Order | Filed: July 29, 2026
| Entered: July 29, 2026
In re: Kwok
Bankruptcy Withdrawal | Connecticut
Order on Motion to Withdraw Reference
ORDER denying without prejudice 1 Motion to Withdraw the Reference. Through the underlying adversary proceeding, and many others, the Trustee has alleged that the Debtor, through one or more of his alter ego shell companies, fraudulently transferred property to Defendant(s) either Pre-Petition, Post-Petition, or in some cases, both. As such, the Trustee seeks to claw back such purportedly fraudulent transfers for the benefit of the Estate, pursuant to Sections 544, 548, and/or 549 of the Bankruptcy Code.
In this case, Movant FFP (BVI) Limited asks the Court to immediately withdraw the reference in the underlying adversary proceeding, pursuant to 28 U.S.C. § 157(d), because: (1) following Stern v. Marshall, 564 U.S. 462 (2011), the Court lacks final adjudicative authority over the Trustee's fraudulent transfer claims; (2) the Bankruptcy Court cannot provide the jury trial to which Movant is entitled; and (3) the remaining factors set forth in Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion Pictures Corp.), 4 F.3d 1095 (2d Cir. 1993) favor withdrawal of the reference. The Trustee has objected, arguing, inter alia, that: (a) the non-Stern Orion factors do not support immediate withdrawal of the reference; and (2) the Motion may be denied even if, consistent with Stern, the Bankruptcy Court lacks final adjudicative authority over the Trustee's claims. The Court agrees with the Trustee.
As an initial matter, regarding any Post-Petition claim arising under Section 549, the Court agrees with the Trustee that such claim does not give rise to a right to a jury trial, see In re Belmonte, 551 B.R. 723, 729 (Bankr. E.D.N.Y. 2016), and finds Movant's argument to the contrary unpersuasive. Yet, as to the Trustee's Pre-Petition claim arising under Section 548, the Court concludes--and the Trustee does not appear to contest--that Movant is entitled to a jury trial on such claim. See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 56 (1989). Nevertheless, the Court observes that any such entitlement is not dispositive, insofar as "[c]ourts in this Circuit have held consistently that a party's entitlement to a jury trial alone is insufficient to compel immediate withdrawal of the reference." In re Enron Corp., No. 04-CV-509 (MBM), 2004 WL 2149124, at *4 (S.D.N.Y. Sept. 23, 2004). Moreover, aside from Movant's purported jury trial rights, the Court need not determine Orion's post-Stern threshold final judgment inquiry at this juncture, because it too is "not dispositive of a motion to withdraw a reference." See U.S. Bank, Natl Ass'n as Tr. for GSAMP Tr. 2006-NC1 Mortg. Pass-Through Certificates Series 2006-NC1 v. Osuji, No. 18-MC-821 (JMA), 2024 WL 1092682, at *3 (E.D.N.Y. Mar. 13, 2024) (acknowledging that "even when a bankruptcy court lacks authority to enter final judgment, 'this factor is not dispositive of a motion to withdraw a reference'") (citing In re Ne. Indus. Dev. Corp., 511 B.R. 51, 53 (S.D.N.Y. 2014) (collecting cases)). And in fact, the Court concludes, as it has in prior rulings, that taken together the remaining factors set forth in Orion do not support immediate withdrawal of the reference, given that: (a) doing so would result in tremendous, categorical inefficiencies, insofar as the Bankruptcy Court has already administered the underlying adversary proceeding; and (b) relatedly, the Bankruptcy Court has a profoundly greater understanding of the Debtor's underlying Chapter 11 case, to include numerous related adversary proceedings involving factual and legal issues similar to those presented here. See, e.g., In re Kwok, No. 3:24-MC-109, ECF No. 15 at 6-8; In re Kwok, No. 3:24-MC-107, ECF No. 12 at 6-9.
In light of the foregoing, the Court declines to immediately withdraw the reference, and the 1 Motion to Withdraw the Reference is DENIED without prejudice to a renewed Motion, as may be appropriate, to be filed when the Trustee's Pre-Petition fraudulent transfer claim is trial ready. If the underlying adversary proceeding is resolved through settlement or otherwise prior to the conclusion of all pre-trial proceedings, the parties are directed to promptly file a Notice in this case advising the Court of the same. It is so ordered. Signed by Judge Kari A. Dooley on July 29, 2026. (AS)