Zerand-Bernal Grp., Inc. v. Ronald L. Cox, 23 F.3d 159 (7th Cir. 1994). · Go Syfert
Zerand-Bernal Grp., Inc. v. Ronald L. Cox, 23 F.3d 159 (7th Cir. 1994). Cases Citing This Book View Copy Cite
G Cite
cited 2× by 2 distinct cases, 2017–2023 · 2 courts · …a court cannot write its own jurisdictional ticket. at p. 164
354 citation events (192 in the last 25 years) across 71 distinct courts.
Negative lean: 1st  ·  Positive lean: 4th, 2nd, 10th, 5th, 7th
Strongest positive: Dupree Farms, LLC v. Producers Agriculture Insurance Company (nceb, 2024-06-06) · Strongest negative: Western Supply v. Savage Arms, Inc. (ca1, 1994-12-14)
Treatment trajectory · 1994 → 2026 · click a year to view as-of
1994 2010 2026
Top citers, strongest first. 50 distinct citers. How cited ↗
examined Cited "but see" Western Supply v. Savage Arms, Inc. (4×) also: Cited as authority (rule), Cited "see, e.g."
1st Cir. · 1994 · signal: but cf. · confidence high
Thus, even assuming that the Western Auto successor liability claim constituted an "interest" in the Debtor 13 Industries chapter 11 assets transferred to Arms and that it would be extinguishable under section 363(f) "after notice and a hearing," Bankruptcy Code 102(1), 11 U.S.C. 102(1); but cf. Zerand-Bernal Group v. Cox, 23 F.3d 159 , 164 (7th Cir. 1994) (Posner, C.J.) (suggesting that 363(f) cannot be employed to extinguish successor product-line liability claims), there can be no question that its claim could not be extinguished absent a showing that Western Auto was afforded appropriate n…
examined Cited "but see" Western Supply v. Savage Arms, Inc. (3×) also: Cited as authority (rule), Cited "see, e.g."
1st Cir. · 1994 · signal: but cf. · confidence high
See, e.g., Dalton Dev. ___ ____ ___________ Project v. Unsecured Creditors Comm. (In re Unioil), 948 F.2d _______ __________________________ _____________ 678, 683 (10th Cir. 1991) (Bankruptcy Code) (chapter 11 claim whose holder was afforded no notice is not subject to discharge); 2 Lawrence P. King, Collier on Bankruptcy, 363.13, at 363-43 ______________________ (15th ed. 1992) (noting that the Code concern for finality in ________ bankruptcy sales "will not, however, protect a party buying from the trustee in a sale free and clear of liens where no notice is given to the lienholder [and] [s…
examined Cited "but see" In Re Savage Industries, Inc., Debtor. Western Auto Supply Company v. Savage Arms, Inc. (4×) also: Cited as authority (rule), Cited "see, e.g."
1st Cir. · 1994 · signal: but cf. · confidence high
Thus, even assuming that the Western Auto successor liability claim constituted an “interest” in the Debtor Industries chapter 11 assets transferred to Arms and that it would be extinguishable under section 363(f) “after notice and a hearing,” Bankruptcy Code § 102(1), 11 U.S.C. § 102 (1); but cf. Zerand-Bernal Group v. Cox, 23 F.3d 159 , is (7th Cir.1994) (Posner, C.J.) (suggesting that § 363(f) cannot be employed to extinguish successor product-line liability claims), there can be no question that its claim could not be extinguished absent a showing that Western Auto was afforded …
discussed Cited as authority (verbatim quote) Dupree Farms, LLC v. Producers Agriculture Insurance Company
Bankr. E.D.N.C. · 2024 · signal: see · quote attribution · 1 verbatim quote · confidence high
debtor cannot 'write its own jurisdictional ticket
discussed Cited as authority (verbatim quote) Glaser, Gerald v. Superior Silica Sands, LLC (2×) also: Cited as authority (rule)
W.D. Wis. · 2023 · quote attribution · 1 verbatim quote · confidence high
a court cannot write its own jurisdictional ticket.
discussed Cited as authority (verbatim quote) Wayne Coleman v. Pristine Clean Energy, LLC
Ky. Ct. App. · 2021 · quote attribution · 1 verbatim quote · confidence high
rders approving bankruptcy sale . . . plan of reorganization . . . -6- confer jurisdiction.
discussed Cited as authority (verbatim quote) Nu-Cast Step & Supply, Inc.
Bankr. E.D. Mich. · 2021 · signal: see · quote attribution · 1 verbatim quote · confidence high
rders approving bankruptcy sale ...plan of reorganization ... confer jurisdiction. a court cannot write its own jurisdictional ticket
discussed Cited as authority (verbatim quote) Quincy Medical Center v. Gupta
1st Cir. · 2017 · quote attribution · 1 verbatim quote · confidence high
rders approving bankruptcy sale ... plan of reorganization ... confer jurisdiction. a court cannot write its own jurisdictional ticket.
discussed Cited as authority (verbatim quote) Chicago Truck Drivers, Helpers & Warehouse Workers Union (Independent) Pension Fund v. Tasemkin, Inc.
N.D. Ill. · 1994 · signal: see also · quote attribution · 1 verbatim quote · confidence high
not content to defend in the pennsylvania district court, zerand filed an adversary complaint in the bankruptcy court in chicago_
