Issue link: https://mbozikis.ufcontent.com/i/1422521
9 recognition of foreign proceedings. 28 U.S.C. § 157(b)(2). Personal injury tort and wrongful death claims, on the other hand, are to be heard by the district court for the district in which the bankruptcy case is pending or the district court for the district in which the claim arose, as determined by the district court in the district in which the bankruptcy case is pending. 28 U.S.C. § 157(b)(5). These well-settled principles of bankruptcy jurisdiction were called into question by the U.S. Supreme Court in Stern v. Marshall, 564 U.S. 462 (2011). Stern held, in sum, that a bankruptcy court lacked the constitutional authority to enter a final judgment on a State law counterclaim that was unrelated to the bankruptcy case or a creditor's proof of claim. Although the holding in Stern appeared narrow in its application, bankruptcy courts were soon facing challenges to their jurisdiction and were forced to interpret Stern to address the limitations of a bankruptcy court's authority to finally resolve State law claims. Many of the challenges arose in fraudulent transfer actions that, although expressly deemed "core" by Congress under 28 U.S.C. § 157(b)(2)(H), are often asserted against non-creditors of the estate and, therefore, are arguably governed by Stern. This scenario presents a conundrum: in non- core matters, pursuant to 28 U.S.C. § 157(c), the bankruptcy court may only issue findings of fact and conclusions of law; however, a fraudulent transfer claim is a core matter that, prior to Stern, a bankruptcy court could finally adjudicate. Yet, under Stern, a bankruptcy court cannot issue a final judgment even on such a core claim. The bankruptcy court is therefore left without any constitutional or statutory basis to address the claim. This resulted, post-Stern, in scores of motions to withdraw the reference of fraudulent transfer and other avoidance claims to the district court. As would be expected, courts differed on how to resolve this dilemma, with some permitting the bankruptcy court to issue findings of fact and conclusions of law subject to district court de novo review, and others withdrawing the reference, holding that only the Article III district court could address those claims.