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2014 NORTON BANKRUPTCY LAW SEMINAR MATERIALS

Liquidating Chapter 11 Cases and Liquidating Trusts

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

 

("confirmation process is expedited by allowing a general reservation of rights to serve as notice to creditors that their claims may be challenged.").

Other courts apply a more stringent standard and require that plan retention provisions state with some specificity the claims and causes of action the debtor intends to preserve, including the parties against whom those claims and causes of action may be asserted. See, e.g., Browning, 283 F.3d at 774 (reservation that did not name the defendant or state factual basis for breach of fiduciary claim did not defeat res judicata); D&K, 112 F.3d at 261 ("identification must not only be express, but also the claim must be specific."); Preferred Prescription, 266 B.R. at 277 ("the plan must expressly reserve the right to pursue that particular claim post- confirmation") (emphasis in original); In re A.P. Liquidating Co., 283 B.R. 456, 460 (Bankr. E.D. Mich. 2002) (holding plan retention provision that provided for general reservation of rights and did not identify debtor's claim against defendant as not sufficiently specific); Huntsville Small Engines, 228 B.R. at 13 (preference action not reserved because plan only contained general retention clause preserving debtor's right to pursue claims and causes of action post-confirmation without specifically identifying cause of action against defendant); Westland Oil Dev. Corp. v. MCorp Mgmt. Solutions, Inc., 157 B.R. 100, 103 (S.D. Tex. 1993) (holding res judicata barred claim brought post-confirmation where debtor buried known cause of action in general reservation clause in plan; bankruptcy code requires that debtor adequately disclose fully and precisely all information creditors would reasonably want before voting on plan); see also Goldin Assocs., 2004 WL 1119652 at *3 (although reservation clause in plan was blanket provision, and thus insufficient by itself to preserve debtor's claims, disclosure statement detailing specific causes of action plaintiff was pursuing against defendants was sufficiently

 

 

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