examined Cited as authority (verbatim quote) mandamus is the proper remedy State ex rel. Lloyd v. Clayton (4×) also: Cited as authority (rule)
unknown court · 144 · quote attribution · 1 verbatim quote · confidence high
any parties who are not parties to the settlement will be protected. the settlement will not prejudice their abilities to defend themselves if there is any action sought against them.
discussed Cited as authority (quoted) In re Kimball Hill, Inc.
Bankr. N.D. Ill. · 2017 · quote attribution · 1 verbatim quote · confidence low
a court cannot write its own jurisdictional ticket.
examined Cited as authority (quoted) In re Olsen (3×) also: Cited "see"
Bankr. E.D. Wis. · 2016 · signal: see · quote attribution · 2 verbatim quotes · confidence high
ancillary jurisdiction is applied only in unusual circumstances and is strictly limited to cases where the non-bankruptcy forum cannot provide adequate relief or where other equitable factors require the bankruptcy court to exercise ancillary jurisdiction.
discussed Cited as authority (rule) Candie Yer Herr and Eric Zooves Herr v. Judge Rachel M. Blise and Helen Ludwig
E.D. Wis. · 2025 · confidence medium
Bankruptcy courts have the jurisdiction “to adjudicate proceedings ‘arising in,’ ‘arising under,’ or ‘related to’ a case under title 11 [of the United States Code].” Matter of FedPak Sys., Inc., 80 F.3d 207, 213 (7th Cir. 1996) (citing Zerand–Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir. 1994)). “‘A court cannot write its own jurisdictional ticket,’ Zerand–Bernal, 23 F.3d at 164 , but must act within the confines of constitutional as well as statutory limits on its jurisdiction.” Id. at 215 .
discussed Cited as authority (rule) The Babcock & Wilcox Company v. Philadelphia Energy Solutions Refining and Marketi
Bankr. E.D. La. · 2025 · confidence medium
In other words, through the Fifth Circuit’s prepetition-relationship test analysis, the Court is essentially being asked to determine whether the Defendants here “had a chance to obtain a legal remedy against the predecessor.” Zerand-Bernal, 23 F.3d at 163.
discussed Cited as authority (rule) BRH-Garver Construction, LLC v. BankFinancial, N.A.
N.D. Ill. · 2023 · confidence medium
Proceedings that can be said to “arise under” title 11 or “arise in” a case under title 11, “arise during the bankruptcy proceeding and concern the administration of the bankrupt estate, such as whether to discharge a debtor.” Zerand–Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir. 1994).
cited Cited as authority (rule) Johnson v. People's Bank
S.D.W. Va · 2023 · confidence medium
The order retaining jurisdiction was, therefore, insufficient to confer jurisdiction, as “[a] court cannot write its own jurisdictional ticket.” Id. (quoting Zerand-Bernal, 23 F.3d at 164).
discussed Cited as authority (rule) United States v. MIKHOV
S.D. Ind. · 2022 · confidence medium
Thus, "[i]ts domain is limited to questions that arise during the bankruptcy proceeding and concern the administration of the bankrupt estate, such as whether to discharge a debtor." Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir. 1994).
discussed Cited as authority (rule) Aearo Technologies LLC v. Parties Listed on Appendix A to the Complaint et a (2×)
Bankr. S.D. Ind. · 2022 · confidence medium
While the Seventh Circuit did not expressly reject that statement in reversing the bankruptcy court on appeal, the Court emphasized (literally) that the instructs, “related to” jurisdiction is “primarily intended to encompass tort, contract, and other legal claims by and against the debtor, claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others but that § 1334(b) allows to be forced into bankruptcy court so that all claims by and against the debtor can be determined in the same forum.” Zerand–Bernal, 23 F.3d at 161 (citation omi…
examined Cited as authority (rule) Norrenberns Foods, Inc. (4×)
Bankr. S.D. Ill. · 2022 · confidence medium
Zerand, 23 F.3d at 161.
discussed Cited as authority (rule) DirectBuy, Inc. v. Buy Direct, LLC (2×) also: Cited "see"
N.D. Ind. · 2022 · confidence medium
Tasemkin, 59 F.3d at 50-51 (“it is neither certain nor clear that the chilling effect need give us pause: purchasers can demand a lower price to account for pending liabilities of which they are aware, and under federal successorship principles will not be held responsible for liabilities of which they had no notice”); id. at 51 (rejecting the argument that successor liability would frustrate the scheme of the Bankruptcy Code by giving unsecured creditors priority over secured creditors, stating among other things that, a successor liability claim “will have no effect on the bankruptcy p…
cited Cited as authority (rule) Jones v. Lexington Medical Center
