On remand from the 4th Circuit, where Jason McDonald and MDC first raised the issue of subject matter jurisdiction, the bankruptcy court held that the actual debtor in this case held an ownership interest in MDC, such was, even under the broad “related to” jurisdiction, insufficient to allow the bankruptcy court to determine what assets were owned by that corporate entity. Otherwise:
Under such an expansive interpretation of “related to” jurisdiction, if a debtor owned a single share of a corporation, all litigation of that corporation, in whatever court around the globe, would be brought within the reach of “related to” jurisdiction of the bankruptcy court in which the debtor had filed its case. It is highly unlikely that “related to” jurisdiction of 28 U.S.C. § 1334(b) was intended
to cast such a broad net. Citing In re Mordini, 491 B.R. 567, 571 (Bankr. D. Colo. 2013)
While subject matter jurisdiction can be raised at any time, including by appellate courts, it seems the failure to do so until after both a bankruptcy court and district court have ruled substantively, is likely to leave those courts irritated.
For a copy of the opinion, please see: