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In re Drewes v. Zip Feed Mills, Inc.
Citations: 119 B.R. 197; 1990 Bankr. LEXIS 2099Docket: Bankruptcy No. 89-05299; Adv. No. 90-7040
Court: United States Bankruptcy Court, D. North Dakota; August 1, 1990; Us Bankruptcy; United States Bankruptcy Court
A consolidated adversary proceeding initiated by the trustee on June 26, 1990, involves claims against thirteen defendants for alleged preferences and fraudulent conveyances. Ten of the defendants have requested a jury trial, while three have not responded. The court references Granfinanciera v. Nordberg, which established that the Seventh Amendment preserves the right to a jury trial for fraudulent transfer claims in bankruptcy cases, and indicates that a similar right applies to preference actions under section 547. However, if a creditor has filed a proof of claim, they forfeit the right to a jury trial in favor of the bankruptcy court's equitable jurisdiction. Dale and Leon Roesler, Kent Roesler, Merle Schatzke, and Orval Beadles filed proofs of claim, thus relinquishing their right to a jury trial. In contrast, the six defendants who did not file claims—Eldon Saunders, Alvin Leedahl, Steve Brakke, Paul Brakke, Don Brakke, and Dallas Glasow—retain their right to a jury trial. The ruling states that bankruptcy judges lack the authority to conduct jury trials in such cases, necessitating the transfer of the claims against the latter group to the United States District Court for the District of North Dakota for trial. The bankruptcy court will retain jurisdiction over the remaining actions against the other defendants. The order stipulates that all future pleadings and correspondence regarding the transferred actions should be directed to the District Court, while the bankruptcy court continues to manage the adversary proceeding for the retained claims. The document lists the claims filed by the defendants and references a prior case (In re United Missouri Bank of Kansas City) that supports the withdrawal of the reference for the transferred claims.