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Bankruptcy Court May Lack Jurisdiction On Some Issues

Posted By admin || 7-Feb-2011

In the bankruptcy case of former Playboy Bunny Anna Nicole Smith, a.k.a. Vickie Lynn Marshall who married multimillionaire J. Howard Marshall II, a man 63 years her senior, the issue of whether or not a bankruptcy court has jurisdiction over certain issues in the case is being debated.

The issue at hand is whether or not the bankruptcy court had the right to rule on a claim that Marshall's youngest son, Pierce wielded undue influence to swindle Anna Nicole out of a gift or inheritance that she expected to receive from the millionaire. The bankruptcy court felt it had a say in the issue because the inheritance would have been part of the bankruptcy estate, making it a core issue. But on appeal it was ruled that the claim, while necessary, was not a core issue and therefore the bankruptcy court did not have the jurisdiction to rule on it.

The federal district court in California said that while a bankruptcy court can issue final judgments on core matters (matters intrinsically related to bankruptcy proceedings), Vickie Lynn's claim was not a core matter. Although they arose from the same transactions, their vastly different magnitude, legal theories and necessary proof resulted in their classification as non-core matters. Because they were non-core, the bankruptcy court was not authorized to issue findings of fact and conclusions of law, but was instead required to issue proposed findings and conclusions which would then be decided by the district court.

The Supreme Court is scheduled to hear this case and rule on exactly how much jurisdiction the bankruptcy court has over this matter. They plan to have made a decision by June.

Categories: Bankruptcy
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