When a party in state court suddenly files for bankruptcy, the litigation is often just as swiftly removed to U.S. Bankruptcy Court. Behind many a closed door, green and vintage practitioners alike scratch their heads and ask, "How do I return to state court once my case has been removed to bankruptcy court?"

While bankruptcy court is presumably the preferred venue of bankruptcy practitioners, many state court practitioners don't share that preference for a host of reasons. For one thing, once his or her case is moved to bankruptcy court, a state court practitioner must confront entirely new sets of rules: procedural, local, and unwritten alike.

The sticky problem, however, is this: protecting a client's rights by filing a counterclaim in state court or a proof of claim in the bankruptcy proceeding generally cements the bankruptcy court's jurisdiction. With some minor variations, a majority of courts have held that proceedings are subject to the core jurisdiction of the bankruptcy court if the party asserting or defending against a state law claim files a...

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