In re: Resorts International, Inc., Resorts International Financing, Inc., Griffin… v. Price Waterhouse & Co., Llp

PRECEDENTIAL
UNITED STATES
COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-1857
IN RE: RESORTS
INTERNATIONAL, INC.,
RESORTS INTERNATIONAL
FINANCING, INC.,
GRIFFIN RESORTS, INC.,
RESORTS HOLDING, INC.,
Debtors
J. LOUIS BINDER,
as Trustee of the Resorts
International, Inc. Litigation Trust
v.
PRICE WATERHOUSE & CO., LLP,
Appellant
On Appeal from the
United States District Court for the
District of New Jersey
D.C. Civil Action 02-cv-01333
(Honorable Dickinson R. Debevoise)
Argued October 29, 2003
Before: SCIRICA, Chief Judge,
NYGAARD and AMBRO,
Circuit Judges
(Filed June 22, 2004)
ALAN E. KRAUS, ESQUIRE (Argued)
Latham & Watkins
P.O. Box 10174
One Newark Center, 16th Floor
Newark, New Jersey 07101
Attorney for Appellant
DAVID H. PIKUS, ESQUIRE (Argued)
Bressler, Amery & Ross, P.C.
325 Columbia Turnpike
Florham Park, New Jersey 07932
Attorney for Appellee,
J. Louis Binder, as Trustee
of the Resorts International, Inc.
Litigation Trust
OPINION OF THE COURT
SCIRICA, Chief Judge.
This appeal addresses the scope of
“related to” jurisdiction of the bankruptcy
court for post-confirmation claims brought
on behalf of a litigation trust against an
accounting firm. The trustee sued the
accounting firm for p rofessional
negligence and breach of contract for work
it performed for the trust. The Bankruptcy
Court declined to hear the claim, finding it
lacked subject matter jurisdiction. The
District Court disagreed and reversed. We
will reverse the order of the District Court
and remand for proceedings consistent
with this opinion.
I.
A. Overview of Affected Parties
The underlying matter in this appeal
is an accounting malpractice action. J.

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Louis Binder, the Trustee for the Resorts
International, Inc. Litigation Trust, brought
a claim in excess of $500,000 against
accounting firm Price Waterhouse & Co.
for professional malpractice and breach of
contract in connection with accounting
services performed for the Litigation
Trust. The Trustee’s principal allegation is
that Price Waterhouse erroneously
reported in its audit that accrued interest
on Litigation Trust accounts belonged to
the debtor rather than to the Litigation
Trust. Underlying this claim was a suit
between the Litigation Trust and the
debtor, Resorts International, Inc., over
entitlement to the accrued interest.
According to the T rustee , Price
Waterhouse’s erroneous reports were
relied on by the bankruptcy court to the
Litigation Trust’s detriment.
The debtor, Resorts International,
Inc., is not a party to the malpractice
action. The debtor assigned to the
Litigation Trustee all its rights, title, and
interest in the Litigation Trust’s primary
asset, its claim against Donald Trump and
affiliated entities. Because the Bankruptcy
Court confirmed the Reorganization Plan,
the debtor’s estate no longer exists.
Nonetheless, the Trustee alleges the
debtor’s estate would still be affected by
the malpractice suit because the Litigation
Trust is effectively a continuation of the
bankruptcy estate. Furthermore, contends
the Trustee, any recovery obtained in this
action would necessarily become Trust
assets, available to cover any liability that
might arise in the accrued interest lawsuit
or available for possible distribution to the
beneficiaries of the Litigation Trust, who
were former creditors of the debtor’s
estate.
Price Waterhouse responds that the
Litigation Trust, a legally distinct entity, is
not a continuation of the bankruptcy estate
for jurisdictional purposes. Moreover,
Price Waterhouse contends the debtor is
only tangentially affected by this
malpractice action after it assigned away
its interests in the litigation claims, and the
Litigation Trust beneficiaries traded their
creditor status to attain rights to the Trust’s
assets.
B. Facts
On November 12, 1989, creditors of
Resorts International, Inc.1 and Resorts
International Financing, Inc. filed against
t h e m C h a p t e r 1 1 i n v o l u n t a r y
reorganization petitions in the United
States Bankruptcy Court for the District of
New Jersey. On December 22, 1989,
Griffin Resorts and Griffin Resorts
Holding, Inc., affiliates of Resorts
International, filed separate voluntary
petitions under Chapter 11. All of the
cases were consolidated.
On August 28, 1990, the
Bankruptcy Court issued an Order
confirming the Second Amended Joint
Plan of Reorganization. On September 17,
1Resorts International, Inc. changed its
name on June 30, 1995, to Griffin Gaming
& Entertainment, Inc. For sake of clarity,
we will continue to refer to it as Resorts
International, Inc.

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1990, the parties entered into a Final Plan
and Litigation Trust Agreement. The Final
Plan created a Litigation Trust for the
benefit of certain creditors. Section
7.10(a) of the Plan provided: “Litigation
Trustee shall retain and preserve the
Litigation Claims for enforcement, as
representative of and successor to the
Reorganizing Entities in accordance with
Bankruptcy Code §§ 1123(b)(3)(B) and
1145(a).” The beneficial interests in the
Litigation Trust were divided into ten
million Litigation Trust Units and
allocated to certain creditors, the
Unitholders,2 under a formula set forth in
section 7.10(b) of the Plan. Under section
7.10(d), each Unitholder was entitled to a
pro rata share of any distribution from the
Litigation Trust.
The assets assigned to the Litigation
Trust were claims originally held by the
debtor, Resorts International, Inc., against
Donald J. Trump and affiliated entities,
arising from Trump’s 1988 leveraged
buyout of the Taj Mahal Resort. Upon
formation of the Litigation Trust, the
litigation claims were assigned to the
Trustee. The Plan authorized the Trustee
to prosecute the claims against the Trump
entities. The Plan and Litigation Trust
Agreement also required the debtor to
provide an irrevocable letter of credit in
the amount of $5,000,000 to the Litigation
Trust to enable it to pursue the litigation
claims.
On May 28, 1991, the Trustee
entered into an agreement with Trump and
his affiliates and the debtor settling the
litigation claims on behalf of the Trust’s
Unitholders in the amount of $12,000,000,
subject to approval by the Unitholders.
Approval was solicited and received by
July 15, 1991. The Settlement Agreement
proceeds became assets of the Litigation
Trust.
The Litigation Trust Agreement
contained several provisions affecting
Price Waterhouse, though it was never
named in the document. Section 3.2 of the
Litigation Trust Agreement provided that
“[t]he Trustee shall retain an independent
public accounting firm to audit the
financial books and records of the Trust
and to perform such other reviews or
audits as may be appropriate in the
Trustee’s sole discretion,” and that the
Trustee “shall pay such accounting firm
reasonable compensation from the Trust
Assets” for its services. Section 5.5 of the
Litigation Trust Agreement required the
Trustee to report to all Unitholders the
details of the Trust’s transactions and
disbursements at least annually and to have
these reports “audited by the independent
accounting firm retained by the Trustee . .
. not less frequently than annually.”
On April 17, 1990, representatives
of the Litigation Trust’s Unitholders
elected Kenneth R. Feinberg as Litigation
Trustee. On November 1, 1990, after
2The Unitholders were the holders of
allowed Class 3B Claims, allowed Resorts
International, Inc. Debenture Claims, and
allowed Other Class 3C Claims as defined
by the Plan. In re Resorts Int’l, Inc., 199
B.R. 113, 115 n.2 (Bankr. D.N.J. 1996).

