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all creditors on notice of the cause of action. Summary judgment on judicial estoppel was inappropriate because questions of material fact existed as to the debtor's intent to manipulate the judicial system given that creditors were not prejudiced by the debtor's failure to disclose the cause of action.)
Res judicata
In re Dollie's Playhouse, Inc., 481 F.3d 998 (7th Cir. Apr. 9, 2007) (Debtor's adversary proceeding against former landlord for breach of fiduciary duty and conversion was barred by res judicata and full faith and credit statute pursuant to 28 U.S.C. § 1738, where Debtor and landlord had already litigated lease-related issues in state court.)
In re Insilco Tech., Inc., 480 F.3d 212 (3d Cir. Mar. 20, 2007) (Trustee's recharacterization and equitable subordination actions were barred by a settlement agreement entered into early in the case. The settlement agreement established that certain debts were allowable claims. Since a claim is, by definition, not equity, the settlement agreement barred the trustee's recharacterization action against the holders of the debts that were established as allowable claims. The settlement agreement, which released actions in respect of this debt, also barred the trustee's equitable subordination action because an equitable subordination action relates to the debt.)
Eastman Kodak Co. v. Atlanta Retail, Inc. (In re Atlanta Retail, Inc.), 456 F.3d 1277 (11th Cir. July 18, 2006) (Failure to raise state law claims in a Chapter 11 case does not bar creditor from bringing claims against co-creditor in a subsequent state court action. Pre-petition, Kodak agreed to subordinate its loans to those of other lenders. The debtor, allegedly as part of a secret agreement with secured creditors other than Kodak, later convinced Kodak to loan an additional $30 million that would be used to expand the debtor's business, but instead the debtor used the money to pay the secured lenders that had priority over Kodak. After the debtor filed a Chapter 11 petition, Kodak initiated a state court action against another secured creditor alleging breach of contract, fraud and tortious interference with contract. Kodak did not raise these claims in the debtor's bankruptcy case even though the bankruptcy court applied the subordination agreement between Kodak and other creditors and confirmed a plan that set the priority of creditors. The state court defendant and the debtor obtained an injunction from the bankruptcy court barring the state court action. The Eleventh Circuit reversed, finding claim preclusion inapplicable. The court found that the equitable subordination and breach of contract damages that Kodak sought were not potential remedies in the contested matters that the bankruptcy court heard, and even though Kodak could have brought an adversary proceeding on these claims, it was not required to do so unless the claims raised in the bankruptcy case arose from the same cause of action as the state court case. Here, the court stated, the two proceedings were not based on the same cause of action because the crucial facts to the state court action - the alleged fraud perpetrated against Kodak - were ever placed before the bankruptcy court. The creditor could have
