Hadar Leasing International Co. v. D. H. Overmyer Telecasting Co. (In Re Hadar Leasing International Co.)

14 B.R. 819, 7 Bankr. Ct. Dec. (CRR) 686, 1981 U.S. Dist. LEXIS 12775
CourtDistrict Court, S.D. New York
DecidedMay 1, 1981
Docket81 B 10689 81 Civ. 2380, Civ. 2380
StatusPublished
Cited by32 cases

This text of 14 B.R. 819 (Hadar Leasing International Co. v. D. H. Overmyer Telecasting Co. (In Re Hadar Leasing International Co.)) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hadar Leasing International Co. v. D. H. Overmyer Telecasting Co. (In Re Hadar Leasing International Co.), 14 B.R. 819, 7 Bankr. Ct. Dec. (CRR) 686, 1981 U.S. Dist. LEXIS 12775 (S.D.N.Y. 1981).

Opinion

GAGLIARDI, District Judge.

Since all parties are familiar with the events leading up to this appeal there is no need for me to recount in detail those events.

When the parties appeared before me last week, they agreed on a briefing schedule to which all parties have substantially adhered. At that time, Judge Galgay’s order transferring this case to the Northern District of Ohio was effective as of April 21st, and I ordered a stay of that order until today, with the understanding that if at all possible I would render my decision on this appeal today. Although the briefing schedule was extended for one additional day, I have nonetheless concluded that the interests of all concerned would be best served by a prompt decision, thereby alleviating the need for a further extension of the stay.

A threshold question before reaching the merits is whether Judge Galgay’s order transferring venue, pursuant to 28 U.S.C. § 1475, is appealable. This court, of course, has jurisdiction over all final orders from the Bankruptcy Court under 28 U.S.C. § 1334(a). A bankruptcy order transferring venue, though, is an interlocutory order, similar to an order transferring venue under § 1404(a). This does not, however, preclude judicial review of the order, since an interlocutory order may be appealed with leave of the court to which the appeal is taken under 28 U.S.C. § 1334(b). Subsection (d) of Rule 8004 of the Suggested Interim Bankruptcy Rules, adopted in this district, permits the court to waive the required application for leave to appeal if a timely notice of appeal is filed. I will consider Radar’s timely notice of appeal an application for leave to appeal. Collier suggests, at § 3.02[g], that unlike a § 1404 order, where there is little prejudice by deferring appeal until the conclusion of the case, there is good reason to grant leave to appeal freely from a bankruptcy venue transfer order. Accordingly, I grant, nunc pro tunc, Hadar’s motion for leave to appeal as of April 20th.

The parties appear to be in agreement on the applicable legal standards for the bankruptcy court’s consideration of a motion to transfer venue, as well as on this court’s standard of review from that order. Pursuant to Fed.R.Bank. 810, unless I find that Judge Galgay’s findings were clearly erroneous, I must affirm his order of transfer.

The two applicable statutes on a motion to transfer venue are 28 U.S.C. § 1475 which contains the relevant language governing the exercise of the bankruptcy court’s discretion: a case may be transferred “in the interest of justice and for the convenience of the parties,” and Bankruptcy Rule 116(b), which repeats the same standard and adds the procedural requirement that the court may transfer a case “after hearing on notice to petitioner and such other persons as it may direct.” Rule 116 goes on to state that “the transfer may be ordered at or before the first meeting of creditors.”

In order to refine the broad and somewhat nebulous terms “convenience of witnesses” and “interest of justice”, courts have considered five concrete standards. These are 1) proximity of creditors of every kind to the court; 2) proximity of the debt- or to the court; 3) proximity of witnesses necessary to administration of the estate; 4) location of assets and 5) economic administration of the estate. Matter of Commonwealth Oil Refining Co., 596 F.2d 1239, 1247 (5th Cir. 1979). Occasionally, courts have applied a sixth standard; whether the intertwined relationship of debtors requires proceedings in one district. See In re Banker’s Trust, 403 F.2d 16 (7th Cir. 1968), citing In Re Hudick-Ross, 198 F.Supp. 695 (S.D.N.Y.1961).