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confirmation of the Plan, the Trustee
retained Price Waterhouse to provide
auditing and tax-related services to the
Litigation Trust. Subsequently, under an
order dated August 17, 1994, J. Louis
Binder replaced Feinberg as Trustee.
Shortly thereafter, the Trustee terminated
the services of Price Waterhouse. On
April 15, 1997, the Trustee filed this
adversary proceeding against Price
Waterhouse alleging pro f e s s ional
negligence and breach of contract.
The Trustee allege d Price
Waterhouse committed professional
malpractice by making several errors in its
accounting and tax advice. His principal
allegation is that Price Waterhouse
erroneously reported in its audit reports
that certain accrued interest on the
Litigation Trust accounts belonged to the
debtor rather than to the Trust. The
accrued interest was the subject of a
dispute between the debtor and the
Litigation Trust—a dispute the Bankruptcy
Court decided in part in favor of the debtor
and in part in favor of the Trust. See In re
Resorts Int’l, 199 B.R. at 118-19.3 The
Trustee alleged that to the extent the
Bankruptcy Court approved the debtor’s
claim to the interest, it relied on Price
Waterhouse’s audit reports, so that its
“errors” injured the Litigation Trust. The
Trustee alleged that even though the Trust
partially prevailed in the interest dispute,
P r i c e W a t e r h o u s e ’ s e r r o n e o u s
characterization caused the Trust to incur
3The Bankruptcy Court allocated the
interest between the Litigation Trust and
the debtor in the following manner:
Interest income earned on
the Expense Account for the
period beginning on or
about October 3, 1990
through May 28, 1991
belongs to Resorts. Upon
settlement of the Litigation
Claims, the balance of the
$ 5 million deposit became a
“Trust Asset” as defined by
Article II of the Litigation
Trust Agreement, and any
interest earned on such
“Trust Asset” also became a
“Trust Asset.” Accordingly,
the Litigation Trust is
entitled to interest earned on
the balance of the initial $ 5
million deposit for the
period beginning May 28,
1991 through the present
date. To the extent that the
Settlement Agreement dated
May 28, 1991 between the
former Litigation Trustee
F e i n berg and Resorts
provided for interest income
earned on the Expense
Account for the period
March 16, 1991 through
May 28, 1991 to be paid to
Resorts, the Litigation
Trus t’s entitlemen t to
interest shall accrue from
the post-settlement period
following May 28, 1991.
In re Resorts Int’l, 199 B.R. at 125.

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unnecessary litigation costs in defending
its entitlement. The Trustee also alleged
certain errors in tax advice and auditing
provided to the Trustee and faulted Price
Waterhouse for failing to review and
interpret certain Litigation Trust
documents. The Trustee sought damages
and disgorgement of fees in excess of
$500,000.
C. Procedural History
On April 15, 1997, almost seven
years after Reo rgan ization Pla n
confirmation, the Trustee filed the
underlying professional malpractice action
against Price Waterhouse in the United
States Bankruptcy Court for the District of
New Jersey. On January 4, 2002, the
Bank r u p t c y C o urt gra nted P rice
Waterhouse’s motion to dismiss for lack of
subject matter jurisdiction finding there
was no “related to” or “core” jurisdiction.
Binder v. Price Waterhouse & Co. (In re
Resorts Int’l, Inc.), Adv. No. 97-2283, slip
op. at 22, 30, 35 (Bankr. D.N.J. Jan. 4,
2002). Disagreeing with the Trustee that
this was a “core” proceeding, the
Bankruptcy Court characterized the matter
as a post-confirmation dispute between
two non-debtors involving state law claims
that did not affect the “administration of
the estate, property of the estate, or
liquidation of assets of the estate.” Id. at
21. Although finding its post-confirmation
jurisdiction to be “extremely limited,” the
Bankruptcy Court recognized that it
retained post-confirmation jurisdiction
over disputes that potentially “affect the
s u c c e s s f u l i m p l e m e n t a t io n a n d
consummation of the plan.” Id. at 28
(internal quotations omitted). But the
Bankruptcy Court rejected “related to”
jurisdiction because the claims could not
have had any “conceivable effect on the
administration of the estate,” and because
the dispute would not significantly affect
consummation of the Reorganization Plan.
See id. at 29-32. It also found that none of
the Plan’s retention provisions were
intended to serve as a basis for jurisdiction
over the Litigation Trust and third-party
accountants; nor could the Plan language
create jurisdiction greater than that granted
by Congress. Id. at 13-14.
The Trustee appealed to the District
Court, which reversed and remanded.
Binder v. Price Waterhouse & Co. (In re
Resorts Int’l, Inc.), No. 02-1333, slip op. at
19 (D.N.J. Dec. 18, 2002). The District
Court held “the terms on which the
Litigation Trust was created and its
practical role in the Plan lead to the
conclusion that claims arising from
professional misconduct in the Trust’s
affairs are sufficiently related to the
bankruptcy case to be within the
jurisdiction of the Bankruptcy Court.” Id.
at 7. The Court explained:
[C]onfirmation did not
terminate the estate with
respect to the property
vested in the Litigation
Trus t; and th e Trust
r e p r e se n t e d a p a r t i a l
continuation of the estate.
C o n s e q u e n t l y , t h e
j u r i s d i c t i o n o f t h e
bankru ptcy court over
proceedings arising from the

