Narrative Opinion Summary
New Castle Shellfish Co. is undergoing a Chapter 7 bankruptcy proceeding initiated in May 1982. Richard G. Elliott, Jr., the trustee, filed a complaint against John and Irene Smith on December 22, 1982, alleging usurpation of a corporate opportunity. The Smiths moved to dismiss the complaint, arguing lack of subject matter jurisdiction in the bankruptcy court. The Third Circuit Court of Appeals, in Coastal Steel Corporation v. Tilghman Wheelabrator, Ltd., clarified that federal district court jurisdiction under 28 U.S.C. § 1471(b) remains intact despite the Northern Pipeline decision. The court confirmed that both the District Court of Delaware and the bankruptcy court possess jurisdiction over Chapter 11 and related proceedings, pursuant to Revised Rule No. 1, effective December 23, 1982. Consequently, the motion to dismiss by John and Irene Smith is denied.
Legal Issues Addressed
Denial of Motion to Dismisssubscribe to see similar legal issues
Application: The motion to dismiss filed by the Smiths was denied because the bankruptcy court has jurisdiction to hear the trustee's complaint.
Reasoning: Consequently, the motion to dismiss by John and Irene Smith is denied.
Jurisdiction of Bankruptcy Courtsubscribe to see similar legal issues
Application: The bankruptcy court retains jurisdiction over the complaint filed by the trustee against the Smiths, as the federal district court's jurisdiction under 28 U.S.C. § 1471(b) remains intact.
Reasoning: The Third Circuit Court of Appeals, in Coastal Steel Corporation v. Tilghman Wheelabrator, Ltd., clarified that federal district court jurisdiction under 28 U.S.C. § 1471(b) remains intact despite the Northern Pipeline decision.
Jurisdiction Under Revised Rule No. 1subscribe to see similar legal issues
Application: The court confirmed that the jurisdiction extends to Chapter 11 and related proceedings, allowing the bankruptcy court to hear the case against the Smiths.
Reasoning: The court confirmed that both the District Court of Delaware and the bankruptcy court possess jurisdiction over Chapter 11 and related proceedings, pursuant to Revised Rule No. 1, effective December 23, 1982.