Taxel

MEMORANDUM OPINION AND ORDER REGARDING MOTION FOR WITHDRAWAL OF REFERENCE

FACTUAL BACKGROUND

This case arises out of the leveraged buy-out of all of the stock of Palomar Electric Supply, Inc. (“Palomar”) by Torwest Acquisition Corporation (“Torwest”) on January 30,1988. It is alleged that Marine Midland, one of the defendants and the moving party, directly participated in a common plan or design to commit tortious acts and in the leveraged buy-out by which former shareholders of the debtor sold all their shares in Palomar to Torwest. This transaction was structured so that the purchasing shareholder, Torwest, financed its obligation to pay for the selling shareholders’ shares by taking a lien against the assets of Palomar as security for the loan from Marine Midland rather than by taking a lien against the stock which was the subject of the transaction. Subsequently, Marine Midland foreclosed on its security interest in Palomar’s hard assets (or accepted all of Palomar’s remaining hard assets in lieu of foreclosure), leading Palomar to claim that it received less than fair consideration in the leveraged buy-out and that it was left without sufficient capitalization or resources…