govinfo:USCOURTS-laed-2_25-cv-01970-0

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UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF LOUISIANA 
 
IN RE: TSB VENTURES, LLC CIVIL ACTION 
 
 NO: 25-1970 
 25-1992 
 25-2007 
 
 SECTION: C (5) 
 
ORDER AND REASONS 
 
Before the court are three appeals from an order of the United States 
Bankruptcy Court for the Eastern District of Louisiana denying three motions to 
compel arbitration. The bankruptcy court order is AFFIRMED. 
BACKGROUND 
 TSB Ventures, LLC is a private equity fund that invests in early to mid-stage 
companies, primarily small businesses and start -ups. Jose Canseco was a 2% 
member of TSB and CA Recovery Master Fund, LLC was a 98% member (now 
100% member). Victor Trahan was a remote investor in TSB. 
TSB invested in Kologik, LLC. Unhappy with the terms of that investment, 
Trahan sued Canseco and the members of Kologik. Canseco claimed entitlement to 
an incentive bonus, which Trahan denied. In July 2020, the parties agreed to 
arbitration. By December 2020, the parties had settled nearly all disputes and entered 
a settlement agreement. The dispute regarding the incentive bonus was not resolved, 

 
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instead, Canseco and Trahan agreed to arbitrate that dispute. Kologik was to pay the 
prevailing party $1.8 million. The settlement agreement contemplated Kologik 
selling its assets for $25 million, with $1.8 million set aside from the sale proceeds. 
The arbitration was to occur within one week of the settlement agreement. TSB 
alleges Canseco and Trahan failed to arbitrate their dispute. 
In April 2024, Kologik filed a voluntary petition for bankruptcy in the Middle 
District of Louisiana. Kologik’s assets were sold for near $24 million , with 
approximately $1.8 million held from the sale. 
On January 20, 2025, TSB filed a Chapter 11 bankruptcy petition in the 
Eastern District of Louisiana. 25-10117, R. Doc. 1. Canseco and Trahan both made 
claims in the TSB bankruptcy proceeding. TSB filed an adversary proceeding in the 
Eastern District against Canseco and Trahan, seeking a declaration that $1.8 million 
belongs to the TSB bankruptcy estate and TSB is excused from escrowing those 
funds. 25-10117, R. Doc. 129; 25-1039, R. Doc. 1. 
TSB filed a motion to compel arbitration in the adversary proceeding. 25-
1039, R. Doc. 7 and 8. CA Recovery and another creditor, Murphy, Rogers/Willis & 
Buckley, also filed motions to compel arbitration in the bankruptcy proceeding. 25-
10117, R. Doc. 132; 25-10117, R. Doc. 156. The bankruptcy court denied all three 
motions in a single order. 25-1039, R. Doc. 18; 25-10117, R. Doc. 193. TSB and CA 
Recovery appealed with briefing. 25-1970, R. Doc. 1 and 13; 25-1992, R. Doc. 1 

 
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and 10. Murphy, Rogers/Willis & Buckley appealed without briefing. 25-2007, R. 
Doc. 1. The appeals are consolidated for determination. 
ANALYSIS 
The motions to compel rely upon the following arbitration provision in the 
settlement agreement: 
Any future dispute that may arise among or between any of the Parties 
will be resolved in an arbitration to be conducted by John Perry 
(“Perry”) using rules to be determined by Perry but generally similar to 
those set forth in the Arbitration Agreement. 
 
*** 
 Any dispute regarding or arising out of the subject matter of this 
Settlement Agreement and of any related agreements shall be subject to 
resolution by binding arbitration with Perry as the sole arbitration. 
 
Generally, a federal court must enforce a contractually mandated arbitration clause, 
unless the party opposing arbitration can show that its position is supported by a 
congressional mandate that supersedes the Federal Arbitration Act. In re Westbank 
Holdings, LLC, 658 B.R. 879, 885 (Bankr. E.D. La. 2024); In re Mirant Corp., 316 
B.R. 234, 237 (Bankr. N.D. Tex. 2004). The bankruptcy code can serve as a 
congressional mandate superseding the FAA, particularly with respect to “core” 
bankruptcy matters. In re Westbank Holdings, 658 B.R. at 885. A bankruptcy court 
has discretion to refuse to compel a rbitration when the subject of the arbitral 
proceeding derives exclusively from the bankruptcy code and arbitration conflicts 