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affairs of the Litigation
Trust is not substantially
d i f f e r e n t f r o m i t s
jurisdiction over similar
matters pre-confirmation,
and it should have the power
t o h e a r c l a i m s o f
professional malpractice in
the administration of the
Trust.
Id. at 12. But in light of the “uncertainties
surrounding the exercise of Bankruptcy
Court jurisdiction post-confirmation,” the
District Court certified its ruling for
immediate appeal under 28 U.S.C. §
1292(b). Id. at 17-18. Price Waterhouse
petitioned for leave to appeal. The Trustee
chose not to contest the petition. We
granted leave to appeal.
Price Waterhouse claims the
District Court erred in upholding “related
to” bankruptcy jurisdiction because there
can be no conceivable effect on the
administration of the estate. Furthermore,
it contends, the District Court’s judgment,
if permitted to stand, threatens unending
jurisdiction in the Bankruptcy Court well
after dissolution of the debtor’s estate.
The Trustee counters that this professional
malpractice cause of action involves
parties, assets, and issues central to the
Reorganization Plan and is “related to” the
bankruptcy, especially given the sweeping
jurisdictional retention provisions in the
Plan and Litigation Trust Agreement.
The jurisdiction of the Bankruptcy
Court is at issue. The District Court had
jurisdiction to review the Bankruptcy
Court’s order under 28 U.S.C. § 158. We
have jurisdiction under 28 U.S.C. §
1292(b). Our review of the District
Court’s order on jurisdiction is de novo.
Resolution Trust Corp. v. Swedeland Dev.
Group (In re Swedeland Dev. Group), 16
F.3d 552, 559 (3d Cir. 1994).4
II.
Both the Reorganization Plan and
Litigation Trust Agreement contain
retention of jurisdiction provisions.
Article XI of the Plan provides in part:
The Bankruptcy Court will
retain jurisdiction of the
Reorganizing Cases for the
following purposes: . . . (c)
T o e n s u r e t h a t t h e
distribution of Holders of
Claims and Interests are
[sic] accomplished as
provided herein; . . . (h) To
hear and determine disputes
arising in connection with
t h e P l a n o r i t s
implementation including
disputes arising under
agreements, documents or
instrument executed in
connection with this Plan; .
. . (i) To construe and to
take any action to enforce
4We agree with the District Court that
the challenge is a facial attack regarding an
issue of law rather than a factual attack
and accordingly will assume the truth of
the allegations in the Complaint. See
Binder, No. 02-1333, slip op. at 7-8.

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the Plan and issue such
orders as may be necessary
for the implementation,
e x e c u t i o n , a n d
consummation of the Plan; .
. . (o) To hear and determine
any other matters not
inconsistent with Chapter 11
of the Bankruptcy Code.
Article VIII of the Litigation Trust
Agreement provides:
The Bankruptcy Court shall
retain exclusive jurisdiction
over the Litigation Claims
and Counterclaims, the
Trust, the Trustee, and the
Trust Assets, as provided for
in the Plan, including,
without limitation, the
d e t e r m i n at i o n o f a l l
controversies and disputes
a r i si n g u n d e r o r i n
connection with this Trust
Agreement.
The Trustee contends these
provisions confer bankruptcy court
jurisdiction over this dispute because the
Litigation Trust Agreement falls within the
definition of agreements, documents, or
instruments executed in connection with
the Plan. Furthermore, the Trustee
contends the dispute involves the
performance of professionals whose
retention was mandated and whose duties
were specified by the Litigation Trust
Agreement. The Trustee stresses that,
under the Agreement, the Bankruptcy
Court’s retention over any dispute
according to the Agreement was “not only
comprehensive it was exclusive.”
Appellee’s Br. at 9 (emphasis in original).
Retention of jurisdiction provisions
will be given effect, assuming there is
bankruptcy court jurisdiction. But neither
the bankruptcy court nor the parties can
write their own jurisdictional ticket.
Subject matter jurisdiction “cannot be
conferred by consent” of the parties.
Coffin v. Malvern Fed. Sav. Bank, 90 F.3d
851, 854 (3d Cir. 1996). Where a court
lacks subject matter jurisdiction over a
dispute, the parties cannot create it by
a g r e e m e n t e v e n i n a p l a n of
reorganization. In re Continental Airlines,
Inc., 236 B.R. 318, 323 (Bankr. D. Del.
1999), aff’d, 2000 WL 1425751 (D. Del.
September 12, 2000), aff’d, 279 F.3d 226
(3rd Cir. 2002). Similarly, if a court lacks
jurisdiction over a dispute, it cannot create
that jurisdiction by simply stating it has
jurisdiction in a confirmation or other
order. Id.; accord United States Trustee v.
Gryphon at the Stone Mansion, 216 B.R.
764, 769 (W.D. Pa. 1997) (“A retention of
jurisdiction provision within a confirmed
plan does not grant a bankruptcy court
jurisdiction.”), aff’d, 166 F.3d 552 (3d Cir.
1999). Bankruptcy courts can only act in
proceedings within their jurisdiction.
Donaldson v. Bernstein, 104 F.3d 547, 552
(3d Cir. 1997). If there is no jurisdiction
under 28 U.S.C. § 1334 or 28 U.S.C. §
157, retention of jurisdiction provisions in
a plan of reorganization or trust agreement
are fundamentally irrelevant. But if there
is jurisdiction, we will give effect to
retention of jurisdiction provisions.

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Consequently, we will examine whether
this dispute falls within the Bankruptcy
Court’s subject matter jurisdiction.
III.
Congress has vested “limited
authority” in bankruptcy courts. Bd. of
Governors v. MCorp Fin., Inc., 502 U.S.
32, 40 (1991). Bankruptcy courts fall
outside of the constitutional authority of
Article III and derive their authority from
federal statutes. See N. Pipeline Constr.
Co. v. Marathon Pipe Line Co., 458 U.S.
50, 60-87 (1982) (plurality opinion).
There are significant restrictions on what
functions can be constitutionally delegated
to these courts. See id. at 63-87. “[T]he
source of the bankruptcy court’s subject
matter jurisdiction is neither the
Bankruptcy Code nor the express terms of
the Plan. The source of the bankruptcy
court’s jurisdiction is 28 U.S.C. §§ 1334
and 157.” United States Brass Corp. v.
Travelers Ins. Group, Inc. (In re United
States Brass Corp.), 301 F.3d 296, 303
(5th Cir. 2002).
28 U.S.C. § 1334 grants jurisdiction
over bankruptcy cases and proceedings to
the district court: the district courts “shall
have original and exclusive jurisdiction of
all cases under title 11,” and “original but
not exclusive jurisdiction of all civil
proceedings arising under title 11, or
arising in or related to cases under title
11.” Id. at (a)-(b). Procedurally, a district
court may refer all cases and proceedings
that fall within this section to the
bankruptcy court. 28 U.S.C. § 157(a)
provides: “Each district court may provide
that any or all cases under title 11 and any
or all proceedings arising under title 11 or
arising in or related to a case under title 11
shall be referred to the bankruptcy judges
for the district.” Id. The district courts’
power to refer is discretionary, but courts
“routinely refer” most bankruptcy cases to
the bankruptcy court. Torkelsen v. Maggio
(In re Guild & Gallery Plus, Inc.), 72 F.3d
1171, 1175 (3d Cir. 1996).
Bankruptcy court jurisdiction
potentially extends to four types of title 11
matters, pending referral from the district
court: “‘(1) cases under title 11, (2)
proceeding arising under title 11, (3)
proceedings arising in a case under title
11, and (4) proceedings related to a case
under title 11.’” In re Guild & Gallery
Plus, 72 F.3d at 1175 (quoting In re
Marcus Hook Dev. Park, Inc., 943 F.2d
261, 264 (3d Cir. 1991)). Cases under title
11, proceedings arising under title 11, and
proceedings arising in a case under title 11
are referred to as “core” proceedings;
whereas proceedings “related to” a case
under title 11 are referred to as “non-core”
proceedings. See 1 Collier on Bankruptcy,
P3.02[2], at 3-35 (15th ed. rev. 2003).
Congress vested the bankruptcy courts
with full adjudicative power with regard to
“core” proceedings, subject to appellate
review by the district courts. 28 U.S.C. §§
157(b)(1), 158(a), (c). At the same time, it
provided that, for “non-core” proceedings
that are otherwise related to a case under
title 11, the bankruptcy court “shall submit
proposed findings of fact and conclusions
of law to the district court” subject to de

