Case Summary:
Plaintiffs filed an adversary complaint against Debtor seeking an exception to discharge under 11 U.S.C. §§ 523(a)(2) and (a)(6). The Plaintiffs moved the Court to permissively abstain under 28 U.S.C. § 1334(c)(1). The Plaintiffs agreed that whether a debt is nondischargeable in a bankruptcy case is a “core” proceeding as defined by 28 U.S.C. § 157(b)(2)(I). The Court concluded that since the Plaintiffs’ Complaint raised issues of nondischargeability under 11 U.S.C. § 523, it had authority to decide the issue of dischargeability. Since Stern v. Marshall, 564 U.S. 462 (2011), the United States Supreme Court in Wellness Int’l Network, Ltd. v. Sharif, __ U.S. __, 135 S. Ct. 1932 (2015), clarified that bankruptcy courts are permitted to adjudicate liability and damages existing under non-bankruptcy law provided the parties consent to the court’s jurisdiction. The Court concluded it had both jurisdictional and constitutional authority to determine whether there was a non-dischargeable debt.

Statute/Rule References:
28 U.S.C. § 157(a)
28 U.S.C. § 1334 -- Abstention

Key Terms:
Abstention