Bankr. D.S.C. · 2020 · confidence medium
In the Matter of FedPak Sys., Inc., 80 F.3d 207, 213 (7th Cir. 1996) (citing Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir. 1994)).
discussed Cited as authority (rule) Marquez v. Schlicht, D.O.
Bankr. D.N.M. · 2020 · confidence medium
Non-core, related proceedings primarily “encompass tort, contract, and other legal claims by and against the debtor, claims that, were it not for the bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others[.]” In re Zale Corp., 62 F.3d 746, 752 (5th Cir. 1995) (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir. 1994)).
cited Cited as authority (rule) Endurance American Specialty Insurance Company v. Victory Park Capital Advisors, LLC
N.D. Ill. · 2019 · confidence medium
And second, it can “force into the bankruptcy court suits to which the debtor need not be a party but which may affect the amount of property in the bankrupt estate.” Zerand, 23 F.3d at 161-62.
discussed Cited as authority (rule) Scott v. American Security Insurance Co. (In re Scott)
Bankr. S.D.N.Y. · 2017 · confidence medium
Its domain is limited to questions that arise during the bankruptcy proceeding and concern administration of the bankruptcy estate, such as whether to discharge a debtor.” Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir. 1994) (citations omitted).
discussed Cited as authority (rule) Firefighters' Retirement System v. Consulting Group Services, LLC (2×)
M.D. La. · 2015 · confidence medium
Nevertheless, “related to” jurisdiction is not limitless. “[A]s a dispute becomes progressively more remote from the concerns of the body of federal law claimed to confer jurisdiction over it, the federal interest in furnishing the rule of decision for the dispute becomes progressively weaker.” Id.; Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir.1994).
discussed Cited as authority (rule) Mason v. Costello (In re Klarchek)
Bankr. N.D. Ill. · 2014 · confidence medium
The jurisdiction of the bankruptcy court to stay actions in other courts extends beyond claims by and against the debtor, to include “suits to which the debtor need not be a party but which may affect the amount of property in the bankrupt estate,” Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir. 1994), or "the allocation of property among creditors.” In re Memorial Estates, Inc., 950 F.2d 1364, 1368 (7th Cir.1992); see also Lawrence P. King, Collier on Bankruptcy ¶ 105[2]; In re Heath, 115 F.3d 521, 524 (7th Cir.1997) ("related to” means "likely to affect”).
discussed Cited as authority (rule) Barbatano v. Glickman (In re Corus Bankshares, Inc.)
Bankr. N.D. Ill. · 2013 · confidence medium
Jurisdiction lies under 28 U.S.C. § 1334 (b), which provides that “the district courts shall have original ... jurisdiction of all civil proceedings ... arising in or related to cases under [the Bankruptcy Code].” See Celotex Corp. v. Edwards, 514 U.S. 300, 307-08 , 115 S.Ct. 1493 , 131 L.Ed.2d 403 (1995); Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994) (“The reference to cases related to bankruptcy cases is primarily intended to encompass tort, contract, and other legal claims by and against the debt- or, claims that, were it not for bankruptcy, would be ordinary stan…
discussed Cited as authority (rule) Souther v. Bacon County Health Services Inc. (In re Matrix Imaging Services Inc.)
Bankr. S.D. Ga. · 2012 · confidence medium
“Related to” jurisdiction is “primarily intended to encompass tort, contract, and other legal claims by and against the debtor, claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others.” In re Zale Corp., 62 F.3d 746, 752 (5th Cir.1995) (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994)).
cited Cited as authority (rule) Church Joint Venture v. Blasingame (In re Blasingame)
unknown court · 2012 · confidence medium
Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994) (internal citations omitted).
cited Cited as authority (rule) Morgan Olson L.L.C. v. Frederico (In Re Grumman Olson Industries, Inc.)
S.D.N.Y. · 2012 · confidence medium
Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 163 (7th Cir.1994) (Posner, J.).
discussed Cited as authority (rule) Robbins v. Physicians for Women's Health, LLC (2×)
Conn. App. Ct. · 2012 · confidence medium
See Foster v. Cone-Blanchard Machine Co., supra, 460 Mich. at 705-706 , 597 N.W.2d 506 ; Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 163 (7th Cir.1994) (suggesting that claims based on successor liability not viable where plaintiff "had a chance to obtain a legal remedy against the predecessor, even so limited a remedy as that afforded by the filing of a claim in bankruptcy").
discussed Cited as authority (rule) Boliaux v. Automotive Finance Corp.
