01-2683 In re Kontrick

Listen to this article

“[C]haracterization of these bankruptcy rules as jurisdictional would yield too rigid a result to achieve the goals of the bankruptcy statute. As the bankruptcy panel pointed out in Santos, there are, to be sure, some goals of bankruptcy relief that are promoted by expeditious and definitive resolution of the question of dischargeability. Indeed, among the goals of the rules in question is furtherance of the prompt administration of bankruptcy estates and protection of the ‘fresh start’ objective of the Code by allowing the debtor to enjoy finality and certainty of relief. See In re Santos, 112 B.R. at 1006. However, as the panel in Santos also pointedly noted, these goals are best fostered, not by a rigid jurisdictional approach, but by the exercise of equitable discretion in a manner consistent with the policies that animate the Bankruptcy Code.”

“[T]he overall statutory structure of the bankruptcy statute also provides support for the view that the rules are not jurisdictional. See In re Santos, 112 B.R. at 1005. The statutes granting jurisdiction to the bankruptcy and district courts over bankruptcy matters do not indicate that timeliness of objections to discharge is a jurisdictional predicate. See 28 U.S.C. secs. 157(b)(1), 1334. An ‘objection[ ] to discharge’ is a ‘core proceeding[ ]’ over which the bankruptcy court exercises jurisdiction. 28 U.S.C. sec. 157(b)(2)(J). Nowhere in the definition of core proceedings is the adjective ‘imely’ used to define a core proceeding. Thus, there is nothing within sec. 157(b) to indicate that a bankruptcy court is precluded from considering untimely objections to discharge. Matters of timeliness are, notably, present in other provisions. For instance, section 157(b)(3) states that ‘[t]he bankruptcy judge shall determine, on the judge’s own motion or on timely motion of a party, whether a proceeding is a core proceeding.’ 28 U.S.C. sec. 157(b)(3). Further, for a party to obtain de novo review in the district court of a bankruptcy court’s findings of fact and conclusions of law in a non-core proceeding, that party must ‘timely and specifically object[ ].’ 28 U.S.C. sec. 157(c)(1). These references to timeliness in sections other than the grants of jurisdiction support the view that timeliness is not a prerequisite to the bankruptcy court’s exercise of jurisdiction in a core proceeding such as Dr. Ryan’s objection to discharge.”

Affirmed.

Appeal from the United States District Court for the Northern District of Illinois, Leinenweber, J., Ripple, J.