptcy matters and related proceedings. Nevertheless, 28 U.S.C. § 157(a) permits
district courts to refer bankruptcy matters to the bankruptcy courts, which this district does. Under
28 U.S.C. § 157(d), the district court is permitted to withdraw–in whole or in part–any case or
proceeding that is referred pursuant to 28 U.S.C. § 157. Such withdrawal may be upon the motion
of a party or “on its own motion.” 28 U.S.C. § 157(d). The district court’s withdrawal is either
mandatory or permissive. Mandatory withdrawal occurs when “resolution of the proceeding
requires consideration of both Title 11 and other laws of the United States regulating organizations
or activities affecting interstate commerce.” Id. On the other hand, “[p]ermissive withdrawal of the
reference to the bankruptcy court is within the sound discretion of the district court and is predicated
upon cause shown on a case-by-case basis.” In Re: TMG Liquidation Co., 2012 WL 1986526, 7:12629 (D.S.C. 2012). Here, the Court need not decide whether withdrawal is mandatory, but instead
exercises its discretion “for cause shown.”
While neither the statute nor the Fourth Circuit have explicitly defined “cause,” see In re
U.S. Airways Group, Inc., 296 B.R. 673, 681 (E.D.Va. 2003), (collecting cases from other circuits
discussing relevant factors to determine “cause shown”), several district courts within the Fourth
Circuit have considered the following factors:
(1) whether the proceeding is core or non-core; (2) the uniform administration of
bankruptcy proceedings; (3) expediting the bankruptcy process and promoting
judicial economy; (4) the efficient use of debtors' and creditors' resources; (5) the
reduction of forum shopping; and (6) the preservation of the right to a jury trial.
Vieira v. AGM, II, LLC, 366 B.R. 532, 538 (D.S.C.2007) (citing In re U.S. Airways
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Group, Inc., 296 B.R. 673, 681 (E.D.Va.2003)).
In re Joe Gibson's Auto World, Inc., 7:11-2482-TMC, 2012 WL 1107763 (D.S.C. Apr. 2, 2012).
Here, factors (3) and (4) substantially weigh in favor of withdrawal. The procedural posture
of this case uniquely warrants withdrawal of reference. Plaintiffs filed the instant action over twoand-a-half years ago on May 18, 2010. (Doc. No. 1). Since that time, the undersigned has presided
over numerous hearings (including a hearing on summary judgment motions), a lengthy judicial
settlement conference, and a two-week-long jury trial. All three involuntary petitions filed in the
bankruptcy court by Plaintiff Bridgetree directly relate to the judgment debt arising out of the case
at bar. Because the post-trial motions and any appeal in the case at bar would result in a final
judicial determination of that judgment debt, the Court finds that it would be substantially more
efficient for the parties and would promote judicial economy if this Court could resolve those posttrial motions, allow the appeal to go forward, and liquidate Bridgetree’s claims against the Debtors.
These factors decisively outweigh any other factors under the specific facts of this case and where
the finality of the jury verdicts–and thus, the debts–remains outstanding but substantially near
completion.
IT IS THEREFORE ORDERED that this Court will exercise its discretion to withdraw
reference of the following three cases from the Bankruptcy Court: RedF Marketing, LLC (Case No.
12-32462 (JCW)), Target Point, LLC (Case No. 12-32463 (JCW)), and Mr. Daniel Roselli (Case
No. 12-32461 (JCW)).
IT IS FURTHER ORDERED that the Court also sua sponte lifts the bankruptcy stay as to
this litigation in each of these three bankruptcy cases for the limited purpose of liquidating the claim
by resolving the pending post-trial motions in the case at bar and allowing any appeal arising
therefrom. See generally In re Robbins, 964 F.2d 342, 345-46 (4th Cir. 1992) (discussing court’s
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discretion to lift automatic stay) (“The Senate Report accompanying the Bankruptcy Reform Act
of 1978 stated that: ‘[I]t will often be more appropriate to permit proceedings to continue in their
place of origin, when no great prejudice to the bankruptcy estate would result, in order to leave the
parties to their chosen forum and to relieve the bankruptcy court from many duties that may be
handled elsewhere.’”)(citing S.Rep. No. 989, 95th Cong., 2d Sess. 50 (1978), reprinted in 1978
U.S.C.C.A.N. 5787, 5836)(other citations omitted).
IT IS FURTHER ORDERED that for all other intents and purposes, the stay pursuant to 11
U.S.C. § 362 otherwise remains in full effect. Furthermore, the Court hereby REFERS and returns
back to the bankruptcy court all other aspects of these cases.
Finally, the Clerk’s office is respectfully DIRECTED to send a certified copy of this Order
to all counsel of record in this case and to the United States Bankruptcy Court for the Western
District of North Carolina. The Court further requests the Clerk for the Bankruptcy Court to file a
copy of this Order in the three pending cases: RedF Marketing, LLC (Case No. 12-32462 (JCW)),
Target Point, LLC (Case No. 12-32463 (JCW)), and Mr. Daniel Roselli (Case No. 12-32461 (JCW)).
IT IS SO ORDERED.
Signed: October 19, 2012

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