47 Spy Glass Hill Corp. v. United States Trustee
- Kenneth Karas
- 7:23-cv-06807
- U.S. District Court · Southern District of New York
- 2
In 47 Spy Glass Hill Corp. v. United States Trustee, Judge Karas dismissed as moot the debtor’s motion to withdraw its bankruptcy case from bankruptcy court.
47 Spy Glass Hill Corp.’s motion to withdraw the reference was dismissed as moot after the Bankruptcy Court dismissed the underlying Chapter 11 case; the United States Trustee was the opposing party.
What happened
47 Spy Glass Hill Corp. filed a motion asking the district court to take over its Chapter 11 case from the Bankruptcy Court. The United States Trustee had separately asked the Bankruptcy Court to dismiss or convert the case, arguing that the debtor could not appear in federal court without a lawyer.
The debtor did not object to the Trustee’s motion. The Bankruptcy Court dismissed the bankruptcy case, then ended the motion to withdraw the case as moot. Because the underlying case no longer existed, there was nothing for the district court to take over.
Judge Kenneth M. Karas dismissed 47 Spy Glass Hill Corp.’s motion for withdrawal of reference as moot. The Clerk was directed to mail the order to the debtor.
The detailed version
- 47 Spy Glass Hill Corp. v. United States Trustee · No. 7:23-cv-06807
- Kenneth Karas
- Sept. 11, 2023
Background
47 Spy Glass Hill Corp. filed a Chapter 11 bankruptcy case in the Bankruptcy Court for the Southern District of New York on April 12, 2023. On August 3, 2023, the debtor, proceeding without a lawyer, filed a motion under 28 U.S.C. § 157(d) asking the district court to withdraw the reference—that is, to take the bankruptcy case or proceeding away from the Bankruptcy Court and hear it in the district court.
While that motion was pending, the United States Trustee moved in the Bankruptcy Court to dismiss or convert the bankruptcy case. The Trustee argued that the debtor was a fictitious person that could not appear in federal court without a lawyer. The debtor did not object. On August 9, 2023, the Bankruptcy Court dismissed the bankruptcy case. The next day, it terminated the debtor’s motion to withdraw the reference as moot.
Court’s Reasoning
The district court explained that a motion to withdraw a bankruptcy reference requires a case or proceeding that can be withdrawn. Once the Bankruptcy Court dismissed the underlying bankruptcy case, no matter remained for the district court to take over. The court relied on decisions holding that dismissal of the underlying bankruptcy matter makes a motion to withdraw the reference moot.
Disposition
Judge Kenneth M. Karas dismissed the debtor’s Motion for Withdrawal of Reference as moot. The order did not decide whether the Trustee’s argument about the debtor’s ability to proceed without a lawyer was correct. The Clerk of Court was directed to mail a copy of the order to the debtor.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.