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Law360 Guest Column: Interpreting In Re United Operating
The Fifth Circuit has been presented with two bankruptcy court decisions on how much detail must be contained in a plan to enable a post-petition trustee or reorganized debtor to prosecute claims against third parties which arose before the bankruptcy case was filed.
According to the Fifth Circuit’s decision in In re United Operating, a trustee or reorganized debtor lacks standing to pursue claims against third parties which arose before the bankruptcy case was filed, unless specific and unequivocal retention language is included in the plan.
The United Operating decision is premised on providing creditors with sufficient information to cast an informed and intelligent vote on a plan. The Bankruptcy Courts for the Northern District of Texas and the Southern District of Texas, however, have recently issued decisions on the level of disclosure required by United Operating. Both have been appealed to the Fifth Circuit. A decision has been issued in one, and the appeal is currently pending in the other.
Excerpt from Law360, Sept. 8, 2011. To view the full article, click here (subscription required).