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novo review by that court. 28 U.S.C. §
157(c)(1).
A. Core Proceedings
28 U.S.C. § 157(b)(1) provides that
“[b]ankruptcy judges may hear and
determine all cases under title 11 and all
core proceedings arising under title 11, or
arising in a case under title 11, referred
under subsection (a) of this section, and
may enter appropriate orders and
judgments, subject to review under section
158 of this title.” Id. 28 U.S.C. §
157(b)(2) provides a non-exhaustive list of
examples of core proceedings such as
“matters concerning the administration of
the estate,” “orders to turn over property of
the estate,” or “other proceedings affecting
the liquidation of the assets of the estate or
the adjustment of the debtor-creditor or the
equity security holder relationship, except
personal injury tort or wrongful death
claims.” Id.5 We have held that a core
5The full list of examples of core
proceedings follows:
(A) matters concerning the
administration of the estate;
( B ) a l l o w a n c e o r
disallowance of claims
against the estate or
exemptions from property of
the estate, and estimation of
claims or interests for the
purposes of confirming a
plan under chapter 11, 12, or
13 of title 11 but not the
liquidation or estimation of
contingent or unliquidated
personal injury tort or
wrongful death claim s
against the estate for
purposes of distribution in a
case under title 11; (C)
counterclaims by the estate
against persons filing claims
against the estate; (D) orders
in respect to obtaining
credit; (E) orders to turn
over property of the estate;
( F ) p r o c e e d i n g s t o
determine, avoid, or recover
preferences; (G) motions to
terminate, annul, or modify
the automatic stay; (H)
proceedings to determine,
avoid, or recover fraudulent
c o n v e y a n c e s ; ( I )
determinations as to the
dischargeability of particular
debts; (J) objections to
d i s c h a r g e s ; ( K )
determinations of th e
validity, extent, or priority
of liens; (L) confirmations
of plans; (M ) orders
approving the use or lease of
property, including the use
of cash collateral; (N) orders
approving the sale of
property other than property
resulting f ro m claim s
brought by the estate against
persons who have not filed
claims against the estate;
and (O) other proceedings
affecting the liquidation of

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proceeding under section 157 is one that
“‘invokes a substantive right provided by
title 11’” or one that “‘by its nature, could
arise only in the context of a bankruptcy
case.’” In re Guild & Gallery Plus, 72
F.3d at 1178 (quoting In re Marcus Hook,
943 F.2d at 267).
The Trustee argues this matter
qualifies as a “core” proceeding, relying
on Southmark Corp. v. Coopers &
Lybrand (In re Southmark Corp.), 163
F.3d 925 (5th Cir. 1999). In Southmark,
the court concluded that a debtor’s suit
against an accounting firm was a core
proceeding in bankruptcy, observing that
the bankruptcy court must be able to
ensure “that court-approved managers of
the debtor’s estate are performing their
work cons cie n t i o u sl y, a nd cost-
effectively.” Id. at 931. The court also
noted that supervising court-appointed
professionals “bears directly on the
distribution of the debtor’s estate. If the
estate is not marshaled and liquidated or
reorganized expeditiously, there will be far
less money available to pay creditors’
claims.” Id.
Notwithstanding the Trustee’s
arguments, it is difficult to see how this
malpractice matter could be considered a
“core” proceeding. It is not a proceeding
that invokes a substantive right provided
by title 11 or a proceeding that, by its
nature, could arise only in the context of a
bankruptcy case. In re Guild and Gallery
Plus, 72 F.3d at 1178.
Unlike in Southmark, this claim
arose post-plan confirmation. It does not
directly affect the debtor or the liquidation
of the estate’s assets. Furthermore, the
accounting firm’s alleged malpractice in
Southmark implicated the integrity of the
entire bankruptcy process. Southmark’s
bankruptcy arose out of its involvement in
Drexel Burnham Lambert, Inc.’s ill-fated
junk bond investments. Southmark, 163
F.3d at 927-28. Southmark sought the
appointment of an accounting firm to
provide an objective, independent
assessment of potential legal claims
against third-parties. Id. Unbeknownst to
Southmark, Drexel was one of the
accounting firm’s largest clients. Id. at
927-28. According to Southmark, the
accounting firm committed malpractice by
failing to satisfactorily investigate
potential claims against Drexel. Id.
Southmark alleged the accounting firm’s
breach of its court-appointed fiduciary
duty prevented the estate from recovering
from Drexel. Id. at 928. The accounting
firms’s failure to investigate Drexel
implicated the core of the bankruptcy
process. Its alleged malpractice was
inseparable from the bankruptcy context.
Here, Price W aterho use’s a lleged
malpractice, erroneously reporting that
certain accrued interest belonged to one
entity rather than to another and
the assets of the estate or the
adjustment of the debtor-
creditor or the equity
security holder relationship,
except personal injury tort
or wrongful death claims.
28 U.S.C. § 157(b)(2).

