In re Drexler
| Citation | 39 BR 18 |
| Decision Date | 06 April 1984 |
| Docket Number | Bankruptcy No. 84 B 10383 (PA). |
| Parties | In re William R. DREXLER, Debtor. |
| Court | United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York |
DECISION ON REQUEST FOR JURY TRIAL
On March 14, 1984 an involuntary Chapter 7 petition was filed against William R. Drexler. The petitioners are Michael H. Cockell in the capacity of underwriter for the G.N. Rouse Syndicate and as Lead Underwriter for all other underwriters at Lloyd's of London subscribing to contracts designated as B00021 and B00090 and Manning Beard Limited, a London insurance broker, whose principals are named as intermediaries in the two contracts. The petitioners state that the contracts designated as B00021 and B00090 enabled the coverholder, Frank Feit Associates,1 to underwrite and bind liability and physical damage insurance for amusement parks and carnivals on behalf of the underwriters. The petitioners allege that they are the holders of a claim, not contingent as to liability, in the amount of $335,000.00, plus interest, and a substantial additional claim not contingent as to liability but unliquidated as to amount. The claims are based on two judgments each dated June 13, 1983 issued by the United States District Court for the Southern District of New York in an action in which Mr. Drexler was a defendant, as were the three companies referred to in footnote 1.
On March 15, 1984 Mr. Drexler filed an answer to the petition and sought a jury trial. The answer, among other things, denies the existence of the contracts designated as B00021 and B00090; denies that either judgment is presently of any force or effect because, inter alia, the two judgments are on appeal, the judgments are default judgments, and the debtor has meritorious defenses and counterclaims, denies that the debtor has more than 12 creditors; and denies that the debtor is not generally paying his debts as they become due. It is apparent that the principal issues to be determined at the trial on the involuntary petition are those of the legal effect of the two judgments and the status and standing of the petitioners, and the application of the generally not paying debts as they become due test to the facts as they develop at trial.
The granting of a jury trial with respect to issues raised by the filing of an involuntary petition is discretionary with the bankruptcy court. The pertinent provision may be found at 28 U.S.C. § 1480 which provides as follows:
"(b) The bankruptcy court may order the issues arising under section 303 of Title 11 to be tried without a jury."
The Bankruptcy Rules, which became effective on August 1, 1983, provide in Rule 9015(b)(3) as follows:
This court denies Mr. Drexler's request for a jury trial. Although the statute sets forth no guidelines, the court is of the view that a careful review and balancing of the factors in a particular case must be made. The major issues are matters of law which must be determined by the court, not a jury. Nor does it appear that the matter turns on any significant credibility issues. This court is of the opinion that the issues which may properly be presented to the jury are insubstantial in comparison to the issues which must be decided by the court. Undertaking a jury trial in this matter is likely to prove time consuming and to delay its resolution.2
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