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United States Court of Appeals for the Seventh Circuit
May 25, 2022, Argued; September 7, 2022, Decided
Nos. 21-2946 & 21-2954
[*517] Rovner, Circuit Judge. Joseph Sheehan, an Illinois resident, would like the bankruptcy court in Illinois to enforce that court's stay against his Irish creditors. Those creditors, who are residents of Ireland, seek to sell Sheehan's Irish property to recoup their loss on loans made in Ireland, and on which Sheehan defaulted in Ireland. The bankruptcy court determined it had no personal jurisdiction over the foreign defendants and granted their motions to dismiss. The [**2] district court on appeal affirmed the orders of the bankruptcy court, and we affirm that court's judgment.
Joseph Sheehan is a retired surgeon who emigrated from Ireland several decades ago and currently lives in Winfield, Illinois. In 2006, Sheehan obtained loans from an Irish bank to buy interest in Blackrock Hospital Limited, an Irish medical company (the "Blackrock Shares"), and also to purchase personal real estate located in Ballyheigue, Ireland (the "Ballyheigue property"). In 2008, he obtained additional loans to pay for more Blackrock Shares. Both loans were secured by the Blackrock Shares themselves. Sheehan defaulted on both loans in 2010. In 2014, defendant-appellee Breccia Unlimited Company ("Breccia"), an Irish entity that also owned shares in Blackrock Hospital Limited, acquired the loans—both the loans secured by the Blackrock Shares and the Irish bank's interest in the Ballyheigue property mortgage—and proceeded to take steps to foreclose on the underlying collateral. Breccia is a private unlimited company incorporated under the laws of Ireland and maintains its principal place of business in Dublin. Sheehan sued to prevent those foreclosure efforts in Irish courts, [**3] but in July 2019, an Irish appellate court found in Breccia's favor and gave the company authorization to enforce its security interest in the Blackrock Shares and the Ballyheigue property with the aid of an Irish receiver. The Irish Supreme Court declined to disturb that final judgment. Subsequently, in December 2019, Breccia registered the Blackrock Shares in its name and appointed a receiver, defendant-appellee Damien Murran, to take possession of the Ballyheigue property, secure it, market it, and sell it. Murran is an Irish citizen who resides in Ireland and is an employee of defendant-appellee, RSM Ireland Business Advisory Limited ("RSM Ireland"). RSM Ireland is an Ireland limited liability company.1 On March 5, 2020, [*518] Breccia appointed Murran as the receiver for the Ballyheigue Property as well. Murran accepted the receivership on March 23, 2020.
On March 12, 2020, Sheehan filed a petition for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Illinois. Under the rules of the United States Bankruptcy Code, Sheehan's bankruptcy filing triggered an automatic stay applicable to "any act to obtain possession of property of the estate or of property [**4] from the estate or to exercise control over property of the estate." 11 U.S.C. § 362 (a)(3). On the same day that Sheehan filed his bankruptcy petition, he notified the Irish receiver, Murran, that he had commenced bankruptcy proceedings, and that the automatic stay barred any efforts by the receiver to exercise control over the Blackrock Shares. Several days later, on March 18, he provided the same notice to Breccia, but this time noted that the stay applied not only to the Blackrock Shares, but also to "any other property owned by Dr. Sheehan." App. 80.2 Nevertheless, Breccia, having prevailed in the Irish courts, continued, through the receiver, to take the necessary steps toward sale of the collateral securing the loans on which Sheehan had defaulted. For example, on March 13, 2020, Mur-ran entered into a contract with defendant-appellee, Irish Agricultural Development Company Unlimited ("IADC") for the sale of the Blackrock Shares.3 Like the other two companies, IADC is incorporated in Ireland, maintains its principal place of business in Ireland, and has no operations in the United States.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
48 F.4th 513 *; 2022 U.S. App. LEXIS 25043 **
IN RE: JOSEPH C. SHEEHAN, Debtor.JOSEPH C. SHEEHAN, Plaintiff-Appellant, v. BRECCIA UNLIMITED COMPANY, et al., Defendants-Appellees.
Prior History: [**1] Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 1:20-cv-05282 & 1:20-cv-05283 — Andrea R. Wood, Judge.
Sheehan v. Breccia Unlimited Co., 2021 U.S. Dist. LEXIS 183172, 2021 WL 4355363 (N.D. Ill., Sept. 24, 2021)
personal jurisdiction, bankruptcy court, discovery, forum state, Shares, contacts, district court, defendants', receiver, motion to dismiss, minimum contact, defendant-appellee, purposefully, receivership, collateral, automatic stay, proceedings, resident, aiming, cases, loans, fictionally, liquidating, courts
Bankruptcy Law, Judicial Review, Standards of Review, Clear Error Review, Civil Procedure, Appeals, De Novo Review, De Novo Standard of Review, Jurisdiction, In Rem & Personal Jurisdiction, Constitutional Limits, Constitutional Law, Fundamental Rights, Procedural Due Process, Scope of Protection, In Personam Actions, Minimum Contacts, Due Process, Evidence, Burdens of Proof, Allocation, Automatic Stay, Scope of Stay, Claims Against Estate Property, Governments, Courts, Authority to Adjudicate, Long Arm Jurisdiction, Purposeful Availment, Foreseeability, Placement of Product in Commerce, Torts, Procedural Matters, Commencement & Prosecution, In Personam Jurisdiction, Abuse of Discretion, Discovery, Methods of Discovery, Foreign Discovery