Bankruptcy Judge Stuart Bernstein
Margaret Wu sought divorce from husband Phillip Wu in 2009. Phillip owns one-third of the shares in debtor Queen Elizabeth Realty Corp. (QERC). Brothers Jeffrey and Lewis own the remaining interests. QERC owns Manhattan realty leased to New Enterprise Realty LLC, controlled by Jeffrey, which in turn subleased the property to Hong Kong Supermarket Inc. (HKS) (also owned by Jeffrey) and Salon de Tops Inc. Pursuant to an ambiguous order of appointment receiver Fong took control of QERC’s property and ultimately sought HKS’s eviction, which was stayed by QERC’s July 17, 2013, Chapter 11 relief application. In addition to federally removing receiver Fong’s eviction proceeding, nonparty QERC—claiming to be a party in interest—removed those claims in Margaret’s divorce action seeking liquidation of QERC’s bankruptcy estate. Bankruptcy court remanded both adversary proceedings to state court. Discussing Judicial Law §1452(a) and 28 USC §1441(a) the bankruptcy court determined that QERC did not qualify as a “party” for removal purposes. The court concluded that the term “party” as used in 28 USC §1452(a) should be given its ordinary meaning and precludes non-parties from removing state court proceedings.
