Bankruptcy — arbitration

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United States Court of Appeals For the Seventh Circuit

Civil

Bankruptcy — arbitration

Claims are not outside the bankruptcy court’s jurisdiction, even though they are subject to arbitration.

“On the merits, Wallis does not engage with the bankruptcy judge’s reasons for rejecting his claims, but instead argues that because the claims of the largest creditors were based on contracts that were subject to arbitration, they were outside the purview of the bankruptcy court and so that court lost jurisdiction over USA Baby. We cannot imagine why arbitration would destroy bankruptcy jurisdiction any more than lifting the automatic stay to permit the debtor to sue or be sued would. See, e.g., In re National Energy & Gas Transmission, Inc., 492 F.3d 297, 299 and n. 2 (4th Cir. 2007); In re Electric Machinery Enterprises, Inc., 479 F.3d 791, 796-97 (11th Cir. 2007). Anyway there was nothing to arbitrate, because no one disputed the amounts that USA Baby owed.”

3-28-12 Affirmed.

11-2018 & 11-2026 In re USA Baby, Inc.

Appeals from the United States District Court for the Northern District of Illinois, Lefkow, J., Posner, J.