In Re Kava Bowl

41 B.R. 244, 1984 Bankr. LEXIS 5436
CourtUnited States Bankruptcy Court, D. Hawaii
DecidedJune 21, 1984
Docket19-00135
StatusPublished
Cited by3 cases

This text of 41 B.R. 244 (In Re Kava Bowl) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Kava Bowl, 41 B.R. 244, 1984 Bankr. LEXIS 5436 (Haw. 1984).

Opinion

ORDER DISMISSING CASE FOR LACK OF JURISDICTION

JON J. CHINEN, Bankruptcy Judge.

Kava Bowl, Ltd., (hereafter “Kava Bowl”) an American Samoan corporation, filed a Petition for relief under Chapter 11 on February 17, 1984, with the Clerk of the Bankruptcy Court, District of Hawaii. Kava Bowl was incorporated in American Samoa where it maintains its principal place of business, that of a bowling alley and a snack-shop, and where its principal assets are located. The schedules reveal that ten of Kava Bowl’s twelve listed creditors are in American Samoa.

On March 29, 1984, the Government of American Samoa (hereafter “Government”), a major creditor of Kava Bowl, filed herein a Motion to Dismiss Petition for Lack of Jurisdiction and Venue, which was heard before the undersigned Judge on June 4, 1984. Present were Thomas F. Casey, Jr., Esq., and Ted T. Tsukiyama, Esq., representing Kava Bowl, Joseph L. Dwight, Jr., Esq., representing Government, and William L. Yuen, Esq., representing Kalihi Bowl, Ltd., a creditor and principal shareholder of Kava Bowl.

Government contends, through its memo-randa and argument, that the petition should be dismissed because there is no bankruptcy jurisdiction over American Samoa. Congress has not promulgated an Organic Act for American Samoa but has granted all governmental authority over the territory to the designee of the President of the United States. The President has delegated this authority to the Secretary of the Interior who has, pursuant to this authority, approved the American Samoa Constitution which granted all judicial power to the High Court of American Samoa. Thus, Government contends that there is no United States District Court or Bankruptcy Court jurisdiction in American Samoa.

Kava Bowl contends that the Bankruptcy Court in the District of Hawaii has jurisdiction over Kava Bowl’s bankruptcy petition for the following reasons:

1. Kava Bowl’s accounting records are kept in Honolulu.

2. Kava Bowl has some cash in a Honolulu bank.

3. Kava Bowl has been collecting some accounts receivable in Honolulu.

Kava Bowl asserts that any person, including corporations, with property in the United States may be a debtor under Title 11.

Based upon the memoranda and record herein and the argument of counsel, the Court finds as follows:

*246 The legislation regarding the governance of American Samoa provides in part as follows:

Until Congress shall provide for the government of such islands, all civil, judicial and military powers shall be vested in such person or persons and shall be exercised in such manner as the President of the United States shall direct, (emphasis added). 48 U.S.C. 1661(c).

By Executive Order, the President delegated this power to the Secretary of the Interior of the United States. Exec. Order No. 10264, 3 C.F.R. 1949-1953 Comp., p. 765.

Under this authority the Secretary of the Interior approved the American Samoan Constitution which provides in part:

[T]he judicial power shall be vested in the High Court of American Samoa, the District Courts and such other courts as may from time to time be created by law. Rev. Const. Am Sam. Art. Ill, Sec. 1.

The judicial power of the Territory of American Samoa is thus vested in the High Court of American Samoa. Further the American Samoa Code enacted by the territorial legislature (Fono) has not provided for the remedy of bankruptcy but has provided for receiverships in cases of insolvency-

In contrast to the governance of American Samoa, Congress has, by statute or amendment thereto, extended the Bankruptcy Code to the Virgin Islands, 48 U.S.C. § 1612, Guam, 48 U.S.C. § 1424, and the Northern Marianas Islands. 48 U.S.C. § 1694(c). The basis for bankruptcy jurisdiction in Puerto Rico differs from these areas for, although there has been no technical amendment extending bankruptcy jurisdiction and there is no specific inclusion of Puerto Rico under the Bankruptcy Code, bankruptcy jurisdiction there has been sustained on the basis of District Court jurisdiction, the fact that the U.S. bankruptcy system has been applied there for over 70 years, and the Administrative Office of the U.S. Courts has staffed and supported the Bankruptcy Court in Puerto Rico, which has processed over 1400 bankruptcy cases. In re Segarra, 14 B.R. 870 (Bankr.P.R.1981).

No statute or amendment to any statute has been enacted to extend the Bankruptcy Code to American Samoa. And, unlike Puerto Rico, the United States bankruptcy system has never been applied in American Samoa. Thus, there is no bankruptcy remedy in American Samoa.

Kava Bowl contends that by virtue of 11 U.S.C. § 109(a), it may file a petition in bankruptcy in the District of Hawaii.

11 U.S.C. 109(a), entitled “Who may be a debtor”, states:

Notwithstanding any other provision of this section, only a person that resides in the United States, or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.

28 U.S.C. 1472, concerning venue of eases under title 11, states:

Except as provided in section 1474 of this title, a case under title 11 may be commenced in the bankruptcy court for a' district—
(1) in which the domicile residence, principal place of business, in the United States, or principal assets, in the United States, of the person or entity that is the subject of such case have been located for the 180 days immediately preceding such commencement....

In the instant case, Kava Bowl acknowledges that it was incorporated in American Samoa and that'its principal place of business and principal assets are in American Samoa. Yet, Kava Bowl contends that, because it has some cash and accounting records in Honolulu and does some collection of accounts receivable in Honolulu, it has sufficient property within the District of Hawaii to grant this Bankruptcy Court jurisdiction over Kava Bowl. Kava Bowl further argues that, if it has filed in the wrong district for venue purposes, that pursuant to Bankruptcy Rule 1014(a)(1), this Court may retain the case or transfer it to any other district for the convenience *247 of the parties and witnesses and in the interests of justice.

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41 B.R. 244, 1984 Bankr. LEXIS 5436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-kava-bowl-hib-1984.