Judge Galgay made eleven specific findings after hearing argument on the motion. Contrary to appellant’s arguments, I find that there was adequate support for *821 these findings, based solely on uncontro-verted facts on the record before him, primarily in Hadar’s Chapter 11 petition. These findings, as they relate to the standards I have outlined, are: first, that the majority of Hadar’s creditors are located in the Northern District of Ohio or in adjacent districts. I have reviewed the creditors’ list attached to the Chapter 11 petition and I conclude that there was a valid basis for Judge Galgay’s finding. Of the nineteen creditors listed, eight are located in Ohio or Michigan. An additional six are in states other than New York and five are listed with New York addresses. I have eliminated Hundred East Credit from this calculation, the secured creditor joining in the motion to transfer. It is true, of course, that Judge Galgay did not consider the motion of the intervening creditors which is now before me. I first note that according to the Rules, it was not error for Judge Galgay to proceed with the argument on the motion without notice to creditors. Rule 116(b) states that notice shall be given to those whom the court directs, and I have found no explicit authority, nor have the intervenors cited any, which mandates notice to creditors on a motion to transfer venue. Since Rule 116 authorizes transfer before the first meeting of creditors, it permits transfer before the creditors are heard. Furthermore, as one court stated in denying a motion to transfer despite the overwhelming support of creditors in favor of transfer, “[i]f creditors’ committees would be permitted to select the venue in an arrangement proceeding, it would completely thwart the venue provision of the Rules.” Matter of Distributors Warehouse, Inc., 1 B.R. 539, 542 (M.D.Fla.1979) (Bankruptcy Court). The governing standard is the proximity of the creditors to the court, not the creditors’ choice of forum. Four of the six intervening creditors are in Ohio, and the remaining two in Michigan, they are indeed in greater proximity to Ohio than to New York.

The next factor is the proximity of the Bankrupt to the court. This consideration of course anticipates that it would be more convenient for the debtor, and would provide for ease of administration of the estate if the officers and directors were located in close proximity to the court. Judge Galgay found that Hadar is incorporated in Ohio, and further that it is not licensed to do business in New York. He further relied on Hadar’s own admission that it intended to litigate in Ohio, which could fairly lead to the inference that its officers expected to appear before the Ohio court. Even without accepting the assertions of the movants at argument that Hadar’s operation in New York is comprised of a staff of three persons occupying space rented to an Over-myer entity, there was sufficient support for finding that Hadar could be available without hardship in Ohio.

Finally, the factor which overwhelmingly militates in favor of transfer was Judge Galgay’s finding, again by Hadar’s own admission, that substantially all of its assets are in Ohio. The relationships between Hadar, Telecasting and Hundred East arise from the equipment which is in Ohio and under the jurisdiction of the Ohio court.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Untitled Case
E.D. California, 2026
Reece v. Carey
W.D. Kentucky, 2022
In Re Enron Corp.
284 B.R. 376 (S.D. New York, 2002)
In Re Eclair Bakery Ltd.
255 B.R. 121 (S.D. New York, 2000)
United States Trustee v. Sorrells (In Re Sorrells)
218 B.R. 580 (Tenth Circuit, 1998)
In Re Abacus Broadcasting Corp.
154 B.R. 682 (W.D. Texas, 1993)
In re Gale
144 B.R. 411 (E.D. Arkansas, 1992)
In Re Portjeff Development Corp.
118 B.R. 184 (E.D. New York, 1990)
In Re Ridgely Communications, Inc.
107 B.R. 72 (D. Maryland, 1989)
In Re Greenhaven Associates, Ltd.
93 B.R. 35 (S.D. New York, 1988)
In Re Texaco Inc.
89 B.R. 382 (S.D. New York, 1988)
In Re Bell Tower Associates, Ltd.
86 B.R. 795 (S.D. New York, 1988)
In Re Pope Vineyards
90 B.R. 252 (S.D. Texas, 1988)
In Re Ofia Realty Corp.
74 B.R. 574 (S.D. New York, 1987)
In Re Waits
70 B.R. 591 (S.D. New York, 1987)
In Re Old Delmar Corp.
45 B.R. 883 (S.D. New York, 1985)
In Re Ryan
38 B.R. 917 (N.D. Illinois, 1984)
In Re Andover Data Services, Inc.
35 B.R. 297 (S.D. New York, 1983)
In Re International Filter Corp.
33 B.R. 952 (S.D. New York, 1983)

Cite This Page — Counsel Stack

Bluebook (online)
14 B.R. 819, 7 Bankr. Ct. Dec. (CRR) 686, 1981 U.S. Dist. LEXIS 12775, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hadar-leasing-international-co-v-d-h-overmyer-telecasting-co-in-re-nysd-1981.