Peterson v. 610 W. 142 Owners Corp. (In re 610 W. 142 Owners Corp.)

Peterson v. 610 W. 142 Owners Corp. (In re 610 W. 142 Owners Corp.)

Opinion

OPINION AND ORDER

JOHN F. KEENAN, United States District Judge:

Before the Court are Defendants' motions to withdraw the reference to the Bankruptcy Court of two adversary proceedings and for the Court's abstention from and dismissal of those adversary proceedings under 28 U.S.C. § 1334(c)(1). For the reasons stated below, the Court grants the motions in part and denies the motions in part.

Background

These adversary proceedings arise out of events surrounding an eight alarm fire on February 7, 1994, which destroyed [*2]  the 60 unit cooperative apartment building at 610 West 142nd Street, New York, New York (the "Property") and rendered it uninhabitable. On September 23, 1994, 610 West 142 Owners Corp. (the "Debtor"), filed a voluntary Chapter 11 petition with the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). In the Local Rule 52 affidavit made part of the petition, the Debtor claimed that its Chapter 11 filing was directly attributable to the fire, which by rendering the Property uninhabitable, had deprived it of any income from any other source. Consequently, the Debtor was unable to pay its debts and expenses, including the Property's mortgage. On September 19, 1995, the Bankruptcy Court appointed Hal M. Hirsch as Chapter 11 Trustee.

A. The Peterson Adversary Proceeding

On May 17, 1995, John Peterson and over 50 other tenant shareholders of the Debtor brought an action naming as defendants (i) the Debtor, (ii) certain officers of the Debtor and members of the Debtor's board of directors, (iii) the property's managing agent, and (iv) the sponsor of the offering plan to convert the Property to cooperative ownership. In John Peterson,  [*3]   et al., v. 610 W. 142 Owners Corp., et al., Adv. Pro. No. 95-9110A, Plaintiffs allege that Defendants' negligence in maintaining the Property caused the fire and that Plaintiffs suffered personal injuries and property losses as a result. Plaintiffs also state a cause of action for breach of lease due to a failure to provide a safe and habitable premises, as well as causes of action for harassment and infliction of distress because Defendants allegedly did not take necessary action to restore Plaintiffs to their homes after the fire. Plaintiffs seek to recover damages for the personal injuries and property losses they allegedly suffered as a result of the fire and Defendants' purported subsequent failure to repair the building.

B. The Rivera Adversary Proceeding

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.