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defendant, no allegation had been made that any transfer was made on account of a specific and identifiable antecedent debt owed by the debtor at the time of the transfer. Id. Lastly, Judge Gonzalez noted that the construction of Rule 8 is intended to weed out meritless cases at the commencement of discovery thereby minimizing expenditure of the judicial systems' resources on such cases. Id.
Although not a preference or fraudulent transfer case, the Eleventh Circuit Court of Appeals in Mukamal v. Bakes, 378 Fed.Appx. 890 (11th Cir. 2010), applied Twombly and Iqbal to a breach of fiduciary duty case and found that the complaint failed to meet those pleading requirements in the context of a creditor suit for breach of fiduciary duty against the directors and officers of the bankrupt company. Similarly, in Moser v. Dadyburjor (In re Sigma Systems, Inc.), Adv. Proc. No. 09-4126, 2010 WL 1903638 (Bankr. E.D. Tex. May 10, 2010), Judge Rhoades found that the complaint failed to meet the Twombly and Iqbal standards in the context of a "bankruptcy planning" fraudulent transfer and RICO case.
Finally, in Luster v. Greenhill Capital Partners, II, L.L.P. (In re CLK Energy Partners, LLC), Case No. 09-50616, 2010 WL 1930065 (Bankr. W.D. La. May 12, 2010), Judge Summerhays, also applied Twombly to a Section 544 action and found that the trustee had failed to articulate the applicable non-bankruptcy law upon which the Section 544(b) claim was grounded. In addition, the court dismissed, as being defective as pled, claims for breach of fiduciary duty and alter ego.
The pleading standard under Rule 8 has been altered and the old "no set of facts" standard under Conley has been "retired." Thus, trustees, committees, plan administrators and other estate fiduciaries must carefully consider the factual allegations contained within their complaints. It seems clear that the prior practice of "shotgun pleadings" will no longer be tolerated by the courts and that there will be a more particularized burden on plaintiffs to articulate the factual basis for the claim, not just to simply restate the elements of the statute. This type of slipshod pleading certainly lends itself to abuse by trustees and plan administrators and the courts' recent analysis of this issue reflects that concern.
H. Other Pleading Issues.
In Menninger v. Attiyah (In re Midwest Mobile Techs., Inc.), 304 B.R. 787 (Bankr. S.D. Ohio 2003), the court addressed the issue as to whether the third-party bank to which the allegedly preferential payment was made was an indispensable party in the adversary proceeding against the guarantors (the beneficiaries of the transfer). In Midwest Mobile, the trustee sought to recover approximately $439,000 in transfers made to KeyBank from
