## Facts

- Tandycrafts, Inc., a Delaware debtor, operated manufacturing facilities in Mexico and a distribution center in Texas.
- A Mexican trucking company provided cross-border hauling services for Tandycrafts, including shipments from Mexico to U.S. destinations and to Tandycrafts’ Texas distribution center.
- The trucking company maintained and used a post office box in Texas for U.S.-related business communications and payments.
- After the bankruptcy filing, the trustee brought an adversary proceeding seeking to avoid and recover a payment to the trucking company as a preferential transfer under 11 U.S.C. § 547.
- The trustee served the summons and complaint by first-class mail (return receipt requested) addressed to the trucking company’s Texas P.O. box; the return receipt was signed and returned.
- The trucking company made a limited appearance and moved to dismiss for lack of personal jurisdiction and insufficient service of process.

## Issues

1. Whether a bankruptcy court may exercise personal jurisdiction over a foreign corporation in a preference action where Bankruptcy Rule 7004 permits nationwide service, based on the defendant’s contacts with the United States.
2. Whether service by first-class mail to the defendant’s U.S. post office box, with a signed return receipt, satisfies Bankruptcy Rule 7004 and constitutional due process.

## Decision

- The court denied the motion to dismiss.
- The court held it had personal jurisdiction because the defendant had sufficient minimum contacts with the United States, and exercising jurisdiction comported with Fifth Amendment due process.
- The court held service by first-class mail to the defendant’s Texas P.O. box was valid under Bankruptcy Rule 7004 and provided constitutionally adequate notice.

## Legal Principles

- When nationwide service of process is authorized in a bankruptcy adversary proceeding under Bankruptcy Rule 7004, due process is evaluated under the Fifth Amendment, and minimum contacts are assessed against the United States as a whole rather than the forum state.
- A foreign defendant that regularly conducts business into the United States and uses a U.S. business address may have minimum contacts sufficient for specific personal jurisdiction when the claim arises from that U.S. business.
- Even if litigation in the chosen bankruptcy forum is inconvenient for a foreign defendant, jurisdiction is proper absent a showing that it is so gravely difficult and inconvenient as to be constitutionally unfair.
- Bankruptcy Rule 7004 permits service on a corporation by mail, and service is sufficient when the method is reasonably calculated to provide notice and the defendant actually receives the summons and complaint.

## Conclusion

The bankruptcy court allowed the trustee’s preference action to proceed, holding that Rule 7004’s nationwide service supports personal jurisdiction based on national contacts and that first-class mail service to the defendant’s U.S. P.O. box satisfied both the bankruptcy rules and due process.


In re Tandycrafts, Inc., 317 B.R. 287 (Bankr. D. Del. 2004)