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

Case 1:05-cv-00377-GMS

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

IN RE:

) ) ) INSILCO TECHNOLOGIES, INC., et al., ) Debtors, ) _______________________________________________ ) ) CHAD SHANDLER, AS TRUSTEE OF THE INSILCO ) LIQUIDATING TRUST- UNSECURED ) CREDITOR SERIES, ) ) ) Plaintiff, ) ) v. ) ) A. J. OSTER CO. ) ) Defendant. ) ________________________________________________)

Chapter 11 Bk. No. 02-13672 (KJC) (Jointly Administered)

Adv. Proc. No. 04-57692 (PBL)

Hearing Date: Only if Scheduled by the Court Objection Deadline: May 27, 2005

MOTION OF DEFENDANT A. J. OSTER CO. TO WITHDRAW REFERENCE TO BANKRUPTCY COURT Comes Now, A.J. Oster Co., ("Defendant") pursuant to Local Rule 5011-1 with this Motion to Withdraw Reference to Bankruptcy Court and states as follows: PROCEDURAL BACKGROUND 1. On December 13, 2004, Plaintiff instituted this proceeding by filing a Complaint

through which it seeks to avoid and recover pursuant to 11 U.S.C Sections 547, 548 and 550 certain transfers allegedly made to Defendant. 2. Defendant filed a timely Answer and Affirmative Defenses containing a demand

for a jury trial. Defendant does not consent to the conduct of a jury trial by the Bankruptcy Court.

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3. 4.

Defendant has not filed a claim against any of the Debtors' estates. Defendant is filing a contemporaneous Motion for Determination of Core Status, as

required by Local Rule 5011-1. RELIEF REQUESTED 5. Plaintiff seeks the withdrawal of the reference to the Bankruptcy Court in order

that the District Court may conduct the trial of this matter. GROUNDS FOR THE RELIEF REQUESTED A. Defendant has a Well-Established Right to a Jury Trial In a Preference Action

6.

The U.S. Supreme Court has determined that a defendant in a bankruptcy

preference action "that did not have or file claims against the debtors' estates undoubtedly [were] entitled to a jury trial on the issue whether the payments they received from the debtors within ninety days of the latter's bankruptcy constitute[d] avoidable preferences." Langenkamp v. Culp, 498 U.S. 42, 45 (1990), rehearing denied, 498 U.S. 1043 (1990), quoting In re Republic Trust & Savings Co., 897 F.2d 1041, 1046 (1990) (bracketing in original). 7. Similarly, the Third Circuit Court of Appeals has held that the jury trial right

exists, unless waived by the filing of a proof of claim. See Billing v. Ravin, Greenberg & Zackin, P.A., 22 F.3d 1242 (3d. Cir.), cert. denied 513 U.S. 999 (1994); Travellers International AG v. Robinson, 982 F.2d 96, 98 (3d. Cir. 1992), cert. denied 507 U.S. 1051 (1993). If a defendant against whom the preference action is brought has not filed a proof of claim, the preference action "amounts only to a legal action to recover a monetary transfer." In re Heater, 261 B.R. 145, 148 (Bankr.W.D.Pa. 2001), quoting Langenkamp, 498 U.S. at 44. 8. Because Defendant has not filed a claim against the estates, it is entitled to a jury

trial in this avoidance action.

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B. Withdrawal of the Reference is Appropriate 10. Pursuant to 28 U.S.C. § 157(d), "[t]he 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." 11. A recent decision of the United States District Court for the District of Delaware

is directly on point in finding that when a defendant in a preference adversary proceeding properly requests a jury trial, the reference to the Bankruptcy Court should be withdrawn. Hutchins v. APCC Services, Inc. (In re: Star Creditors' Liquidating Trust ), 2004 U.S. Dist. LEXIS 3279 (March 3, 2004). The District Court cited Granfinanciera, S.A. v. Nordberg, supra, as being dispositive on the right to a jury trial, and also held that "considerations of judicial economy favor withdrawal. Because it is essentially conceded that Defendants are entitled to a jury trial, it appears more efficient for this court to manage the case through the pretrial process." 2004 U.S. Dist. LEXIS 3279, at p. 5. 12. The rationale of Hutchins is applicable here, given the clear right to a jury trial

and the Defendant's lack of consent to the Bankruptcy Court's conduct of such a trial. Wherefore, based upon the foregoing, Defendant requests that the reference to the Bankruptcy Court be withdrawn.

May 13, 2005 Werb & Sullivan /s/ Robert Wilcox Duane D. Werb (DE No. 1042) Robert D. Wilcox (DE No. 4321) 300 Delaware Avenue, 13th Floor P.O. Box 25046 Wilmington, Delaware 19899 Telephone: (302) 652-1100 Facsimile: (302) 652-1111

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E-mail: [email protected] rwilcox@ werbsullivan.com And Husch & Eppenberger, LLP Mark T. Benedict, Esquire Robert D. Maher, Esquire 1200 Market Street, Suite 1700 Kansas City, MO 64105 Telephone: (816) 421-4800 Facsimile: (816) 421-0596 Attorneys for Defendant A. J. Oster Co.

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