N.D. Ill. · 2011 · confidence medium
Virginia Cmty. College v. Katz, 546 U.S. 356, 364 , 126 S.Ct. 990 , 163 L.Ed.2d 945 (2006) (“critical features of every bankruptcy proceeding are the exercise of exclusive jurisdiction over all of the debtor’s property, the equitable distribution of that property among the debtor’s creditors, and the ultimate discharge that gives the debt- or a ‘fresh start’ by releasing him, or her, or it from further liability for old debts”); Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994) (noting that a bankruptcy court’s jurisdiction arises under § 157 and § 1334). 2.
discussed Cited as authority (rule) Samson Resources Co. v. Valero Marketing & Supply Co.
D.N.M. · 2011 · confidence medium
The statutory reference of “related to” or “non-core” proceedings “is primarily intended to encompass tort, contract, and other legal claims by and against a debtor.” Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994)(Posner, J.).
discussed Cited as authority (rule) Harris N.A. v. Gander Partners LLC
N.D. Ill. · 2011 · confidence medium
In Fisher , the Court ruled that “[i]n limited circumstances, the trustee may temporarily block adjudication of claims that are not property of the estate by petitioning the bankruptcy court to enjoin the other litigation, if it is sufficiently ‘related to’ her own work on behalf of the estate” and if such litigation “ ‘may affect the amount of property in the bankrupt estate....’” Id. at 882 (quoting in part Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994)).
discussed Cited as authority (rule) BUKE, LLC v. Eastburg (In Re Eastburg)
Bankr. D.N.M. · 2010 · confidence medium
Section 451 of Title 28 states in relevant part: As used in this title: The term "court of the United States” includes the Supreme Court of the United States, courts of appeals, district courts constituted by chapter 5 of this title, including the Court of International Trade and any court created by Act of Congress the judges of which are entitled to hold office during good behavior. 28 U.S.C. § 451 . 5 .See Fisher v. Apostolou, 155 F.3d 876, 882 (7th Cir.1998) (stating that “[t]he jurisdiction of the bankruptcy court to stay actions in other courts extends beyond claims by and against t…
discussed Cited as authority (rule) Gander Partners LLC v. Harris Bank, N.A. (In Re Gander Partners LLC)
Bankr. N.D. Ill. · 2010 · confidence medium
The jurisdiction of the bankruptcy court to stay actions in other courts extends beyond claims by and against the debtor, to include “suits to which the debtor need not be a party but which may affect the amount of property in the bankrupt estate,” Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994), or “the allocation of property among creditors”.
cited Cited as authority (rule) Leibowitz v. First Chicago Bank & Trust (In Re IFC Credit Corp.)
Bankr. N.D. Ill. · 2010 · confidence medium
Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994) (quoting Xonics 813 F.2d at 131 ).
cited Cited as authority (rule) Campbell v. Motors Liquidation Co.
S.D.N.Y. · 2010 · confidence medium
See Appellants Br. 17-18 (citing In re Chateaugay Corp., 213 B.R. at 639 ; Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (3d Cir.1984); Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir.1994)).
discussed Cited as authority (rule) Teknek, LLC v. Systems Division Inc
7th Cir. · 2009 · confidence medium
“The jurisdiction of the bankruptcy court to stay actions in other courts extends beyond claims by and against the debtor, to include ‘suits to which the debtor need not be a party but which may affect the amount of property in the bankrupt estate,’ or ‘the allocation of property among creditors.’ ” 155 F.3d at 882 (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994), and In re Mem’l Estates, Inc., 950 F.2d 1364, 1368 (7th Cir.1992)).
discussed Cited as authority (rule) Levey v. Systems Division, Inc. (In Re Tekner, LLC)
7th Cir. · 2009 · confidence medium
“The jurisdiction of the bankruptcy court to stay actions in other courts extends beyond claims by and against the debtor, to include ‘suits to which the debtor need not be a party but which may affect the amount of property in the bankrupt estate,’ or ‘the allocation of property among creditors.’ ” 155 F.3d at 882 (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994), and In re Mem’l Estates, Inc., 950 F.2d 1364, 1368 (7th Cir.1992)).
discussed Cited as authority (rule) In Re Commercial Mortg. and Finance, Co.
Bankr. N.D. Ill. · 2009 · confidence medium
