A proceeding in a bankruptcy case in which a substantive right provided by the Bankruptcy Code is invoked, or a proceeding that by its nature could only exist in the context of a bankruptcy case. Factors examined when determining whether a proceeding is a “core proceeding” include whether the claim existed prior to commencement of the case and whether the claim would exist independent of the provisions of the Bankruptcy Code (preference claims, for example, would not). The distinction between “core” and “non-core” proceedings often bedevils practitioners. Examples of core proceedings include the allowance or disallowance of claims in bankruptcy, motions by debtors to obtain credit in bankruptcy, proceedings to recover preferences, motions to terminate the automatic stay, objections to discharge, and proceedings to confirm a plan. As of publication, the U.S. Supreme Court decision in Stern v. Marshall held that, while 28 U.S.C. Section 157(b)(2) classifies certain counterclaims filed by a bankruptcy estate as “core” (even when arising wholly under state law) and thus allowed bankruptcy courts to enter final judgments on such counterclaims, Article III of the United States Constitution does not permit such a result. Accordingly, the Court determined that it was unconstitutional for Congress to classify as “core” any counterclaim, no matter how arising, of a bankruptcy estate against a person who had filed a claim against the estate.
28 U.S.C. Section 157(b). See also Jurisdiction, Non-Core Proceedings.