## Facts

- Patricia Ann White filed a divorce action against John Paul White in an Ohio common pleas court.
- The divorce court ordered John to pay temporary alimony of $800 per week; he made no payments.
- Patricia sought appointment of a receiver over John’s property in the divorce case.
- John filed a Chapter 11 bankruptcy petition; the automatic stay under 11 U.S.C. § 362 halted the pending divorce proceedings.
- Patricia moved in bankruptcy court for relief from the stay to allow the divorce action to proceed, including division of marital property.
- The bankruptcy court lifted the stay to permit the state court to proceed with the divorce and apportionment of the marital estate, while stating it was not authorizing the state court to appoint a receiver.
- The district court affirmed; John appealed to the Sixth Circuit.

## Issues

1. Whether the bankruptcy court abused its discretion under 11 U.S.C. § 362(d) by lifting the automatic stay to allow a previously filed state divorce proceeding to continue and divide marital property overlapping with the bankruptcy estate.
2. Whether deference to the state divorce court based on its prior in rem jurisdiction and comity improperly divested the bankruptcy court of exclusive control over property of the estate.

## Decision

- The Sixth Circuit affirmed the district court’s order upholding stay relief.
- The court held the bankruptcy court did not abuse its discretion in lifting the automatic stay to permit the state divorce court to proceed with divorce-related property division.
- The court accepted that the state divorce court had first asserted in rem jurisdiction over the marital property and that comity supported allowing that court to determine spouses’ respective interests.
- The court emphasized that the stay-relief order preserved bankruptcy oversight by limiting state-court action (including no authorization to appoint a receiver) and by leaving administration and distribution priorities to the bankruptcy process.

## Legal Principles

- A bankruptcy court’s decision to grant relief from the automatic stay under 11 U.S.C. § 362(d) is reviewed for abuse of discretion.
- When a state court has first exercised in rem jurisdiction over marital property in a divorce action, a bankruptcy court may, consistent with comity, lift the automatic stay to allow the state court to determine the parties’ respective property interests.
- Lifting the stay to allow state-law allocation of marital property does not necessarily surrender bankruptcy jurisdiction where the bankruptcy court retains authority over estate administration and the application of bankruptcy priorities.
- Stay relief may be limited to prevent state-court measures that would conflict with bankruptcy administration (e.g., receivership over estate property).

## Conclusion

The Sixth Circuit upheld stay relief permitting an ongoing Ohio divorce case to proceed to marital property division because the state court first exercised in rem jurisdiction and comity favored state adjudication of domestic-relations property interests, while the bankruptcy court retained authority over estate administration and bankruptcy-law priorities.


White v. White, 851 F.2d 170 (6th Cir. 1988)