In re Cary Metal Products, Inc., 152 B.R. 927, 930 (Bankr.N.D.Ill.1993), aff'd, Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994) (citing In re Spaulding & Co., 131 B.R. 84 (N.D.Ill.1990)). [In re Kmart Corp., supra, 359 B.R. at 194 .] Bankruptcy courts are also courts of equity that balance the interests of the affected parties — debtors and creditors — -by how the equities relate to the success of the reorganization, but the Bankruptcy Code does not authorize free-wheeling consideration of every conceivable equity.
discussed Cited as authority (rule) American Chemical Service Site RD/RA Agreement Members v. Admiral Ins.
S.D. Ind. · 2008 · confidence medium
The Seventh Circuit has explained that “related to” jurisdiction is “intended to encompass tort, contract, and other legal claims by and against the debtor ... [and] suits to which the debtor need not be a party but which may affect the amount of property in the bankruptcy estate.” Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 162 (7th Cir.1994).
discussed Cited as authority (rule) Leibowitz v. Barnes Auto Group, Inc. (In Re Black)
Bankr. N.D. Ill. · 2008 · confidence medium
The Seventh Circuit has stated that a bankruptcy court’s “related to jurisdiction” encompasses “ ‘tort, contract, and other legal claims by and against the debt- or, claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others. ...’” In re FedPak Sys., Inc., 80 F.3d 207, 214 (7th Cir.1996) (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994)).
cited Cited as authority (rule) Estate of Valich v. Trutko-Clayton (In Re Trutko-Clayton)
Bankr. N.D. Ind. · 2007 · confidence medium
Zerand-Bemal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir.1994).
cited Cited as authority (rule) Altman v. Davis & Dingle Family Dentistry (In Re EZ Pay Services, Inc.)
Bankr. M.D. Fla. · 2007 · confidence medium
Id. at 882-83 (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994) and In re Memorial Estates, Inc., 950 F.2d 1364, 1368 (7th Cir.1991)).
cited Cited as authority (rule) In Re Arter & Hadden, LLP
Bankr. N.D. Ohio · 2007 · confidence medium
An “overbroad construction of § 1334(b) may bring into federal court matters that should be left for state courts to decide.” Zerand-Bemal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994).
discussed Cited as authority (rule) Valley Historic Limited Partnership v. The Bank of New York
4th Cir. · 2007 · confidence medium
See New Horizon of N.Y., L.L.C. v. Jacobs, 231 F.3d 143 , 155 (4th Cir.2000) (“The plan cannot confer jurisdiction upon a bankruptcy court or a federal district court ..., rather 28 U.S.C. § 1334 governs jurisdiction.”) (citations omitted); Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 164 (7th Cir.1994) (concluding that the bankruptcy court lacked jurisdiction post-confirmation to adjudicate an adversary proceeding concerning a bankruptcy sale, notwithstanding inclusion of language purporting to retain jurisdiction in the order confirming the sale and in the plan of reorganization).
discussed Cited as authority (rule) Valley Historic Ltd v. Bank of New York
4th Cir. · 2007 · confidence medium
See New Horizon of N.Y., L.L.C. v. Jacobs, 231 F.3d 143 , 155 (4th Cir. 2000) ("The plan cannot confer jurisdiction upon a bank- ruptcy court or a federal district court . . ., rather 28 U.S.C. § 1334 governs jurisdiction.") (citations omitted); Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 164 (7th Cir. 1994) (concluding that the bank- ruptcy court lacked jurisdiction post-confirmation to adjudicate an adversary proceeding concerning a bankruptcy sale, notwithstanding inclusion of language purporting to retain jurisdiction in the order 8 VALLEY HISTORIC v. BANK OF NEW YORK confirming the sa…
discussed Cited as authority (rule) Bankruptcy Estate of KDC, Inc. Ex Rel. McNeilly v. Kraklow
W.D. Wis. · 2007 · confidence medium
Fisher v. Apostolou, 155 F.3d 876, 882 (7th Cir.1998) (claims that affect amount of property in estate or allocation of property among creditors “relate to” bankruptcy proceeding) (citing Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161-62 (7th Cir.1994), In re Memorial Estates, Inc., 950 F.2d 1364, 1368 (7th Cir.1991); In re Heath, 115 F.3d 521, 524 (7th Cir.1997)).
discussed Cited as authority (rule) Vozella v. Basel-Johnson (In Re Basel-Johnson)
Bankr. N.D. Ill. · 2007 · confidence medium
The Seventh Circuit has stated that a bankruptcy court’s “related to jurisdiction” encompasses “ ‘tort, contract, and other legal claims by and against the debtor, claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others ....’” In re FedPak Sys., Inc., 80 F.3d 207, 214 (7th Cir.1996) (quoting Zerand-Bernal Group, Inc. v. Cox, 23 F.3d 159, 161 (7th Cir. 1994)).
Retrieving the full opinion text from the archive…
Zerand-Bernal Group, Inc., Formerly Known as Zerand Corporation
v.
Ronald L. Cox, Beth Anne Cox, Rockwell International Corp., and Rockwell Graphic Systems, Inc.
93-3295.
Court of Appeals for the Seventh Circuit.
Apr 22, 1994.
23 F.3d 159

