Elliott v. Smith (In re New Castle Shellfish Co.)

32 B.R. 548, 1983 Bankr. LEXIS 5601

• Court: United States Bankruptcy Court, D. Delaware
• Decided: August 16, 1983
• Docket: Bankruptcy No. 82-180; Adv. No. 82-131
• Status: Published

Opinion

ORDER DENYING MOTION TO DISMISS

HELEN S. BALICK, Bankruptcy Judge.

New Castle Shellfish Co. is a debtor in a Chapter 7 proceeding filed in May 1982. Richard G. Elliott, Jr., as trustee filed an action against John Smith and Irene Smith on December 22, 1982, alleging usurpation of a corporate opportunity. The Smiths have filed a motion to dismiss the complaint on the ground that the bankruptcy court does not have subject matter jurisdiction.

The Third Circuit Court of Appeals has ruled on this question. The nature of the dispute in Coastal Steel Corporation v. Tilghman Wheelabrator, Ltd. and Wheelabrator-Frye, Inc., 709 F.2d 190 (3d Cir.1983) initially required a determination of whether there was subject matter jurisdiction in any federal court. It held that despite the Northern Pipeline case, the grant of district court subject matter jurisdiction in § 1471(b) survived and the New Jersey local rule providing the manner for the continued exercise of that jurisdiction is consistent with the Code and the Northern Pipeline decision.

Thus, the District Court of Delaware and this court through Revised Rule No. 1, dated December 23, 1982, which provides for referral of bankruptcy cases and proceedings has jurisdiction over not only the Chapter 11 proceeding but also related proceedings, subject to various restrictions; and

IT IS ORDERED that John and Irene Smith’s motion to dismiss the complaint is DENIED.