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evidence that the TCW Claims were assigned for the sole purpose of manufacturing bankruptcy jurisdiction and therefore there is no violation of 28 U.S.C. § 1359 (prohibiting assignment of a claim for purposes of jurisdiction).
(4) Under Katchen, which the Second Circuit is required to follow until the Supreme Court overrules its own decision, Lytle does not apply here and the CBI Claims are not vacated in light of E&Y's right to a jury trial on the TCW Claims.
Facts: Engage, Inc. file for chapter 11 bankruptcy in 2003 and Ropes & Gray LLP ("R&G") argued that it was owed around $108,000, which was secured by an attorneys' lien under chapter 221, section 50 of the Massachusetts General Laws for legal services R&G had performed for the Debtor prepetition from around July 2002 through May 2003. The services R&G performed were primarily related to the prosecution of a patent. The Debtor sold its patents and patent applications both pre and post petition and agreed to reserve a portion of the proceeds (in the amount of the lien) pending a determination of whether it is allowed. The bankruptcy court disallowed R&G's request on the basis that the Massachusetts attorney's lien statute did not apply to patents and patent applications. The district court affirmed. Issues: Whether the Massachusetts attorney's lien statute applies to patent prosecution work, and, if so, whether the attorney's lien attaches to proceeds from the sale of issued patents or patent applications. Rules: The federal courts "may certify questions to the SJC [Massachusetts Supreme Judicial Court pursuant to its Rule 1:03]... where it finds no controlling precedent and where the questions may be determinative of the pending cause of action." Holding: Issue certified to the Massachusetts Supreme Judicial Court. Reasoning: The text of the statute and its statutory history are not so clear as to allow the court to make a determination one way or the other. Additionally, state courts have not been reasonably clear in deciding the issue. Lastly, the answer to the question really may hinge on policy judgments - which support either party - that are best left to the SJC and which will have implications far beyond the parties before the court here.
Facts: Soon after declaring chapter 11, the Debtors moved to abandon certain property, including real property located in Holyoke, Massachusetts (the "Holyoke Property"). After the court approved the abandonment of the Holyoke Property, Holyoke Gas filed a proof of claim in the amount of around $200,000 as a priority claim for unpaid utility charges (under Massachusetts law, such unpaid utility charges become real estate taxes owed by the fee owner of the real estate). Also, the city of Holyoke filed a proof of claim in the amount of around $1.5 million as a priority claim for real estate taxes that had been assessed prior to the abandonment of the Holyoke Property. The Debtors moved to disallow or reclassify the proofs of claim and argued that § 502(a) does not apply to abandoned property and that the claims be disallowed in their entirety under § 502(b)(3).
Issues: Whether the claims should be disallowed under § 502(a) or § 502(b)(3).
Rules: Where strict application of a statute would lead to an absurd result, "'a court's primary role is to effectuate the intent of Congress even if . . the statute instructs otherwise.'" "The legislative history sets forth a twofold purpose for § 502(b)(3). First, and most importantly, 'to prevent a windfall to mortgagees and other lienors who would unfairly benefit from the payment of property taxes that would otherwise remain charges on the property'... Second, 'to prevent injustice to unsecured creditors.'"
Holding: There is no basis to either disallow or reduce the Holyoke parties' proofs of claim.
Reasoning: The case the debtors cite for the proposition that § 502(a) does not apply once property