23 F.3d 159

62 USLW 2679, 25 Bankr.Ct.Dec. 965, Bankr.
L. Rep. P 75,862

ZERAND-BERNAL GROUP, INC., formerly known as Zerand
Corporation, Plaintiff-Appellant,
v.
Ronald L. COX, Beth Anne Cox, Rockwell International Corp.,
and Rockwell Graphic Systems, Inc., Defendants-Appellees.

No. 93-3295.

United States Court of Appeals,
Seventh Circuit.

Argued Feb. 14, 1994.
Decided April 22, 1994.

Michael R. Levinson, Gus A. Paloian, Patrice A. Powers, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, Russell J. Ober, Jr. (argued), Patricia L. Dodge, Meyer, Unkovic & Scott, Pittsburgh, PA, for Zerand-Bernal Group, Inc.

Francis J. Carey, Balzarini, Carey & Watson, Pittsburgh, PA, for Ronald L. Cox, Beth Ann Cox.

David S. Curry, N. Neville Reid (argued), Mayer, Brown & Platt, Chicago, IL, Kenneth L. Salmon, Patrick M. Coyne, Katarincic & Salmon, Pittsburgh, PA, for Rockwell Intern. Corp., Rockwell Graphic Systems, Inc.

Jerome Wald, Tishler & Wald, Ltd., Chicago, IL, for Cary Metal Products, Inc.

Before POSNER, Chief Judge, CUDAHY, Circuit Judge, and McDADE, District Judge.[*]

POSNER, Chief Judge.

[*~159]1

This appeal requires us to consider the power of a bankruptcy court to enjoin proceedings in other courts after the completion of the bankruptcy proceeding. In 1985 Cary Metal Products, Inc. filed a Chapter 11 bankruptcy proceeding in the bankruptcy court in Chicago. As debtor in possession, Cary then negotiated the sale of its assets to Zerand-Bernal Group, Inc., as it is now known. The sale agreement recites that it is subject to the entry by the bankruptcy court of an order approving the sale "free and clear of any liens, claims or encumbrances of any sort or nature," "confirming all of the terms and conditions of this Agreement," and "reserv[ing in the bankruptcy court] jurisdiction with the power to enjoin ... any products liabilities claims arising prior to the Closing or relating to sales made by Debtor prior to the Closing." On December 23, 1985, the bankruptcy court entered an order approving the sale and "reserv[ing] jurisdiction to enforce the Agreement herein approved in accordance with its terms and conditions." Several months later, the debtor (Cary), jointly with a creditors' committee that included Rockwell Graphic Systems, Inc., filed a plan of reorganization. The plan provided for the complete liquidation of Cary and the creation of a trust fund from the proceeds of the sale of Cary's assets to Zerand, specified how the fund was to be allocated among the creditors, and stated that "the Court shall retain exclusive jurisdiction after confirmation ... to enforce the agreement concerning the sale of assets to Zerand." The bankruptcy court approved the plan on January 22, 1987. The transfer of assets pursuant to the sale agreement was completed shortly afterward and the Cary bankruptcy proceeding then became inactive, although it has never been formally dismissed.

[*~161]2

Four and a half years later, Ronald Cox and his wife filed a diversity products liability suit against Cary, Zerand, Rockwell Graphic, and others in a federal district court in Pennsylvania. The suit alleges that in 1989 Mr. Cox had caught his hand in a machine that had been manufactured by Cary and sold by it to Cox's employer. Though Zerand had had nothing to do with the manufacture or sale of the machine--events that had taken place before the bankruptcy sale--the accident had occurred in Pennsylvania and Cox claimed that under the law of that state governing successor liability Zerand was liable for any defect in the Cary machine. Simmers v. American Cyanamid Corp., 394 Pa.Super. 464, 576 A.2d 376, 386 (1990). Not content to defend in the Pennsylvania district court, Zerand filed an adversary complaint in the bankruptcy court in Chicago, seeking to reopen the Cary bankruptcy and asking that the Coxes be enjoined from proceeding against Zerand in Pennsylvania and that Rockwell Graphics be enjoined from filing a cross-claim against Zerand seeking indemnification should Rockwell be held liable to the Coxes for its role (the nature of which is unclear) in the accident. The ground for the relief sought was that the sale agreement between Cary and Zerand had provided for the enjoining of any products liability claims against Zerand that related to equipment sales which had occurred before the sale to it of Cary's assets. The bankruptcy court held that it lacked jurisdiction over the adversary proceeding instituted by Zerand, notwithstanding the reservation of jurisdiction in the orders approving the sale of assets and the plan of reorganization. The district court affirmed the dismissal of the proceeding, 158 B.R. 459.

3

The bankruptcy jurisdiction of the district courts (including therefore that of the bankruptcy courts, which exercise powers delegated to them by the district courts, 28 U.S.C. Sec. 157(a), (b)) extends to "all civil proceedings arising under title 11 [of the U.S.Code], or arising in or related to cases under title 11." 28 U.S.C. Sec. 1334(b). Taken at its full breadth, this language would allow the bankruptcy court to do what Zerand wants, since the adversary complaint that Zerand filed in the bankruptcy court relates to the bankruptcy sale at which it acquired Cary's assets and thereby exposed itself, it turns out, to the Coxes' suit. But the language should not be read so broadly. The reference to cases related to bankruptcy cases is primarily intended to encompass tort, contract, and other legal claims by and against the debtor, claims that, were it not for bankruptcy, would be ordinary stand-alone lawsuits between the debtor and others but that section 1334(b) allows to be forced into bankruptcy court so that all claims by and against the debtor can be determined in the same forum. In re Xonics, 813 F.2d 127, 131 (7th Cir.1987). A secondary purpose is to force into the bankruptcy court suits to which the debtor need not be a party but which may affect the amount of property in the bankrupt estate. Id.; National Tax Credit Partners, L.P. v. Havlik, 20 F.3d 705, 709 (7th Cir.1994); In re Turner, 724 F.2d 338, 341 (2d Cir.1983) (Friendly, J.). Once they are shoehorned into the bankruptcy court on the authority of section 1334(b), such suits can then be stayed by authority of section 105 of the Bankruptcy Code, 11 U.S.C. Sec. 105, which complements the automatic stay provision of section 362 of the Code (applicable to suits against the debtor) by permitting the bankruptcy court to "issue any order ... that is necessary or appropriate to carry out the provisions of this title." In re Energy Co-op, Inc., 886 F.2d 921, 929 (7th Cir.1989); In re G.S.F. Corp., 938 F.2d 1467, 1474 (1st Cir.1991); A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1002-03 (4th Cir.1986).