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committing other errors in auditing and tax
advice, even if true, is not a proceeding
that could arise only in the bankruptcy
context.
Regardless, we need not resolve
whether this is a “core” proceeding for
subject matter jurisdictional purposes
because “[w]hether a particular proceeding
is core represents a question wholly
separate from that of subject-matter
jurisdiction.” In re Marcus Hook, 943
F.2d at 266. Under 28 U.S.C. § 157, a
bankruptcy court might have jurisdiction
over a proceeding but still might not be
able to enter final judgments and orders.
Id. Non-core “related to” jurisdiction is
the broadest of the potential paths to
bankruptcy jurisdiction, so we need only
determine whether a matter is at least
“related to” the bankruptcy. Donaldson,
104 F.3d at 552.
B. Non-Core “Related To” Proceedings
1. The Pacor Test
With “related to” jurisdiction,
Congress intended to grant bankruptcy
courts “comprehensive jurisdiction” so
that they could “‘deal efficiently and
expeditiously’” with matters connected
with the bankruptcy estate. Celotex Corp.
v. Edwards, 514 U.S. 300, 308 (1995)
(quoting Pacor, Inc. v. Higgins, 743 F.2d
984, 994 (3d Cir. 1984)). Nonetheless, a
bankruptcy court’s “related to” jurisdiction
“cannot be limitless.” Id. We set forth the
seminal test for determining the
boundaries of “related to” jurisdiction in
Pacor, 743 F.2d at 994.6
Under Pacor, bankruptcy courts
have jurisdiction to hear a proceeding if
“the outcome of that proceeding could
conceivably have any effect on the estate
being administered in bankruptcy.” Id. In
In re Marcus Hook, 943 F.2d 261, we
emphasized that a key word in this test is
“conceivable” and that “[c]ertainty, or
even likelihood, is not a requirement.” Id.
at 264. In Pacor, we observed: “[T]he
proceeding need not necessarily be against
the debtor or against the debtor’s property.
An action is related to bankruptcy if the
outcome could alter the debtor’s rights,
liabilities, options, or freedom of action
(either positively or negatively) and which
in any way impacts upon the handling and
administration of the bankrupt estate.”
743 F.2d at 994. The Supreme Court has
explained that the critical component of
the Pacor test is that “bankruptcy courts
6The Supreme Court effectively has
overruled Pacor with respect to its holding
that the prohibition against review of a
remand order in 28 U.S.C. § 1447(d) is not
applicable in a bankruptcy case. See
Things Remembered, Inc. v. Petrarca, 516
U.S. 124 (1995). But Things Remembered
does not disturb the authority of Pacor on
the points for which we cite it. In fact, the
Pacor test “has been enormously
influential” as a “cogent analytical
framework” relied upon by our sister
circuits more than any other case in this
area of the law. In re Guild & Gallery
Plus, 72 F.3d at 1181.

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12
have no jurisdiction over proceedings that
have no effect on the estate of the debtor.”
Celotex, 514 U.S. at 308 n.6.
2. T h e P o s t - C o n f i r m a t i o n
Context of the “Related To”
Inquiry
As noted, Pacor and its progeny
provide the analytical framework for
determining “related to” jurisdiction. But
most of the cases decided under Pacor do
not arise post-confirmation or even after
the creation of a litigation trust. Litigation
trusts, which serve a valid purpose in the
bankruptcy process, may continue long
after a reorganization plan has been
confirmed and the debtor has emerged
from bankruptcy. And yet bankruptcy
jurisdiction may still obtain if there is
sufficient connection to the bankruptcy.
The post-confirmation context of
this dispute affects our “related to” inquiry
because bankruptcy court jurisdiction
“must be confined within appropriate
limits and does not extend indefinitely,
particularly after the confirmation of a
plan and the closing of a case.”
Donaldson, 104 F.3d at 553.7 After
confirmation of a reorganization plan,
retention of bankruptcy jurisdiction may be
problematic. See Bank of La. v. Craig’s
Stores of Tex., Inc. (In re Craig’s Stores of
Tex., Inc.), 266 F.3d 388, 391 (5th Cir.
2001); In re Fairfield Cmtys., Inc., 142
F.3d 1093, 1095-96 (8th Cir. 1998). This
is so because, under traditional Pacor
analysis, bankruptcy jurisdiction will not
extend to a dispute between non-debtors
unless the dispute creates “the logical
possibility that the estate will be affected.”
In re Federal-Mogul Global, Inc., 300
F.3d 368, 380 (3d Cir. 2002) (internal
quotations omitted), cert. denied 537 U.S.
1148 (2003). At the most literal level, it is
impossible for the bankrupt debtor’s estate
to be affected by a post-confirmation
dispute because the debtor’s estate ceases
to exist once confirmation has occurred.
See In re Fairfield Cmtys., 142 F.3d at
1095 (holding that once a bankrupt
debtor’s plan has been confirmed the
debtor’s estate ceases to exist). Unless
otherwise provided by the plan or order
confirming the plan, “the confirmation of
7The District Court recognized that
“special considerations dictate that the
application of the Pacor test provides
jurisdiction over a narrower range of cases
post-confirmation than pre-confirmation.”
Binder, No. 02-1333, slip op. at 10. Other
courts have also recognized how
c o n f i r m a ti o n a f f e c t s b a n k r u p t c y
jurisdiction, though they have not
specifically done so in cases involving
litigation trusts. See H & L Developers v.
Arvida/JMB Partners (In re H & L
Developers), 178 B.R. 71, 76 (Bankr. E.D.
Pa. 1994) (“[O]nce a plan has been
confirmed, the court’s jurisdiction begins
to weaken.”) (internal quotations omitted);
Eastland Partners Ltd. v. Brown (In re
Eastland Partners Ltd.), 199 B.R. 917,
919-20 (Bankr. E.D. Mich. 1996)
(“Following confirmation of a chapter 11
debtor’s plan, a bankruptcy court has a
fairly narrow jurisdiction.”).

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13
a plan vests all of the property of the
estate” in the reorganized debtor. 11
U.S.C. § 1141(b). See also NVF Co. v.
New Castle County, 276 B.R. 340, 348 (D.
Del. 2002) (holding that the confirmation
of a plan revests the estate’s property in
the reorganized debtor, and accordingly,
the bankruptcy estate “no longer existed”),
aff’d 2003 WL 328428 (3d Cir. Jan. 21,
2003).
But courts do not usually apply
Pacor’s “effect on the bankruptcy estate”
test so literally as to entirely bar post-
confirmation bankruptcy jurisdiction. As
the District Court correctly noted, though
the scope of bankruptcy court jurisdiction
diminishes with plan confirmation,
bankruptcy court jurisdiction does not
disappear entirely. Binder, No. 02-1333,
slip op. at 9. Post-confirmation
jurisdiction is assumed by statute and rule:
11 U.S.C. § 1142(b) authorizes the
bankruptcy court to “direct the debtor and
any other necessary party . . . to perform
any other act . . . that is necessary for the
consummation of the plan,” id., and Fed.
R. Bankr. P. 3020(d) provides that
“[n]otwithstanding the entry of the order
of confirmation, the court may issue any
other order necessary to administer the
estate.” Id. Although § 1142(b) assumes
that post-confirmation jurisdiction exists
for disputes concerning the consummation
of a confirmed plan, 28 U.S.C. § 1334
remains the source of this jurisdiction. In
re United States Brass Corp., 301 F.3d at
306.
Moreover, several courts have
preserved post-confirmation jurisdiction in
the bankruptcy court. See Gryphon, 166
F.3d at 555-56 (holding that the
bankruptcy court had post-confirmation
jurisdiction because a trustee’s action to
enforce a fee provision was related to and
arising in the bankruptcy); Donaldson, 104
F.3d at 552-54 (upholding post-
confirmation bankruptcy court jurisdiction
where the debtors failed to fund the
reorganization plan and failed to pay
unsecured creditors as required by the
plan). And courts have upheld post-
confirmation jurisdiction in situations
involving trusts and similar entities. See
Bergstrom v. Dalkon Shield Claimants
Trust (In re A.H. Robins Co.), 86 F.3d 364,
372-73 (4th Cir. 1996) (upholding
bankruptcy jurisdiction over a professional
fees dispute between a claimants’ trust and
attorneys representing claimants on the
trust).8
8Other courts have also upheld post-
confirmation bankruptcy jurisdiction over
continuing trusts. See New Nat’l Gypsum
Co. v. Nat’l Gypsum Co. Settlement Trust
(In re Nat’l Gypsum Co.), 219 F.3d 478,
479, 493 (5th Cir. 2001) (assuming
bankruptcy court jurisdiction over a post-
confirmation proceeding involving a
settlement trust where the court had to
interpret the plan of reorganization in
order to resolve a dispute); Plotner v.
AT&T Corp., 224 F.3d 1161, 1171 (10th
Cir. 2000) (holding that a post-
confirmation fraud action involving a plan-
created trust was related to the bankruptcy
proceeding); United States v. Unger, 949
F.2d 231, 233-35 (8th Cir. 1991) (holding

