The opinion of the court was delivered by: Judge Graham
This matter is before the Court on the motion of Defendants Drydock Coal Company, Mark Oakley, Gregg Oakley, Timothy Oakley, John Oakley, and Margaret Galvin to withdraw the reference to the Bankruptcy Court. Defendants are seeking to withdraw an adversary proceeding filed by the trustee of the bankruptcy estate under the United States Bankruptcy Code for avoidance of a fraudulent conveyance.
For the reasons stated below, the motion to withdraw the reference is denied.
In 1981, the Jack V. Oakley Trust purchased 337.5 shares of stock of the Drydock Coal Company. The only other shareholders of Drydock Coal stock were Defendants Mark Oakley, Gregg Oakley, Timothy Oakley, John Oakley, and Margaret Galvin. The stock purchase was accompanied by a written agreement that has since been lost. Drydock and "the shareholders cannot find that agreement, and they cannot precisely remember its exact terms." See Compl., Ex. B.
On April 14, 2000, Jack V. Oakley, both personally and as trustee of the Jack V. Oakley Trust, borrowed $1 million from the Citizens Bank of Logan, Ohio. To secure the $1 million loan, Jack V. Oakley granted Citizens Bank a security interest in the 337.5 shares of Drydock.
On April 10, 2003, Drydock and its shareholders, including the Jack V. Oakley Trust, executed a restatement of the lost stock purchase agreement. The Restatement purports to replicate the terms of the original agreement as closely as possible. Among its provisions, the Restatement prohibits a shareholder from transferring, assigning, or encumbering any shares of Drydock during his lifetime. See Restatement ¶¶1-2.
Two months later, Jack V. Oakley filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code on June 20, 2003. The bankruptcy court later converted it to a Chapter 7 proceeding.
On June 10, 2005, the trustee of the bankruptcy estate, along with Citizens Bank, filed an adversary proceeding against Drydock and its shareholders. In the complaint, Plaintiffs ask for declaratory judgment that the Restatement's purported restrictions on transfer are of no effect and do not replace the original stock purchase agreement. The complaint also asserts four claims under the Bankruptcy Code for avoidance of a fraudulent conveyance. See 11 U.S.C. §544(b)(1), §§548(a)(1)(A) & (B). The complaint alleges that the Bankruptcy Code prohibits Jack V. Oakley's attempt, two months before filing for bankruptcy, to enter into a contract that would render void the security interest granted to Citizens Bank three years earlier.
Under 28 U.S.C. §157(d), "The district court may withdraw, in whole or in part, any case or proceeding referred under this section, on its own motion or on timely motion of any party, for cause shown."*fn1 While Congress did not define "cause," courts have identified a number of factors to consider when deciding whether cause exists: whether the claim or proceeding is core or non-core; judicial economy; promoting uniformity in the administration of bankruptcy law; the delay and costs to the parties; preventing forum shopping; and the presence of a jury demand. See In re Orion Pictures Corp., 4 F.3d 1095, 1101 (2d Cir. 1993); In re Parklane/Atlanta Joint Venture, 927 F.2d 532, 536 (11th Cir. 1991); In re Pruitt, 910 F.2d 1160, 1168 (3rd Cir. 1990); Holland America Ins. Co. v. ...