  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
dismiss the claims as "preempted" by SLUSA.35 The district court granted the defendant's motion to dismiss, concluding that SLUSA preempted the claims from being prosecuted by a litigation trust on behalf of the debtor's stockholders.
The Third Circuit reversed, placing the trust's claims into two categories: the derivative claims, and the Swiss money-laundering claims. SLUSA did not preempt the derivative claims because those claims belonged to the debtor, said the court. The damage sought by the trust were thus sought "on behalf of" one person -- the debtor. The facts that the debtor's stockholders had standing to pursue the derivative action on behalf of the debtor, and that the stockholders agreed to allow the debtor to assign the claims to the litigation trust for ease of prosecution was of no consequence to the SLUSA analysis. The court further held that SLUSA did not preempt the Swiss money-laundering claims because, in enacting SLUSA, Congress did not intend to preempt claims arising under foreign law. Instead, the court concluded, SLUSA only preempted claims arising under state common law or state statutory law. While the Swiss money-laundering claims sought damages on behalf of more than 50 persons, they were not based on state law. Instead, the court concluded that they were based on Swiss law.
* Official Comm. of Unsecured Creditors v. Halifax Fund, L.P. (In re Appliedtheory
Corp.), 493 F.3d 82 (2d Cir. July 2007) (per curiam) Another blow to committees under STN and Commodore. The unsecured creditors' committee sought permission to bring an action under section 510(c) against the debtor and several pre-petition lenders for equitable subordination. The Second Circuit, however, declined to create a bright-line exception to the STN doctrine. Said the court, where the chapter 11 trustee has investigated the potential claim and deemed it to be without merit, the bankruptcy court was justified in refusing to authorize the committee to pursue the action on its own. One thing to note about this opinion was a comment made in dicta. "Since the Committee is not itself a creditor, it does not have any rights held by any creditor to assert." Does that mean only individual creditors can assert subordination claims?
* Medlin v. Wells Fargo Bank, N.A. (In re I.G. Servs., Ltd.), --- B.R ---, 2008 WL 783551 (Bankr. W.D. Tex. Mar. 2008) (Clark, J.)
Res judicata did not bar investors' direct claims that were based on same facts as estate's claims which had already been adjudicated. Generally speaking, claims for the breach of a fiduciary duty owed by officers or directors to a debtor corporation -- which creditors generally have standing to assert as derivative actions once the corporation enters the "zone of insolvency" -- are property of the bankruptcy estate and can be brought by the estate's trustee or the debtor in possession. If the fiduciary duty arises from a direct relationship between defendants and a discrete group of creditors, on the other hand, claims for the breach of that
35 SLUSA does not preempt claims as such, but merely requires the dismissal of claims that look like ordinary state law causes of action and prevents them from being prosecuted in federal courts through a class action vehicle when the claims should be prosecuted individually under state law. The point of the Act apparently is to reduce the number of strike suits from being filed. The two requirements considered by the Third Circuit in this opinion were whether (1) the claims asserted seek damages on behalf of more than 50 persons; and (2) the claims are based on state law.
