United States District Court, D. Arizona
ORDER MOTION FOR WITHDRAWAL OF REFERENCE
Russel Holland United States District Judge.
Harmon and Plattner defendants move for an order withdrawing
the reference of this adversary proceeding (No.
2:13-ap-00526-PS) from the bankruptcy court. This motion is
opposed. Oral argument was requested but is not
August 4, 2011, Bill Johnson's Restaurants, Inc. (BJR)
filed a petition for bankruptcy protection under Chapter 11
(the Administrative Case). The Plan of Reorganization was
confirmed on May 1, 2013 by Judge Sarah Sharer Curley. Judge
Curley also oversaw numerous disputes related to
administrative expenses. As part of the Plan of
Reorganization, the CT Trust was created for the benefit of
creditors and shareholders of the estate.
3, 2013, the complaint in the adversary proceeding was filed.
In that complaint, BJR alleged a variety of claims against
the Harmon defendants, who were BJR's CPA, and the
Plattner defendants, who were BJR's legal counsel,
arising out of their involvement in the administration and
termination of BJR's Pension Plan. More specifically, BJR
asserted professional negligence, breach of fiduciary duty,
aiding and abetting, and conspiracy claims against the Harmon
and Plattner defendants. In the adversary proceeding, Judge
Curley decided a motion to intervene, two motions to dismiss,
a motion to consolidate, and a motion to stay.
1, 2014, the Administrative Case and the adversary proceeding
were reassigned to Judge Paul Sala because Judge Curley was
retiring. Since the Administrative Case was reassigned to
him, Judge Sala has approved a number of stipulated
settlements. Since the adversary proceeding was reassigned to
him, Judge Sala has approved several stipulated settlements,
a stipulation to file a Third Amended Complaint, stipulated
motions to modify the scheduling order, and a discovery
27, 2014, this court denied a motion for withdrawal of
reference brought by the Plattner defendants and joined in by
the Harmon defendants. The court found that
in light of the bankruptcy court's prior experience with
this case, as well as the fact that the adversary proceeding
is conceded to involve a mixture of core and non-core issues,
... it will in this case be more efficient for the adversary
proceeding to continue before the bankruptcy court for
discovery, preliminary motion practice, and the sorting of
core and non-core issues.
court, however, gave defendants leave to renew their motion
for withdrawal of reference “once dispositive motions
have been briefed” but prior to those motions being
reviewed by the bankruptcy court.
Third Amended Complaint in the adversary proceeding,
plaintiffs BJR and the CT Trust assert claims of professional
negligence, violation of the Trust Fund Doctrine, aiding and
abetting, and civil conspiracy against the Harmon and
Plattner defendants. Plaintiffs have filed a motion for
partial summary judgment asking the court to find that
defendants waived their right to object to the amount of the
claims filed by creditors of the estate, and defendants have
each filed a motion for summary judgment contending that
plaintiffs have failed to meet their burden of proof as to
each of their claims. These summary judgment motions are
fully briefed. The bankruptcy court had scheduled oral
argument on these motions in December, but argument has now
been continued until early January, pending the resolution of
the instant motion.
Harmon and Plattner defendants now renew their motion for an
order withdrawing the reference of the adversary proceeding
from the bankruptcy court.
157(d) of Title 28 of the United States Code “governs
the district court's authority to withdraw the
reference....” Security Farms v. Int'l Broth.
of Teamsters, Chauffers, Warehousemen & Helpers, 124
F.3d 999, 1008 (9th Cir. 1997). The court may order a
withdrawal “‘for cause
shown.'” Id. (quoting 28 U.S.C.
§ 157(d) (emphasis added)). “In determining
whether cause exists, a district court should consider the
efficient use of judicial resources, delay and costs to the
parties, uniformity of bankruptcy administration, the
prevention of forum shopping, and other related