Free Order on Motion to Withdraw Reference - District Court of Delaware - Delaware

Case 1:05-cv-00039-KAJ Document 7 Filed 07/O1/2005 Page 1 of 4
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
IN RE: ) Chapter 11
) Bankruptcy Case No. O1-1230 (MFW) I
U.S.A. FLORAL PRODUCTS, INC., )
etal., )
I
Debtors. )
————-———— I
ROBERT F. TROISIO, Plan )
Administrator pursuant to the Amended ) Adversary Proceeding No. O3-52514
Joint Plan of Liquidation for the estate )
of USA FLORAL PRODUCTS, INC. )
and its affiliate debtors, )
) Civil Action No. 05-00039-l Plaintiff, )
I
v. )
I
ROBERT POIRIER, VINCENT W. )
EADES, EDWARD J. MATHIAS, )
GUSTAVO MORENO, and )
JONATHAN LEDECKY )
I
Defendants. )
MEMORANDUM ORDER
Before me is a motion to withdraw the reference (Docket Item ["D.|."] 1; the
"Motion") filed by Robert Poirier, Vincent W. Eades, Edward J. Mathias, Gustavo
Moreno and Jonathan Ledecky (collectively, "Defendants"). Defendants' Motion
requests that adversary proceeding number O3-52514 be withdrawn from the U.S.
Bankruptcy Court for the District of Delaware, pursuant to 28 U.S.C. § 157(d), and
further requests a waiver of the requirement that a contemporaneous motion be filed to
determine whether the matter is core or non—core, as required under Bankruptcy
Courts’s Local Rule 5011-1. (D.I. 1 at 1.) Also before me is Defendants request for

Case 1:05-cv-00039-KAJ Document 7 Filed 07/01/2005 Page 2 of 4
oral argument on the Motion. (D.I. 2.) For the reasons that follow, the Motion will be
granted and the request for oral argument will be denied as moot.
On April 1, 2003, Robert F. Troisio, Plan Administrator pursuant to the Amended
Joint Plan of Liquidation for the estate of USA Floral Products, Inc. and its affiliate
debtors (“PIaintiff“) commenced this action by filing a Complaint alleging, inter alia,
breaches of fiduciary duty by Defendants in their capacity as officers and directors of
the debtor (Count I), negligent misrepresentation (Count Il), and waste of corporate l
assets (Count Ill). (D.l. 3 at 2.) On November 12, 2003, Plaintiff filed an amended
complaint, amending counts I-lll and adding claims asserting fraudulent conveyances
(Counts IV and V.). (Id. at 2.) On January 12, 2004, Defendants filed a motion to
dismiss count I, II, III and V. (D.l. 1 at 4.) On November 24, 2004, the Bankruptcy
Court issued its memorandum opinion in which it granted dismissal of count V only.
(Id.) On December 13, 2004, Defendants filed their Answer, in which they demanded a
jury trial of all issues so triable. (Id.) On January 5, 2005, the present Motion (D.l. 1.)
was filed.
Plaintiff's sole argument in opposition to the Motion is the timeliness of the filing
of the motion. (D.|. 3 at 3.) Plaintiff argues that Defendants failed to file at the "first
reasonable opportunity" which arose on or about June 25, 2003, when the initial
complaint was served. (Id.) Alternatively, Plaintiff argues that the court should limit the
withdrawal of the reference to the trial portion only, leaving pre—triaI and discovery
matters under the administration ofthe bankruptcyjudge. (ld. at 5.)
In determining whether to grant or deny a motion to withdraw the reference, "this
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Court will consider whether withdrawal would serve judicial economy, such as the l
goals of promoting uniformity in bankruptcy administration, reducing forum shopping
and confusion, fostering the economical use of the debtors' and creditors' resources, i
and expediting the bankruptcy process? NDEP Corp. V. Hand!-lt, inc. (ln re NDEP
Corp.), 203 B.R. 905, 913 (D. Del. 1996). The statute permits withdrawal of the I
reference "on timely motion of a party." 28 U.S.C. § 157(d). "[T]imeliness of the motion i
for withdrawal of the reference is not defined in the statute and can bejudged only in a i
relative sense." Lowin v. Dayton Securities Associates (ln re the Securities Group
1980), 89 B.R. 196, 197 (IVl.D. Fla. 1988). Therefore, timeliness "must be measured by
the stage of the proceedings in the Bankruptcy Court." ld. A court is more likely to find
the motion untimely as the proceeding becomes "more developed, complicated and
invoIved." United States v. Kaplan, 146 B.R. 500, 504 (D. l\/lass. 1992). However, this
case is still at a procedurally early stage; no discovery has taken place and no initial
trial conference has occurred or is currently scheduled. While Defendants had notice of
the ground for the motion as early as June 2003, "it would have been lmprudent to file
until the Bankruptcy Court denied Defendants' motion to dismiss. See In re Sevko,
Inc., 143 B.R. 114, 116 (N.D. Ill. 1992). Thus, given the lack ofa specific time limit and
the early stage of the proceedings, the motion was filed timely. See Lars, Inc. v. Taber
Partners (ln re Lars, inc.), 290 BR. 467, 470 (D.PR. 2003).
Although Plaintiff asserts that all pretrial matters in this proceeding should be
remanded to the Bankruptcy Court, Plaintiff provides no explanation in support of these
contentions. (D.I. 3 at 5.) Further, remanding the matter to the Bankruptcy Court, or
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denying the Motion, would not promote uniformity in the bankruptcy administration,
reduce forum shopping, foster the economical use of the parties resources, or expedite
the bankruptcy process. On the contrary, it appears that considerations ofjudicial
economy favor withdrawal. Because it is essentially conceded that Defendants are
entitled to a jury trial, it will likely be more efficient for this court to manage the case
through the pretrial process. Cf NDEP, 203 B.R. at 913 (quoting Gumpod v. Growth
Fin. Corp. (ln re Transcon Lines), 121 B.R. 837, 838 (C.D. Cal. 1990)) ("‘Due to the fact
that a District Court Judge must eventually preside over the jury trial in this matter, it
would constitute a tremendous waste ofjudicial resources to permit the bankruptcy
judge to continue to maintain jurisdiction over the issues presented in this |itigation.").
Accordingly, IT IS HEREBY ORDERED that Defendants’ Motion to withdraw
reference (D.l. 1) is GRANTED and the reference of the above Adversary Proceeding
Number 03-52514 is WITHDRAWN. IT IS FURTHER ORDERED that Defendants
need not file a motion to determine whether matter is core or non-core. Defendants’
request for oral argument is DENIED as moot.
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July 1, 2005 ml . AL.
Wilmington, Delaware ITED · CT JUDGE
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