 
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with the purpose of the code. Gandy v. Gandy (In re Gandy), 299 F.3d 489, 495 (5th 
Cir. 2002). 
 A bankruptcy court’s decision whether an arbitration clause is enforceable is 
reviewed de novo. Matter of Henry , 944 F.3d 587, 591 (5th Cir. 2019) . If the 
bankruptcy court concludes that the FAA does not require enforcement, it then has 
discretion whether to order arbitration , which discretion is reviewable only for 
abuse. Id. 
A proceeding is “core” if it involves a substantive right created by Title 11 or 
if, by its nature, it could arise only in the context of a bankruptcy case. Wood v. Wood 
(In re Wood), 825 F.2d 90, 97 (5th Cir. 1987). To determine whether a proceeding or 
claim is core, courts look to both the form and substance of the proceeding. Id. 
Generally, a core proceeding derives exclusively from the bankruptcy code. Matter 
of Nat’l Gypsum Co., 118 F.3d 1056, 1067 (5th Cir. 1997). 29 USC § 157 (b)(1) states 
that “[b]ankruptcy judges may hear and determin e all cases under title 11 and all 
core proceedings arising under title 11, or arising in a case under title 11[.]” “Arising 
under” jurisdiction covers a cause of action created or determined by Title 11. Wood, 
825 F.2d at 96. “Arising in” jurisdiction refers to claims not based on any right 
expressly created by Title 11, but which have no existence outside of the bankruptcy. 
Id. 

 
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TSB’s adversary proceeding seeks a judgment declaring (1) $1.8 million as 
property of its bankruptcy estate under 11 U.S.C. § 541(a) and (2) TSB is excused 
from escrowing those funds. Canseco and Trahan assert counter claims arising from 
TSB’s failure to escrow the funds. The bankruptcy court considered the claims of 
Trahan and Canseco made in the bankruptcy proceeding , the adversary case filed 
against them by TSB, and the counter claims . In denying the motions to compel 
arbitration, the bankruptcy court found the claims “all part and parcel” and “go to 
the very heart of what this bankruptcy court is here to do,” which is to “reconcile the 
debtor’s relationship with its creditors and often reconcile the relationships between 
the creditors themselves. That is the purpose of this forum . . .. It provides debtors 
and creditors with the ability to centralize the disputes. That is a core purpose of the 
Bankruptcy Code.” 25-10117, R. Doc. 194; 25-1039, R. Doc. 19. 
The essential dispute here is whether the $1.8 million is property of TSB’s 
bankruptcy estate and, if so, what are the parties’ rights relative to th ose funds. A 
proceeding to determine whether a debtor’s interest in property is “property of the 
estate” is a core proceeding under § 157(b)(2)(A). In re Envision Healthcare 
Corporation, 655 B.R. 701, 709 (Bankr. S.D. Tex 2023); Speer v. Tow (In re Royce 
Homes, LP), 652 B.R. 488, 495–96 (Bankr. S.D. Tex. 2023); Manges v. Atlas (In re 
Duval Cty. Ranch Co.) , 167 B.R. 848, 849 (Bankr. S.D. Tex. 1994). That 
determination is a quintessential element of the bankruptcy code. In re Envision 

 
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Healthcare Corporation, 655 B.R. at 709. An equitable distribution of assets is not 
possible without it. Id. Resolution of the $1.8 million dispute is a core claim. 
While categorizing a claim as “core” does not automatically render the claim 
non-arbitral, the categorization raises the bar for denying the bankruptcy court’s 
discretion. Goldman Sachs Bank USA v. Brown, 170 F.4th 249, 257 (4th Cir. 2026). 
As explained by the United States Court of Appeals for the Fourth Circuit: 
While arbitration agreements are to be rigorously enforced, bankruptcy 
too represents a fundamental public policy. Grounded in the 
Constitution, bankruptcy provides debtors with a fresh start and 
creditors with an equitable distribution of the debtor’s ass ets. To those 
ends, a principal purpose of the Bankruptcy Code is to provide debtors 
and creditors with the prompt and effectual administration and 
settlement of the debtor’s estate. Similarly, a principal purpose of the 
Bankruptcy Code is also to centralize disputes over the debtor’s assets 
and obligations in one forum, thus protecting both debtors and creditors 
from piecemeal litigation and conflicting judgments. Ease and 
centrality of administration are thus foundational characteristics of 
bankruptcy law. Moses v. CashCall, Inc., 781 F.3d 63, 72 (4th Cir. 2015) 
(internal quotations and citations omitted). 
 
Determining the property of the estate and providing one forum for all 
disputes is a critical part of the bankruptcy process and supports a principle purpose 
of the bankruptcy code. Fulfilling that purpose in th is instance involves a 
congressional mandate that supersedes the FAA. T he bankruptcy court had 
discretion to deny the motions to compel arbitration and did not abuse that discretion. 
 
 

 
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CONCLUSION 
For the foregoing reasons, IT IS ORDERED that the order of the bankruptcy 
court is AFFIRMED. 
New Orleans, Louisiana this _____ day of May 2026 
 
 
 
__________________________________ 
 WILLIAM J. CRAIN 
 UNITED STATES DISTRICT JUDGE 
 

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