In Re Quebecor World (USA) v. Rexel Inc.

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Bankruptcy

New York Law Journal

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Judge Jesse Furman

Trustee Davis' 2010 adversary action against Southland Electrical Supply arose from Quebecor World (USA)'s Chapter 11 bankruptcy. On his June 2012 judgment motion, a bankruptcy judge found the issue to be if Rexel Inc.—which did business as Southland Electrical Supply—was legally distinct from Southland, and thus an improper defendant. Southland sought withdrawal of the proceeding's reference to bankruptcy court under 28 USC §157(d), arguing that because its case entailed resolution of state law defenses, it met the standards for mandatory withdrawal. Southland also claimed the case qualified for permissive withdrawal because it did not consent to bankruptcy court jurisdiction. In addition to claiming "blatant forum shopping" by Southland, Davis claimed withdrawal would not promote judicial efficiency. District court denied withdrawal. Finding the case did not raise a conflict between Title 11 and other federal law, it deemed §157(d)'s mandatory withdrawal not satisfied. Deeming the action a "core" proceeding, the court found Southland did not show cause for permissive withdrawal, which would hinder judicial efficiency. No factor in In re Orion Pictures v. Showtime Networks favored withdrawal.

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