In re: Celsius Network LLC et al. v. Mashinsky
In re: Celsius Network LLC et al., Mohsin Y. Meghji, as Representative for the Post-Effective Date Debtors v. Alexander Mashinsky et al.
- Ho
- 1:25-cv-01414
- U.S. District Court · Southern District of New York
- 4
In re Celsius Network v. Alexander Mashinsky: Judge Ho denied Beaudry’s request to move claims from bankruptcy court and denied his discovery-stay request as moot.
Defendant Jeremie Beaudry, the other defendants who joined his withdrawal motion, the plaintiff representing the post-effective-date debtors, and the bankruptcy court handling the case.
What happened
In re Celsius Network v. Alexander Mashinsky concerns Defendant Jeremie Beaudry’s request to move the claims against him from the bankruptcy court to the district court. Other defendants joined that request.
Beaudry argued that some claims were outside the bankruptcy court’s main authority and that he had a right to a jury trial in district court. The plaintiff argued that the request was premature because the bankruptcy court could handle the case before any trial.
Judge Dale E. Ho agreed that the request was premature because Beaudry had not first asked the bankruptcy court to determine whether the claims were outside its main authority, and the case was not ready for trial. Judge Ho denied the request without prejudice and denied Beaudry’s request to pause discovery as moot.
The detailed version
- In re: Celsius Network LLC et al. v. Mashinsky · No. 1:25-cv-01414
- Ho
- Nov. 17, 2025
Background
The court considered two motions filed by Defendant Jeremie Beaudry: (1) a motion to withdraw the reference of the claims against him from the bankruptcy court, and (2) a motion to stay, or pause, discovery while the first motion was pending. Other defendants joined the motion to withdraw the reference.
A bankruptcy-court reference is the process by which a district court sends bankruptcy-related matters to the bankruptcy court. Under 28 U.S.C. § 157(d), a district court may withdraw that reference for cause. Courts in the Second Circuit consider whether the claims are core or non-core, whether they are legal or equitable, efficiency, delay and cost, uniformity in administering bankruptcy law, and the risk of forum shopping.
The Parties’ Arguments
Beaudry argued that the common-law and state-law claims against him were non-core claims, meaning they did not arise from the bankruptcy case’s central matters. He also argued that the bankruptcy court could not constitutionally enter a final decision on the remaining claims because he had not filed a proof of claim in the bankruptcy proceeding and had asserted a Seventh Amendment right to a jury trial in an Article III district court.
The plaintiff argued that withdrawal was premature. Citing a prior related proceeding, the plaintiff maintained that a bankruptcy court may continue handling pretrial proceedings even when a district court will ultimately conduct a jury trial.
Court’s Analysis
The court agreed that the motion was premature for two reasons. First, Beaudry had not asked the bankruptcy court to make an initial determination about whether the claims were core or non-core. The court explained that Second Circuit decisions generally require that initial determination before a party seeks withdrawal partly on the ground that the claims are non-core.
Second, the court held that withdrawal generally becomes ripe when the case is ready for trial. Before then, the bankruptcy court is generally better positioned to manage complex pretrial proceedings and its familiarity with the litigation supports judicial efficiency. The court noted that Beaudry did not respond to the plaintiff’s prematurity argument or distinguish the prior related proceeding relied on by the plaintiff.
Because the motion was premature, the court did not examine the remaining factors in detail. It nevertheless noted that those factors also favored denial because the bankruptcy court was best positioned to continue managing the litigation.
Disposition
Judge Dale E. Ho DENIED WITHOUT PREJUDICE Beaudry’s motion to withdraw the reference. The court DENIED AS MOOT Beaudry’s motion to stay discovery. The Clerk of Court was directed to close the docket entries for both motions. The opinion did not decide the ultimate merits of the claims against Beaudry.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.