In re Harris, No. 07-5630 (9th Cir. Dec. 21, 2009)
The Ninth Circuit released Harris yesterday, December 21, 2009. In Harris, the Ninth Circuit grappled with factually and procedurally difficult questions. One of those was whether a Bankruptcy Court lacked subject matter jurisdiction when it heard a state law breach of contract claim. A state law claim does not “arise under” Title 11, but the Ninth Circuit concluded it did “arise in” a bankruptcy case because the debtor, the trustee, and an assignee of the trustee formed the contract so the parties could resolve a fraudulent transfer raised in the case. The existence of the bankruptcy case is critical because the claim would not exist but for Title 11. Moreover, it was a “core” proceeding because the debtor alleged that the trustee breached her contract not to sell estate assets, an estate created by the Bankruptcy Code.
Share on Facebook