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14
Courts have applied varying
standards to determine whether “related
to” jurisdiction should be upheld post-
confirmation. We noted in Donaldson,
104 F.3d 547, that some courts have held
that the act of plan confirmation changes
the Pacor test from “whether the outcome
of the proceeding could conceivably have
any effe ct on th e estate bein g
administered” to “whether the outcome
could ‘significantly affect[] consummation
of the plan as confirmed.’” Id. at 553
(quoting Grimes v. Graue (In re Haws),
158 B.R. 965, 970 (Bankr. S.D. Tex.
1993)).9 In Donaldson, we declined to
determine the “precise standard” to apply
post-confirmation. First W. SBLC, Inc. v.
Mac-Tav, Inc., 231 B.R. 878, 882 (D.N.J.
1999). Subsequently, in Gryphon, 166
a bankruptcy court had post-confirmation
jurisdiction when a representative of the
creditors committee deposited trust funds
into his personal account in contravention
of the plan); Mayor v. W. Va. (In re Eagle-
Picher Indus., Inc.), 285 F.3d 522, 524
(6th Cir. 2002) (assuming without analysis
post-confirmation bankruptcy jurisdiction
over a dispute involving a settlement
trust).
9Other courts have applied similar tests
that assess whether the dispute could
conceivably affect the implementation or
consummation of the confirmed plan. See
Trans World Airlines, Inc. v. Karabu
Corp., 196 B.R. 711, 714 (Bankr. D. Del.
1996) (“[T]his court has subject matter
jurisdiction over any proceeding that
conceivably could affect [the debtor’s]
ability to consummate the confirmed
plan.”); In re Walker, 198 B.R. 476, 482
(Bankr. E.D. Va. 1996) (“Jurisdiction over
certain post-confirmation disputes remains
with the Bankruptcy Court to the extent
that those disputes might affect the
s u c c e s s f u l i m p l e m e n t a t i o n a n d
consummation of the confirmed plan.”);
Eubanks v. Esenjay Petroleum Corp., 152
B.R. 459, 464 (E.D. La. 1993)
(Bankruptcy courts maintain jurisdiction if
the proceeding has “a conceivable effect
on the debtor’s ability to consummate the
confirmed plan.”). Some courts have been
reluctant to apply such a broad standard
post-confirmation but have nonetheless
found that bankruptcy court jurisdiction
continues post-confirmation. See In re
Craig’s Stores of Tex., 266 F.3d at 391
(holding that a bankruptcy court has
jurisdiction over a civil proceeding if the
litigated matter “bear[s] on the
interpretation or execution of the debtor’s
plan”); In re Dilbert’s Qu ality
Supermarkets, Inc., 368 F.2d 922, 924 (2d
Cir. 1966) (holding that bankruptcy court
jurisdiction continues post-confirmation at
least “to protect its decree, to prevent
interference with the execution of the plan
and to aid otherwise in its operation”); In
re Leeds Bldg. Prod., Inc., 160 B.R. 689,
691 (Bankr. N.D. Ga. 1993) (concluding
that the bankruptcy court’s role post-
confirmation “is limited to matters
involving the execution, implementation,
or interpretation of the plan’s provisions,
and to disputes requiring the application of
bankruptcy law”).

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15
F.3d 552, we applied the Pacor test to
resolve a claim for post-confirmation fees
brought by a United States Trustee,
querying whether the dispute “could
conceivably have any effect on the estate
being administered in bankruptcy” and
holding that the matter satisfies the Pacor
test “because it directly relates to the
debtor’s liabilities—in fact it creates a
liability—and could impact the handling
and administration of the estate.” Id. at
556. And in Gryphon, we held that though
11 U.S.C. § 114210 provides that the
bankruptcy court may take action to ensure
the consummation of a confirmed plan, the
bankruptcy court may entertain other post-
confirmation actions as well. 166 F.3d at
556.
Though courts have varied the
standard they apply post-confirmation, the
essential inquiry appears to be whether
there is a close nexus to the bankruptcy
plan or proceeding sufficient to uphold
bankruptcy court jurisdiction over the
matter. For example, in Donaldson, 104
F.3d 547, we upheld bankruptcy court
jurisdiction because the trustee through the
lawsuit was “basically . . . seeking to carry
out the intent of the reorganization plan.”
Id. at 553. We distinguished the matter
from other cases denying jurisdiction
because it had a “much closer nexus to the
bankruptcy case.” Id. In upholding
jurisdiction, we found significant the fact
that the case did “not involve a dispute
essentially collateral to the bankruptcy
case.” Id. Rather, the action “implicat[ed]
the integrity of the bankruptcy process”
because one party’s actions impaired the
other party’s ability to act in accordance
with the plan. Id. The post-confirmation
fee dispute in Gryphon, 166 F.3d 552, also
had a close nexus to the bankruptcy
proceeding because it involved a U.S.
Trustee’s action to enforce a post-
confirmation fee provision and created a
liability for the debtor. Id. at 555. At the
post-confirmation stage, the claim must
affect an integral aspect of the bankruptcy
process— there must be a close nexus to
the bankruptcy plan or proceeding.
Whether a matter has a close nexus
to a bankruptcy plan or proceeding is
particularly relevant to situations involving
continuing trusts, like litigation trusts,
where the plan has been confirmed, but
former creditors are relegated to the trust
res for payment on account of their claims.
To a certain extent, litigation trusts by their
nature maintain a connection to the
bankruptcy even after the plan has been
confirmed. The question is how close a
connection warrants post-confirmation
bankruptcy jurisdiction. Matters that
affect the interpretation, implementation,
c o n s u m m a t i o n , e x e c u t i o n , o r
administration of the confirmed plan will
typically have the requisite close nexus.
Under those circumstances, bankruptcy
court jurisdiction would not raise the
specter of “unending jurisdiction” over
continuing trusts.
1011 U.S.C. § 1142(b) authorizes the
bankruptcy court to “direct the debtor and
any other necessary party . . . to perform
any other act . . . that is necessary for the
consummation of the plan.” Id.

