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possession. In some cases, § 1123(b)(3) of the Code allows a reorganized debtor to bring certain post-confirmation lawsuits based on claims or interests belonging to the estate. However, to preserve a debtor's standing, the plan must expressly provide that the reorganized debtor retains the right to enforce the claim. § 1123(b)(3)(B); In re Paramount Plastics, Inc., 172 B.R. 331, 333 (Bankr. W.D. Wash. 1994).
Reasoning: Neither the plan's blanket retention of any and all claims arising under the code, nor its retention of certain specific claims was sufficient to preserve the common-law claims brought by the debtor in this case. Additionally, a court's retention of jurisdiction is also insufficient to provide the debtor with standing. Moreover, here, the debtor has no standing to sue because its liability - to both its creditors and to its guarantors - was discharged after confirmation of the plan.
Facts: The defendants are various lenders against whom the Adelphia Recovery Trust (the "ATR") is suing based on claims arising from the chapter 11 cases. A large subset of the defendants (the "Lenders") move to dismiss the statutory bankruptcy avoidance claims and the equitable subordination and disallowance claims (the "Claims") and allege that the ATR lacks standing to sue. Title to the Claims was transferred from the Creditors' Committee when the First Modified Fifth Amended Joint Chapter 11 Plan for Adelphia Communications Corporation and Certain Affiliates (the "Joint Plan") was confirmed in January 2007. The Claims seek relief based on loan obligations and security interests that were addressed in the Joint Plan, under which all creditors of the debtors addressed in the Joint Plan (the "Obligor Debtors") were fully paid.
Issues: "Whether the ATR has standing to bring the Bankruptcy Claims if recovery would benefit none of the creditors of the Obligor Debtors when these creditors have been paid in full under the terms of the Joint Plan."
Rules: "It is well settled in the Second Circuit, that avoiding powers may be exercised by a debtor in possession only for the benefit of creditors, and not for the benefit of the debtor itself."
Holding: The ATR does not have standing to bring the Bankruptcy Claims, and they are therefore dismissed.
Reasoning: Because the Joint Plan provides that all of the creditors of the Obligor Debtors have been paid in full, and all intercompany claims are resolved, under principals of federal jurisdiction, "a party does not have standing to sue where the party is not able to allege an injury that is likely to be redressed by the relief sought."
Facts: Arch Wireless, Inc. (the "Debtor") and Nationwide Paging, Inc. ("Nationwide") had a prepetition business relationship. Also prepetition, the parties had some trouble with their dealings which was articulated by the parties in a series of letters and emails. Arch filed chapter 11 in December 2001 and failed to list Nationwide as a creditor. Nationwide did not receive any notices in the bankruptcy case and did not appear in the bankruptcy. Notice of the bar date was both mailed to the listed creditors and published in national newspapers. The plan was confirmed in May 2002 and included a discharge injunction for prepetition claims. Post-confirmation litigation ensued in the Massachusetts Superior Court and, after Nationwide refused to withdraw its state claims, the Debtor
