Katie Holmes-Tom Cruise divorce drama in the Big Apple

The Katie Holmes-Tom Cruise divorce frenzy is set to go down on New York soil.

According to RadarOnline.com, proceedings will take place in NYC, where Holmes filed last week for divorce from her hubby of almost six years, even though Cruise reportedly wants to move the case to California because it may be easier for him to fight Holmes' desire for sole custody of the couple's 6-year-old daughter, Suri.

"This is an obvious setback, and Tom is livid that Katie is calling all the shots," a source close to the situation told RadarOnline.com.

Holmes' bold custody move has speculation flying that she does not want her daughter raised in the controversial Church of Scientology, of which Cruise is a big believer and outspoken follower. According to reports, children usually begin their formal Scientology education around Suri's age.

Since before filing for divorce, Holmes has been staying with Suri in a swanky Chelsea pad that reportedly rents for upward of $12,000 a month. And Holmes certainly hasn't been hiding since news of the divorce broke: She and Suri have been spotted all over town - in the East Village at ice cream shop Sundaes and Cones, at Whole Foods in Chelsea and, on Thursday, at the Children's Museum of the Arts.