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16
An example of a dispute in which
there was a sufficiently close nexus to the
plan or proceeding to uphold bankruptcy
court jurisdiction post-confirmation was an
earlier proceeding involving the Resorts
International, Inc. bankruptcy. See In re
Resorts Int’l, 199 B.R. 113. There, unlike
here, the Bankruptcy Court was required to
construe and enforce provisions of the
Plan to resolve a post-confirmation dispute
over whether the Litigation Trust or the
debtor was entitled to accrued interest. Id.
at 120-25. The court correctly held that it
retained jurisdiction to enter appropriate
orders to enforce the intent and specific
provisions of the Plan. Id. at 118-19.
Bergstrom, 86 F.3d 364, and Falise
v. Am. Tobacco Co., 241 B.R. 48
(E.D.N.Y. 1999), are useful for illustrating
when there is a sufficiently close nexus to
the bankruptcy plan or proceeding to
uphold bankruptcy jurisdiction in post-
confirmation situations invo lv ing
continuing trusts. In Bergstrom, 86 F.3d
364, the dispute implicated an integral
aspect of the bankruptcy process. The
plan-created trust intended to distribute
surplus funds to tort claimants on a pro
rata basis. Id. at 367. But certain
attorneys claimed entitlement to contingent
fees. Id. The district court, sitting in
bankruptcy, limited attorneys’ fees to ten
percent of the amounts distributed. Id. To
resolve the dispute, it was necessary to
interpret the plan’s accom panying
documents to determine whether it was
unreasonable to charge standard attorneys’
fees out of the pro rata distribution. See
id. at 368-71. In upholding “related to”
jurisdiction, the court explained why the
dispute was central to the bankruptcy
proceeding: “The Trust was created to
protect and pay those persons who had
been damaged by use of the Dalkon
Shield. The efforts of the Trust to settle
the remaining claims could easily be
affected if the remaining claimants are
aware that any attorneys’ fees out of the
pro rata distribution will be limited to ten
percent.” Id. at 372. Accordingly, the
dispute integrally affected the bankruptcy
plan and proceeding, and it was
appropriate for the district court, sitting in
bankruptcy, to exercise jurisdiction over
that proceeding.
In contrast, this kind of close nexus
to the bankruptcy plan or proceeding was
absent in Falise, 241 B.R. 48. Falise
involved a dispute between tobacco
manufacturers and a trust created as a
result of the bankruptcy of an asbestos
products producer. Id. at 51. The trust
sought to recover from the tobacco
companies for their role in contributing to
asbestos-related illnesses. Id. Noting that
the resolution of the dispute would require
more than merely interpreting the plan’s
terms, the court held that bankruptcy court
jurisdiction does not extend to a “major
suit” brought by the trust against non-
parties to the bankruptcy or to any closely
related proceeding. Id. at 52, 55. In
Falise, the resolution of the dispute would
have had no impact on any integral aspect
of the bankruptcy plan or proceeding.
Accordingly, it was appropriate to find no
bankruptcy jurisdiction over that collateral
matter.

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17
In re Haws, 158 B.R. 965, similarly
illustrates when a proceeding lacks a
sufficiently close nexus to the bankruptcy
plan or proceeding to uphold post-
confirmation jurisdiction. There, the
action was brought by a trustee for a
liquidating trust against a partner of the
debtor for breach of fiduciary duty. Id. at
967-68. In holding the matter to be
outside bankruptcy court jurisdiction, the
court noted the plaintiff had failed to
demonstrate how any damages recovered
from the defendant were “necessary to
effectuate the terms of the” plan. Id. at
971. The court recognized that “[n]owhere
in the lawsuit is the bankruptcy court being
asked to construe or interpret the
confirmed plan or to see that federal
bankruptcy laws are complied with in the
face of violations.” Id. It concluded: “The
only nexus to this bankruptcy case is that
the plaintiff in this matter is a liquidating
trustee representing a group of creditors
appointed pursuant to the confirmed plan
of reorganization.” Id.
Montana v. Goldin (In re Pegasus
Gold Corp.), 296 B.R. 227 (D. Nev. 2003),
is also instructive. A reclamation services
corporation (“RSC”) was created under a
reorganization plan for the purpose of
performing short-term reclamation work
“in order to benefit the overall Plan goal of
preserving the jobs of Debtors’ employees
to thereby maximize the possibility of
creditor recovery.” Id. at 231. The
Trustee and RSC contended the state of
Montana had represented that RSC would
be given preference in the bidding for
long-term reclamation work. Id. at 232.
They brought suit, alleging Montana
breached the agreement by hiring a
competitor to perform the reclamation
work. Id. The court upheld bankruptcy
court jurisdiction because RSC’s failure,
and its inability to retain the debtors’
employees on account of Montana’s
breach, “undermine[d] the Plan’s
objectives for reorganization and the
payment of creditors.” Id. at 233-35. The
court held that the “facts demonstrate the
necessary close nexus between appellees’
tort and contract claims and the bankruptcy
proceeding.” Id. at 235.
As stated, the jurisdiction of the
non-Article III bankruptcy courts is limited
after confirmation of a plan. But where
there is a close nexus to the bankruptcy
plan or proceeding, as when a matter
affects the interpretation, implementation,
c o n s u m m a t i o n , e x e c u t i o n , o r
administration of a confirmed plan or
incorporated litigation trust agreement,
retention of post-confirmation bankruptcy
court jurisdiction is normally appropriate.
IV.
We now assess whether the
Bankruptcy Court can exercise “related to”
jurisdiction over these malpractice claims.
As noted, the Trustee’s principal allegation
was that Price Waterhouse erroneously
reported in its audit reports that accrued
interest on Litigation Trust accounts
belonged to the debtor rather than to the
Litigation Trust. The Trustee also alleged
other errors in auditing and tax advice.
Price Waterhouse’s errors, according to

