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Bankruptcy: Restitution Agreement- Injunctive and Declaratory Relief- Bankruptcy Court Jurisdiction
Staff Report//October 12, 2018
Bankruptcy: Restitution Agreement- Injunctive and Declaratory Relief- Bankruptcy Court Jurisdiction
Staff Report//October 12, 2018
Debtor was fired or resigned from his employment with plaintiff-appellant after he used his position to misappropriate funds. Debtor and appellant executed a restitution agreement empowering an attorney-in-fact to collect debtor’s distributions and turn over to appellant. After debtor filed for bankruptcy, he purported to revoke the power of attorney. The bankruptcy court subsequently denied appellant’s request for declaratory and Injunctive relief to declare the power of attorney irrevocable
Where claim for declaratory and injunctive relief was not a core proceeding of bankruptcy action but was a state law breach-of-contract claim and had no effect on debtor’s bankruptcy estate, bankruptcy court erred in exercising jurisdiction over merits.
Judgment is reversed and remanded.
In re: Michael B. McDonald (MLW No. 72172/Case No 18-6017 – 7 pages) (U.S. Court of Appeals, 8th Circuit, Sanberg, U.S.B.J.) Appealed from U.S. Bankruptcy Court, Northern District of Iowa
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