New Cases For the Week of May 26, 2003 - May 30, 2003

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May 30, 2003

Case

Court

Holding

Official Committee of Unsecured Creditors of Cybergenics Corp., v. Chinery
(DBN Subscription Required)
3rd Cir. The United States Supreme Court in Hartford Underwriters Ins. Co. v. Union Planters Bank, 530 U.S. 1 (2000) does not operate to prevent the Bankruptcy Court from authorizing a creditors' committee to pursue the estate's causes of action for the benefit of the estate, under appropriate circumstances.

May 29, 2003

Case

Court

Holding

In re FBI Distribution Corp.
(DBN Subscription Required)
1st Cir. A Chapter 11 debtor in possession was not required to pay in excess of $1.2 million in severance pay, pursuant to the terms of two prepetition contracts, as an administrative expense to an executive who was terminated after rendering post-petition services.
In re Cantrell
(DBN Subscription Required)
9th Cir. Although officers and directors of California corporations are imbued with the fiduciary duties of an agent and certain duties of a trustee, they are not trustees with respect to corporate assets. California corporate law simply does not provide the same trust relationship between corporate principals and the corporation as California partnership law provides between partners and a partnership. The mere fact that a debtor was an officer or director of a California corporation therefore does not make the debtor a fiduciary for purposes of nondischargeabilty under 11 USC 523(a)(4).

May 27, 2003

Case

Court

Holding

40235 Washington Street Corporation v. Lusardi
(DBN Subscription Required)
9th Cir. Section 549(c) does not create an exception to section 362(a).

The district court did not err in quieting title in the debtor to property that was sold postpetition at a tax foreclosure sale in violation of the automatic stay, even though the debtor's bankruptcy was dismissed for bad faith shortly afterward.  Actions in violations of the stay are void. 

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