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18
the Trustee, constituted professional
negligence and breach of contract.
The Trustee has made several
arguments why the malpractice claims are
sufficiently connected to the bankruptcy
process to uphold bankruptcy court
jurisdiction: the claims affect the
Litigation Trust, which is a continuation of
the estate; the claims affect the debtor; the
claims affect the operation of the
Reorganization Plan; the claims affect the
former creditors as beneficiaries of the
Litigation Trust; and the jurisdictional
retention provisions confer continued
jurisdiction. The jurisdictional import of
these arguments is not easily resolved.
Nonetheless, we believe this
proceeding lacks a close nexus to the
bankruptcy plan or proceeding and affects
only matters collateral to the bankruptcy
process. The resolution of these
malpractice claims will not affect the
estate; it will have only incidental effect on
the reorganized debtor; it will not interfere
with the im plem entatio n of the
Reorganization Plan; though it will affect
the former creditors as Litigation Trust
beneficiaries, they no longer have a close
nexus to bankruptcy plan or proceeding
because they exchanged their creditor
status to attain rights to the litigation
claims; and as stated, the jurisdictional
retention plans cannot confer jurisdiction
greater than that granted under 28 U.S.C.
§ 1334 or 28 U.S.C. § 157. For these
reasons, the malpractice claims here lack
the requisite close nexus to be within the
Bankruptcy Court’s “related to”
jurisdiction post-confirmation.
The Trustee argues the estate is
affected because the Litigation Trust is a
continuation of the estate. The District
Court agreed, reasoning that the affairs of
post-confirmation trusts are “effectively
those of the estate (or at least analogous to
those of the estate) for jurisdictional
purposes.” Binder, No. 02-1333, slip op.
at 12-13. Though the Litigation Trust’s
assets, the proceeds from the litigation
claims, were once assets of the estate, that
alone does not create a close nexus to the
bankruptcy plan or proceeding sufficient to
confer bankruptcy jurisdiction. The
Litigation Trust’s connection to the
bankruptcy is not identical to that of the
estate. Under section 1.1 of the Litigation
Trust, the debtor “absolutely assigned to
the Trustee and to its successors and
assigns, all right, title and interest of the
Reorganizing Entities in and to the
Litigation Claims.” Moreover, the
Litigation Trust was created in part so that
the Plan could be confirmed and the debtor
freed from bankruptcy court oversight
without waiting for the resolution of the
litigation claims. The deliberate act to
separate the litigation claims from the
bankruptcy estate weakens the Trustee’s
claim that the Litigation Trust has the
same jurisdictional nexus as that of the
estate. Given the limited jurisdiction of
non-Article III bankruptcy cou rts,
jurisdiction does not extend necessarily to
all matters involving litigation trusts.
The Trustee also contends the
resolution of the malpractice claim will
affect the debtor, Resorts International,
Inc. The debtor is not a party to this

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19
litigation because, as stated, under section
1.1 of the Litigation Trust Agreement, it
assigned away its right, title, and interest
in the litigation claims. But the Trustee
argues Resorts would still be affected by
this dispute because it “is claiming to be a
continuing creditor of the estate” due to
the litigation over the accrued interest.
Oral Argument Transcript at 32. Should
Resorts prevail in that ongoing dispute,11
the Trustee contends Resorts may have a
claim against the Litigation Trust, and an
award in the malpractice action could be
distributed back to Resorts to pay on that
claim. Such attenuated effect on the
reorganized debtor does not create a close
nexus to the bankruptcy plan or proceeding
sufficient to confer bankruptcy court
jurisdiction. After assigning away its
right, title, and interest in the Litigation
Trust’s litigation claims, the reorganized
debtor would have no greater claim to the
proceeds from this malpractice action than
any other Litigation Trust creditor. Any
funds eventually received by the debtor as
a result of the malpractice dispute would
be incidental to the bankruptcy process.
The Trustee maintains that
continuing jurisdiction over the matter is
“essential to the integrity of the Plan and
its implementation.” Appellee’s Br. at 2.
We disagree. It is true that accounting
services are essential in administering
trusts, and in certain circumstances,
accounting errors could have a sufficiently
close nexus to the bankruptcy plan or
proceeding to warrant exercising “related
to” jurisdiction post-confirmation. But the
resolution of the claims here will have no
substantial effect on the success of the
Plan.
Resolution of this matter will not
require a court to interpret or construe the
Plan or the incorporated Litigation Trust
Agreement. Whether Price Waterhouse
was negligent or breached its contract will
not be determined by reference to those
documents. There is no dispute over their
intent. The Trustee’s claims are
“ordinary” professional negligence and
breach of contract claims that arise under
state common law. Though the Plan and
Trust Agreement provide the context of
the case, this bare factual nexus is
insuf ficie nt to con fer ba nkru ptcy
jurisdiction.
The malpractice action could result
in an increase in the Litigation Trust’s
finite assets. But the potential to increase
assets of the Litigation Trust and its
beneficiaries does not necessarily create a
close nexus sufficient to confer “related
to” bankruptcy court jurisdiction post-
confirmation. The Trust beneficiaries here
no longer have the same connection to the
bankruptcy proceeding as when they were
creditors of the estate. For reasons they
believed financially prudent, they traded
11Even though the Bankruptcy Court
resolved the interest dispute in In re
Resorts Int’l, 199 B.R. 113, according to
the Trustee’s Complaint, the dispute is
“ongoing” because Resorts International,
Inc. and the Litigation Trust “remain
engaged in negotiations over the form of
the order and settlement of other issues.”
Joint Appendix at 76.

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20
their creditor status as claimants to gain
rights to the Litigation Trust’s assets.
Thus, their connection to the bankruptcy
plan or proceeding is more attenuated.
Furthermore, if the mere possibility of a
gain or loss of trust assets sufficed to
confer bankruptcy court jurisdiction, any
lawsuit involving a continuing trust would
fall under the “related to” grant. Such a
result would widen the scope of
bankruptcy court jurisdiction beyond what
Congress intended for non-Article III
bankruptcy courts. Accord ingly,
resolution of these malpractice claims will
n o t a f f e c t t h e i n t e r p r e t a t i o n ,
implementation, consummation, execution,
or administration of the Plan.12
V.
For these reasons, there is no
“related to” jurisdiction over the
malpractice dispute, and it cannot find a
home in the Bankruptcy Court. We will
reverse the order of the District Court and
remand for proceedings consistent with
this opinion.
12Price Waterhouse argues the matter
turns in part on the fact that it was not
explicitly named in the Litigation Trust
Agreement or the Reorganization Plan and
that the Bankruptcy Court did not approve
its retention or dismissal. In some
circumstances, these factors may affect the
jurisdictional inquiry. But they are not
significant here.
Price Waterhouse also argues the
lapse of time since confirmation factors
against bankruptcy jurisdiction. The
Bankruptcy Court issued an Order
confirming the Plan on August 28, 1990.
The Trustee filed this malpractice action
on April 15, 1997. The Trustee responds
that Price Waterhouse’s malpractice
“began barely after the ink dried on the
confirmation order,” and notes that Price
Waterhouse released its allegedly
erroneous report that the interest income
belonged to the Debtor in 1992.
Appellee’s Br. at 12-13. Though in some
circumstances, the lapse of time since
confirmation may be relevant to whether a
matter has a “close nexus” to a bankruptcy
plan or proceeding, we do not find it to be
so here.

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