Name of Assigned Judge or Magistrate Judge Amy J. St. Eve Sitting Judge if Other than Assigned Judge
Defendant's motion to withdraw reference  is denied and Plaintiff's motion to remand  is granted. The Clerk of Court is directed to remand the case to the United States Bankruptcy Court for the Northern District of Illinois.
O[ For further details see text below.] Docketing to mail notices.
Defendant/Counter-Plaintiff United States of America ("United States") moves the Court to withdraw the reference of this adversary proceeding from the United States Bankruptcy Court for the Northern District of Illinois pursuant to 28 U.S.C. § 157(d), Rule 5011 of the Federal Rules of Bankruptcy Procedure, and Northern District of Illinois Internal Operating Procedure 15. In response, Plaintiff Equipment Acquisition Resources ("EAR") opposes withdrawal and requests the Court to remand the case the bankruptcy court. For the following reasons, the Court denies the United States' motion and grants EAR's motion.
On October 23, 2009, EAR filed a voluntary petition for Chapter 11 bankruptcy in the Bankruptcy Court for the Northern District of Illinois, Case No. 09-39937, In re Equipment Acquisition Resources. Because EAR is a debtor in possession, it must commence and prosecute claims and causes of action for the benefit of its bankruptcy estate and creditors. On January 20, 2010, EAR, as debtor-in possession, filed this adversary proceeding against the United States. In its complaint EAR alleges, inter alia, that: (1) the United States is the recipient of fraudulently transferred corporate funds used to pay the income tax liabilities of EAR's shareholders, and (2) EAR's bankruptcy estate is entitled to avoid and recover those transfers from the United States. In its answer, the United States denied liability on various grounds and it also filed a third-party complaint seeking restitution from the shareholders of EAR and their spouses: Mark W. Anstett, Martha J. Anstett, Sheldon G. Player, and Donna L. Malone.
Even though 28 U.S.C. § 1334 vests federal district courts with original jurisdiction over cases arising out of Title 11 of the Bankruptcy Code, bankruptcy cases are automatically referred to bankruptcy judges for the federal district under 28 U.S.C. § 157(a). In re Vicars Ins. Agency, Inc., 96 F.3d 949, 951 (7th Cir. 1996); In re Coe-Truman Tech., Inc., 214 B.R. 183, 184-85 (N.D. Ill. 1997). Under the Bankruptcy Code, Congress intended for bankruptcy judges to determine complex Title 11 issues to the "greatest extent possible." In re Alpern, 191 B.R. 107, 110 (N.D. Ill. 1995) (citation omitted). See also Xonics v. First Wisconsin Fin. Corp., 813 F.2d 127, 131 (7th Cir. 1987) ("bankruptcy jurisdiction is designed to provide a single forum for dealing with all claims to the bankrupt's assets"). District judges, however, may withdraw certain matters that were automatically referred to the bankruptcy court and render the decisions themselves. In re Dorner, 343 F.3d 910, 914 (7th Cir. 2003).
The standard for withdrawal of the reference from a bankruptcy court is outlined in 28 U.S.C. § 157(d):
The district court may withdraw, in whole or in part, any case or proceeding referred [to the bankruptcy court], on its own motion or on timely motion of any party, for cause shown. The district court shall, on timely motion of a party, so withdraw a proceeding if the court determines that resolution of the proceeding requires consideration of both Title 11 and other laws of the United States regulating organizations or activities affecting interstate commerce.
Courts have interpreted the first sentence of Section 157(d) as allowing permissive withdrawal "for cause shown" and the second sentence as requiring mandatory withdrawal under certain circumstances. In re Vicars Ins. Agency, Inc., 96 F.3d at 952. The Court has broad discretion in determining whether to grant or deny a motion to withdraw the reference based on cause. In re Sevko, Inc., 143 B.R. 114, 115 (N.D. Ill. 1992); see also In re Enron Corp., 295 B.R. 21, 25 (S.D.N.Y. 2003).
The Court considers the following factors when determining whether the United States has met its burden in establishing that cause for withdrawal exists: (i) whether the proceeding is core or non-core, (ii) considerations of judicial economy and convenience, (iii) promoting the uniformity and efficiency of bankruptcy administration, (iv) forum shopping and confusion, (v) conservation of debtor and creditor resources, and (vi) whether the parties requested a jury trial. Maxwell v. Kemp (In re Beale), 410 B.R. 613, 616 (N.D. Ill. 2009) (citing Grochocinski v. LaSalle Bank Nat'l Assoc. (In re: K & R Express Sys.), 382 B.R. 443, 446 (N.D. Ill. 2007) (citation omitted)); In re Coe-Truman Technologies, Inc., 214 B.R. at 185, 187; Edgewater Med. Ctr. v. Edgewater Prop. Co. (In re Edgewater Med. Ctr.), 2004 WL 2921957, 2004 U.S. Dist. LEXIS 25346, *1-*5 (N.D. Ill. Dec. 14, 2004). "While the court evaluates each of the cited factors, it is axiomatic that the most important factor is whether the claim is core or non-core because it is on this issue ...