⇐  2014 Index  |  ⇐  TOC  |  Next Page   ⇒

2014 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

Liquidating Chapter 11 Cases and Liquidating Trusts

By William L. Norton III, Shari L. Heyen, David Lander

 

under section 1123(b)(3)(B) to properly reserve a claim or cause of action for post-confirmation enforcement.

Plan retention provisions identifying claims and causes of action by type or category have been held sufficiently specific under section 1123(b)(3)(B). See, e.g., USN, 280 B.R. at 591 (finding plan provision giving liquidating trust exclusive right to prosecute any and all causes of action, including avoidance actions, sufficiently demonstrated intent to preserve rights of liquidating trustee to enforce preference actions and satisfied section 1123(b)(3)(B)); Ampace Corp., 279 B.R. at 156-62 (finding general reservation of right to pursue all avoidance actions and transfers recoverable under section 550 of Bankruptcy Code was sufficient); see also In re Weidel, 208 B.R. 848, 851-52 (Bankr. M.D. N.C. 1997 (post-confirmation objection to claim not barred by res judicata where plan expressly reserved general right to bring post-confirmation objections to claims). Courts upholding the adequacy of such retention provisions reason that plan confirmation often occurs before complete identification of all claims and causes of action, especially in large chapter 11 cases where it can take years to fully and finally determine and adjudicate all claims and causes of action. See, e.g., Associated Vintage Group, Inc., 283 B.R. 549, 564 (B.A.P. 9th Cir. 2002) ("We agree with the other courts that regard it as impractical and unnecessary to expect that a disclosure statement and plan must list each and every possible defendant and each and every possible claim."); Ampace Corp., 279 B.R. at 159 ("Indeed, in large chapter 11 cases, the investigation and litigation of all possible avoidance actions to final judgment can take years. To force the debtor to remain in bankruptcy until a final determination of all possible preference actions is made would act as a detriment to both the debtor and its creditors by slowing down the reorganization process."). See also Weidel, 208 B.R. at 852

 

 

⇐  2014 Index  |  ⇐  TOC  |  Next Page   ⇒

Copyright 2009 Norton Institutes