Bavelis v. Doukas (In re Bavelis)

(Sixth Circuit Nov. 26, 2014)

The Sixth Circuit affirms the bankruptcy court’s disallowance of the creditor’s claim. The creditor filed a proof of claim in response to the individual chapter 11 debtor’s adversary proceeding against him. The proof of claim asserted a claim against the estate based on the debtor’s alleged violation of Florida securities laws. The creditor argued on appeal that the bankruptcy court did not have the authority to rule on his claim because it was a non-core issue. The Sixth Circuit disagrees, holding that the bankruptcy court’s ruling in the adversary proceeding was essentially a ruling on the allowance or disallowance of a claim against the estate, which is a core issue as set forth in 28 U.S.C. § 157(b)(2). Thus, the bankruptcy court properly ruled on the claim in the adversary proceeding. The Sixth Circuit also agreed with the bankruptcy court’s finding that the debtor had not violated Florida securities laws. Opinion below.

2014-11-26 – in re bavelis