4

The Coxes' products liability suit is not of either character. It is, to begin with, a claim neither by nor against the debtor. For while it names the debtor as a defendant, the debtor (Cary) no longer exists, all its assets having been transferred to Zerand pursuant to the plan of reorganization. For the same reason, the suit cannot possibly affect the amount of property available for distribution to Cary's creditors; all of Cary's property has already been distributed to them.

5

So the products liability suit, and hence Zerand's adversary complaint, which is its mirror image, are not proceedings "related" to the Cary bankruptcy, within the meaning of section 1334. E.g., In re Turner, supra, 724 F.2d at 341; In re Memorial Estates, Inc., 950 F.2d 1364, 1368 (7th Cir.1991); In re Lemco Gypsum, Inc., 910 F.2d 784, 788 (11th Cir.1990). The next question is whether they can be said to "arise under" the Bankruptcy Code--or "arise in" a bankruptcy proceeding, but that provision of section 1334(b) cannot possibly be applicable to this dispute between two nonparties to the bankruptcy proceeding. Its domain is limited to questions that arise during the bankruptcy proceeding and concern the administration of the bankrupt estate, such as whether to discharge a debtor. In re Wolverine Radio Co., 930 F.2d 1132, 1144 (6th Cir.1991); 1 Collier on Bankruptcy p 3.01(c)(v), at pp. 3-32 to 3-33 (15th ed., Lawrence P. King ed. 1993).

6

The fact that a claim has a distant federal origin does not confer "arising under" jurisdiction. Gully v. First National Bank, 299 U.S. 109, 118, 57 S.Ct. 96, 100, 81 L.Ed. 70 (1936); McCall-Bey v. Franzen, 777 F.2d 1178, 1185-86 (7th Cir.1985). Copyrights are granted under the authority of federal law and all could be said to originate in the Constitution and the copyright statute, but a dispute over the meaning or validity of an agreement to license a copyright is deemed to arise under state rather than federal law. T.B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir.1964) (Friendly, J.). It is the same here. Bankruptcy is a system of entitlements (of both debtors and creditors) created by federal law, but a dispute over the meaning or validity of an agreement between the purchaser at a bankruptcy sale and some third party likewise arises under state rather than federal law. In re Chicago, Rock Island & Pacific R.R., 794 F.2d 1182, 1188 (7th Cir.1986); In re Lemco Gypsum, Inc., supra, 910 F.2d at 789. "Otherwise anyone who could trace his title to a bankrupt could invoke federal jurisdiction to settle disputes affecting that property." In re Xonics, supra, 813 F.2d at 131. And why would that be bad? Because as a dispute becomes progressively more remote from the concerns of the body of federal law claimed to confer federal jurisdiction over it, the federal interest in furnishing the rule of decision for the dispute becomes progressively weaker. Here it is extremely weak. The bankruptcy is over and done with. The main dispute is one between a purchaser at the bankruptcy sale and a person who had nothing to do with the bankruptcy over a point of state law. There is a secondary dispute between that purchaser and a creditor of the bankrupt (Rockwell), but Rockwell's role as a creditor is incidental. The relation of these disputes to the bankruptcy is too tenuous to empower the bankruptcy court, through a capacious interpretation of the "arising under" jurisdiction, to adjudicate a tort suit to which the (former) debtor is not even a party, years after the bankruptcy was wound up. In re Edwards, 962 F.2d 641, 643 (7th Cir.1992); In re Suchy, 786 F.2d 900, 902 (9th Cir.1985).

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We said that the federal interest is tenuous, not that it is nonexistent. Zerand points out that the price received in a bankruptcy sale will be lower if a court is free to disregard a condition in the sale agreement enjoining claims against the purchaser based on the sellers' misconduct. If the condition is invalid the purchaser will be buying a pig in a poke, never knowing when its seller's customers may come out of the woodwork and bring suit against it under some theory of successor liability. This possibility will depress the price of the bankrupt's assets, to the prejudice of creditors. All this is true, but proves too much. It implies, what no one believes, In re American Hardwoods, Inc., 885 F.2d 621, 624 (9th Cir.1989), that by virtue of the arising-under jurisdiction a bankruptcy court enjoys a blanket power to enjoin all future lawsuits against a buyer at a bankruptcy sale in order to maximize the sale price: more, that the court could in effect immunize such buyers from all state and federal laws that might reduce the value of the assets bought from the bankrupt; in effect, that it could discharge the debts of nondebtors (like Zerand) as well as of debtors even if the creditors did not consent; that it could allow the parties to bankruptcy sales to extinguish the rights of third parties, here future tort claimants, without notice to them or (as notice might well be infeasible) any consideration of their interests. If the court could do all these nice things the result would indeed be to make the property of bankrupts more valuable than other property--more valuable to the creditors, of course, but also to the debtor's shareholders and managers to the extent that the strategic position of the debtor in possession in a reorganization enables the debtor's owners and managers to benefit from bankruptcy. But the result would not only be harm to third parties, such as the Coxes, but also a further incentive to enter bankruptcy for reasons that have nothing to do with the purposes of bankruptcy law. Cf. Douglas G. Baird & Thomas H. Jackson, Cases, Problems, and Materials on Bankruptcy 48-55 (2d ed. 1990).

