AY McDonald Industries Inc. v. McDonald

The Bankruptcy Appellate Panel vacated the bankruptcy court's decision concerning injunctive and declaratory relief, holding that the bankruptcy court lacked jurisdiction to entertain the claim at issue. In this case, the bankruptcy court held that a debt to AY was not dischargeable due to debtor's fraud and defalcation while he was a director at AY. The panel explained that the outcome of AY's claim for injunctive and declaratory relief could have no effect on debtor or the bankruptcy estate; the relief for the contract claim only affected AY; and the claim involved distributions from two spendthrift trusts, which were not property of the estate. Therefore, the contract claims for injunctive and declaratory relief were neither core proceedings nor non-core related to proceedings. View "AY McDonald Industries Inc. v. McDonald" on Justia Law