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in his individual capacity, and that is what the debtor's principal reasonably and subjectively believed.
* Notinger v. Costa (In re Robotic Vision Systems, Inc.), 373 B.R. 159 (Bankr.
D.N.H. Aug. 2007) (Deasy, J.) Trustee set forth adequate allegations to overcome the presumptions of the business judgment rule and the debtor's exculpatory charter provision. A New Hampshire bankruptcy court, considering Delaware corporate law, held that the trustee's complaint against several former directors set forth sufficient allegations which called into question the directors' independence. These allegations, said the court, were sufficient to overcome the presumption of the business judgment rule. Additionally, the trustee alleged that one director/officer had engaged in self-dealing and obtained illegal personal benefits such as granting himself a security interest in the debtor's assets. The court found that the complaint set forth plausible facts for breaches of loyalty and good faith, which were not protected by the debtor's exculpatory charter provision. Furthermore, the complaint sufficiently distinguished between acts of the board as a whole and those acts which can be charged to the individual officer or director. However, the court granted the motions to dismiss to the extent that the complaint alleged actions against individuals before or after the their respective tenures on the board.
* Oscher v. The Solomon Tropp Law Group, P.A. (Atlantic Int'l Mortg. Co.), 373 B.R. 159 (Bankr. M.D. Fla. Aug. 2007) (Paskay, J.)
Trustee was awarded costs and fees as a sanction against the debtor's former general counsel. After the bankruptcy court ordered a default judgment against the debtor's former general counsel and further ordered sanctions against the firm, the court held a hearing to determine the proper award for the trustee as a sanction against the defendant. The court held that the trustee's compensable costs included: (1) its attorney's fees incurred as a result of this appeal and its prosecution; (2) the fees incurred in dealing with the defendant's discovery misconduct, which contributed to the court's decision to enter the default judgment; and (3) the fees and costs incurred in pursuing the trustee's motion for default judgment and other sanctions. The court noted that strict conformance with standards germane to typical fee applications was not required based on the atypical circumstances at bar. The court further explained that the fees incurred by the trustee in pursuing this action were so incurred post-confirmation, and so counsel for the trustee was no longer subject to the U.S. Trustee Guidelines for billing practices. Based on these circumstances, the court found it reasonable to award the trustee $341,028.90, noting that this amount was only a small fraction of what the defendant's misconduct had caused.
* Murray v. Royal Alliance Assocs., 375 B.R. 208 (M.D. La. July 2007) (Brady, J.) Chapter 11 trustee was in pari delicto due to the debtor's Ponzi scheme. The district court granted the defendant's motion to dismiss because the plaintiff trustee stood in the shoes of the debtor whose former principal was the perpetrator of a massive fraudulent scheme. Said the court, the trustee could not seek damages from another party for damages caused to the debtor by the debtor. The court also allowed the defendant to amend its third-party complaint against
