Injunctions

| Sep 6, 2010 | Bankruptcy |

In re Beard is a case out of Dallas where the debtor in a Chapter 13 Bankruptcy case was allegedly engaged in delaying tactics to postpone or prevent his eviction by the mortgage creditor.  The creditor sought an injunction preventing the debtor from filing suit against it.

The court determined that the motion was neither a core proceeding as defined by the bankruptcy code nor did the debtor consent to jurisdiction as provided for in the Bankruptcy Code.  Therefore, jurisdiction could only flow from section 157 which provides for “related to” jurisdiction.
Therefore, the Court ruled that it could only make recommendations, and the creditor must receive relief from the district court.  In dicta, the court suggested that even if the debtor had consented to jurisdiction, the court would have no way to grant meaningful relief to the creditor.  Under Fifth Circuit precedent, “a district court’s pre-filing injunction does not extend to state courts, federal courts outside the ruling court’s circuit or higher (appellate courts).”  
The court noted that a bankruptcy court might be considered inferior to a district court, and therefore any such injunction purporting to prevent the debtor from filing suit would be ineffective.  Accordingly, the court ruled that the case must be heard by the district court.