United States District Court, D. Montana, Great Falls Division
MORRIS UNITED STATES DISTRICT COURT FUDGE.
Jeremiah J. Foster (“Foster”) filed an action in
bankruptcy court against defendant Dennis Conner
(“Conner”) on October 19, 2017. (Doc. 3 at 1.)
Conner filed a Motion to withdraw the Reference of the
Adversary Proceeding from bankruptcy court on June 15, 2018.
(Doc. 1.) Foster opposes the motion. (Doc. 4.)
at one point maintained membership of fifteen LLCs including
Shoot the Moon III, LLC (“STM III”), and Shoot
the Moon X Realty, LLC (“STMXR”). Conner made
loans to STM III while a member of STM III that were
consolidated into a single promissory note from STM III to
membership interest in the entities ended pursuant to the
terms of a Redemption Agreement executed on January 1, 2014.
Conner received a building at 1401 Market Place Drive, Great
Falls, Montana, in exchange for his membership interest.
STMXR transferred The Market Place Property by Warranty Deed
from STMXR to Conner on August 6, 2014.
individual and stand-alone LLCs were merged into Shoot the
Moon, LLC (“STM”) on October 20, 2015. STM filed
for Chapter 11 bankruptcy in the United States Bankruptcy
Court for the District of Montana the following day. Conner
filed a proof of claim as a creditor against Debtor's
Bankruptcy Estate in the amount of $923, 351.12, on January
19, 2016. Conner amended his proof of claim against
Debtor's Bankruptcy Estate to increase his claim to $955,
745.14 on May 31, 2016.
parties agreed to attempt to resolve potential claims through
mediation. The parties negotiated and executed a
“Tolling Agreement” on October 12, 2017. (Doc.
5.) The Tolling Agreement extended the deadline on all claims
and defenses until December 8, 2017. Id.
commenced a preference and fraudulent transfers proceeding
against Conner in bankruptcy court on October 19, 2017. The
parties failed to resolve the matter through mediation.
Conner filed a Notice to withdraw his proof of claim with the
bankruptcy court while the Tolling Agreement was still in
effect on November 27, 2017. Conner then moved for this Court
to withdraw the reference from bankruptcy court on June 15,
2018. (Doc. 1.) Foster opposes the motion. (Doc. 4.)
Court conducted a status conference on November 19, 2018.
(Doc. 8.) The parties and the Court agreed that the
Court's order on Conner's motion to withdraw the
reference would follow the bankruptcy court's order on
Conner's Motion to withdraw the proof of claim.
Id. The bankruptcy court granted Conner's Motion
to withdraw his Proof of Claim on January 9, 2019. This Order
addresses Conner's Motion to withdraw the reference from
bankruptcy court. (Doc. 1.)
motion requesting withdrawal of the reference from the
bankruptcy court must be heard by the district court judge.
Fed. R. Bank. P. 5011(a). Once the motion for withdrawal
comes before the district court, it must make appropriate
findings supporting withdrawal, or deny the motion.
III of the United States Constitution vests the judicial
power of the United States in the United States Supreme Court
and such inferior courts as Congress may occasionally ordain
and establish. U.S. Const. art III, § 1. District courts
possess original jurisdiction over bankruptcy cases and
related proceedings. A district court may refer a proceeding
arising under title 11, or related to a case under title 11,
to the bankruptcy judge for the district. 28 U.S.C. §
that files a proof of claim voluntarily brings itself into
the bankruptcy court. See In re Global Technovations, 694
F.3d 705, 722 (6th Cir. 2012). The party's triggering of
the bankruptcy court's jurisdiction provides the
bankruptcy court with jurisdiction to hear the entire case.
See Sec. ...