The Third Circuit will decide whether the broad language in the Federal Magistrate Act allows magistrate judges to issue final orders on bankruptcy appeals when the parties consent.
The Delaware district court affirmed Bankruptcy Judge Thomas Horan, who ruled that a creditor cannot sue a chapter 15 debtor in bankruptcy court on a prebankruptcy claim.
The new J&J filing starkly raises the issue of venue-shopping. If the new case remains in Houston, the Texas court would not be bound by the Third Circuit’s ‘financial distress’ requirement.
A noncompetition agreement that would preclude finding other sources of revenue can be the basis for showing irreparable harm and entitlement to a preliminary injunction.
The ‘attenuated possibility of insolvency’ in the future does not establish ‘financial distress,’ Circuit Judge Ambro said, interpreting his own prior opinion.
Bankruptcy Judges Wiles in New York decided that insiders were not entitled to releases under Section 503(c), but not for the reasons contained in Purdue.
