Case Summary:
Plaintiff Chapter 7 Trustee filed an adversary proceeding seeking (i) a determination that Defendant’s asserted lien was invalid under state law, and (ii) a preliminary injunction enjoining Defendant from continuing state court litigation and collection efforts. Defendant filed a response along with a motion to abstain or, alternatively, to dismiss the case. The Court held that it was not required to abstain under 28 U.S.C. § 1334(c)(2) because the primary issue in the complaint regarding the validity of Defendant’s lien was a core proceeding under 28 U.S.C. § 157. Also, the Court did not discretionarily abstain under section 1334(c)(1) because permissive abstention was not in the best interest of justice, respect for state law, or comity with state courts. The proceeding concerned property of the estate, which this Court maintains exclusive jurisdiction over under § 1334(e).
Statute/Rule References:
11 U.S.C. § 362 -- Automatic stay
11 U.S.C. § 541 -- Property of the estate
28 U.S.C. § 157(b)(2)(K) -- Determination of the validity, extent, or priority of liens
28 U.S.C. § 1334(c), (e)
Key Terms:
Core Proceeding
Mandatory Abstention
Motion to Dismiss
Permissive Abstention
Property of the Estate