Date of Decision:
October 5, 2010
Whether the Court had jurisdiction over an adversary proceeding in which one creditor sought a determination that its liens against certain sale proceeds that had been paid to another creditor were senior to that creditor's liens against the same proceeds?
No. The adversary proceeding did not "arise under" title 11, because it did not implicate any provision of title 11. It did not "arise in" a case under title 11, because the underlying dispute was between two creditors and did not involve either the debtors or the chapter 7 trustee and because the proceeds were no longer property of the estate. Finally, it was not "related to" a case under title 11, because the outcome could not have any conceivable effect on the debtors or the bankruptcy estate.
Full Bankruptcy Court Decision: