New Cases For the Week of October 17, 2011 - October 21, 2011

 

October 21, 2011

In re Superior Offshore International, Inc.
(DBN)
Bankr. SD TX A tort claimant's late proof of claim was disallowed and the the debtor's plan, containing a plan injunction which barred the tort claimant's claim against the debtor, was confirmed. The tort claimant then sought modification of the plan injunction to proceed in non-bankruptcy court solely against the debtor's insurance. The debtor opposed the motion, asserting that the injunction modification would amount to a plan modification, which was not warranted. The court holds that the injunction modification would be an impermissible plan modification. Nevertheless, the tort claimant was entitled to proceed solely against the debtor's insurance. Since the debtor was merely a nominal party in the tort claimant's litigation, the plan injunction did not bar the claim (against the insurer).
     

October 18, 2011

In re: Yazoo Pipeline Co., L.P.
(DBN)
Bankr. SD TX A trustee owns only fraud claims held by the debtor, not claims owned by creditors. To state a cognizable claim by the debtor for fraud occurring during a bankruptcy case, a trustee must plausibly aver that each element of fraud with respect to the estate. Here, the plaintiff/trustee fails to plead fraud against the debtor or the estate. Although the trustee's complaint alleges numerous misrepresentations, it does not specifically allege that any of these representations were made to the estate or the trustee. Because the trustee does not allege that misrepresentations were made to the estate or the trustee, he fails to adequately plead: (i) the defendants' intent that the estate or trustee should rely, (ii) the estate or trustee's reliance, and (iii) resulting injury to the estate. Where the complaint alleges only that misrepresentations were made "to the Court and creditors," a cognizable fraud claim belonging to the estate has not been averred.
     
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