United States District Court, E.D. Louisiana
ORDER AND REASONS
TRICHE MILAZZO UNITED STATES DISTRICT JUDGE
the Court is Baker Hughes Oilfield Operations, LLC's
Motion to Withdraw the Reference for Adversary Number
18-01028 (Doc. 1). For the following reasons, the Motion is
March 24, 2016, an involuntary petition for Chapter 11
bankruptcy was filed against Whistler Energy II, LLC
(“Whistler Energy”). On January 25, 2017, a plan
of reorganization was confirmed. As part of the plan, certain
causes of action were transferred and assigned to a
litigation trust. Subsequently, the Trustee of the Whistler
Energy II, LLC Litigation Trust filed a Complaint against
Baker Hughes Oilfield Operations, LLC (“Baker
Hughes”) in bankruptcy court seeking to avoid and
recover an allegedly preferential transfer made to Baker
Hughes by Whistler Energy. Baker Hughes did not submit a
proof of claim against the bankruptcy estate. Baker Hughes
now asks this Court to withdraw the reference of that
adversary proceeding, which the Trustee opposes.
Court's decision in this matter is governed by 28 U.S.C.
§ 157(d), which provides for both permissive and
mandatory withdrawal of the reference. It states that:
The 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. 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.
case presents an issue of permissive withdrawal. Although
“cause shown” is not defined by statute, the
Fifth Circuit has indicated that the district court should
consider the following factors in articulating the foundation
for its decision:
(1) whether the matter at issue is a core or a non-core
(2) whether the proceedings involve a jury demand, and (3)
whether withdrawal would further the goals of (a) promoting
uniformity in bankruptcy administration, (b) reducing forum
shopping and confusion, (c) fostering the economical use of
the debtor's and creditors' resources, and (d)
expediting the bankruptcy process.
Court will consider these factors.
proceeding is core under [28 U.S.C. §] 157 if it invokes
a substantive right provided by title 11 or if it is a
proceeding that, by its nature, could arise only in the
context of a bankruptcy case.” The parties do not dispute
that this action to avoid and recover a preferential ...