In re: Wilshire Courtyard

This case concerned the California Franchise Tax Board's wish to assess $13 million in unpaid income taxes on the individual partners of a general partnership that owned the property at issue, the Wilshire Courtyard. At issue on appeal was whether the bankruptcy court had jurisdiction to reopen the bankruptcy proceeding where the partnership was reorganized into a limited liability company. The court concluded that the bankruptcy court had neither "arising under" nor "arising in" subject matter jurisdiction over the present dispute; the bankruptcy court did, however, have "related to" jurisdiction over the present dispute; and bankruptcy court jurisdiction did not violate the Tax Injunction Act, 28 U.S.C. 1341. Accordingly, the court reversed the bankruptcy appellate panel's judgment and remanded for further proceedings. View "In re: Wilshire Courtyard" on Justia Law