Choudhri v. Natl Bank of Kuwait
- Summarized by Danielle Scott , U.S. Bankruptcy Court, Southern District of West Virginia
- 2 months 2 days ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- 25-20096 (5th Circuit, Dec 04,2025) Not Published
- Tag(s):
-
- Ruling:
- The Fifth Circuit affirmed the district court's order. The Fifth Circuit held: (1) the bankruptcy court had proper related to jurisdiction since the contested tax liens in the state court action were the same claims he had already raised through his proof of claim in the bankruptcy case, making removal proper; (2) dismissal was appropriate under Fed. R. Civ. P. 12(b)(6) because the confirmed Chapter 11 plan extinguished any tax lien interest Choudhri asserted and that Choudhri was bound by the plan terms, leaving no remaining basis for relief.
- Procedural context:
- Ali Choudhri initiated a state court action against the Bank for claims arising from tax liens that were transferred to the Bank under a previous settlement agreement. The Bank removed the state court-action to the bankruptcy court. Choudhri moved to remand. Simultaneously, Choudhri filed a third amended complaint in the adversary proceeding. The bankruptcy court denied the motion to remand and dismissed the adversary proceeding for failure to state a claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6) and for failure to serve the complaint within 90 days under Fed. R. Civ. P. 4(m). The district court affirmed, and Choudhri appealed to the Fifth Circuit.
- Facts:
- National Bank of Kuwait (the "Bank") entered into a loan agreement with Galleria 2425 Owner, LLC (the "Debtor"). Ali Choudhri served as the member-manager of several LLCs that controlled the Debtor and engaged in extensive state-court litigation with the Bank to prevent the foreclosure of a commercial building located in Houston, Texas (the "Property"). Pursuant to a confirmed Chapter 11 plan, the Property was sold. Despite the consummation of the sale, Choudhri continued to pursue claims against the Bank arising from an August 22, 2022 settlement agreement, including filing proofs of claim based on tax liens that were transferred to the Bank under the settlement agreement. Subsequently, Choudhri filed a lawsuit against the Bank after raising his claims in the bankruptcy case. The Bank removed the state-court action to the bankruptcy court after which Choudhri moved to remand and filed a third amended complaint in the adversary proceeding.
- Judge(s):
- Southwick, Higginson, and Douglas
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