8

It is true that Cary's assets were sold to Zerand free from all liens and other encumbrances. And such a cleansing of the assets in the bankruptcy sale is a valid power of a bankruptcy court, 11 U.S.C. Secs. 363(f), 1141(c). But the Coxes are not attempting to enforce a lien. In re Mooney Aircraft, Inc., 730 F.2d 367, 374-75 (5th Cir.1984). It is also true that if, as in some asbestosis cases, unknown future product-liability tort creditors of the debtor, such as the Coxes, had been treated as claimants (or at least as parties in interest) in the Cary bankruptcy proceeding, provision would have been made for them there. In re UNR Industries, Inc., 725 F.2d 1111, 1120 (7th Cir.1984); Kane v. Johns-Manville Corp., 843 F.2d 636, 639-40 (2d Cir.1988); In re Amatex Corp., 755 F.2d 1034, 1041 (3d Cir.1985). Even then, the Coxes would not have been enjoined from suing Zerand; discharge operates as an injunction, but only against suing the debtor; the statute is explicit on this point, 11 U.S.C. Sec. 524(e), though the Fourth Circuit has read in an exception (inapplicable here) for suits against guarantors of the debtor's debts when the plan of reorganization provides for the discharge of those debts. In re A.H. Robins, Inc., 880 F.2d 694, 702 (4th Cir.1989). Had the Coxes been parties to the bankruptcy proceeding, they would have had no possible basis for a suit against Zerand. But that is not because the bankruptcy court could and would enjoin such a suit; it is because the successorship doctrine on which they rely is inapplicable if the plaintiff had a chance to obtain a legal remedy against the predecessor, even so limited a remedy as that afforded by the filing of a claim in bankruptcy. Conway v. White Trucks, 885 F.2d 90, 96 (3d Cir.1989) (interpreting Pennsylvania law). The Coxes did not have any such chance, since the accident occurred after the bankruptcy proceeding had wound up. But if they did, still Zerand would have to interpose its defense in the Pennsylvania suit. It could not go to the bankruptcy court for relief.

9

If as we believe Zerand is wrong in arguing that any proceeding, such as its adversary proceeding to block the Coxes' suit, that protects and enhances the value of the assets purchased at the bankruptcy sale invokes federal bankruptcy jurisdiction, the fact that the bankruptcy court, in the orders approving the bankruptcy sale and later in the plan of reorganization, purported expressly to assume jurisdiction to entertain such proceedings could not confer jurisdiction. A court cannot write its own jurisdictional ticket. Nor are we much impressed by the argument that if the provision in the bankruptcy-sale agreement purporting to enjoin products liability claims goes down the drain (as well it may if the issue is confided to the district court in Pennsylvania for decision in accordance with state law), Zerand will seek to rescind the agreement, thus ripping the bankruptcy open; this proves, it argues, that its adversary proceeding really is based on federal law. As we do not see how Zerand can rescind the sale agreement, we need not consider the larger question, on which the courts are divided, whether a suit that might trigger a related suit (a suit to rescind a bankruptcy sale would be a related suit) is itself therefore a "related" action within the meaning of section 1334(b). See Pacor, Inc. v. Higgins, 743 F.2d 984, 994-96 (3d Cir.1984); In re G.S.F. Corp., supra, 938 F.2d at 1474-76; In re Wolverine Radio Co., supra, 930 F.2d at 1142-43. An attack on a sale agreement that is the core and premise of a plan of reorganization is an attack on the plan itself, because the sale could not be undone without rescinding the plan, and an order confirming a plan becomes irrevocable (barring fraud) 180 days after its entry, 11 U.S.C. Sec. 1144--which is years before Zerand filed its adversary complaint. So the threatened rescission suit is no threat at all, In re Roberts Farms, Inc., 652 F.2d 793, 797 (9th Cir.1981); see also In re UNR Industries, Inc., 20 F.3d 766, 769-770 (7th Cir.1994); In re Chateaugay Corp., 10 F.3d 944, 952-53 (2d Cir.1993); In re Public Service Co., 963 F.2d 469 (1st Cir.1992), and thus no basis for deeming the suit that Zerand has brought related to the bankruptcy proceeding.

10

Zerand does not suggest that the district court in Chicago (as distinct from the bankruptcy court) could maintain jurisdiction over its suit on some ground besides bankruptcy jurisdiction. The suit was therefore properly dismissed.

[*~163]11

AFFIRMED.

*

Hon. Joe Billy McDade of the Central District of Illinois