Much to the relief of many in the Third Circuit, its long-awaited en banc ruling in the Official Committee of Unsecured Creditors of Cybergenics Corp. v. Chinery,
Sigh of Relief: Derivative Actions Safe for Now
Much to the relief of many in the Third Circuit, its long-awaited en banc ruling in the Official Committee of Unsecured Creditors of <i>Cybergenics Corp. v. Chinery</i>, (<i>en banc</i>) No. 01-3805 (May 29, 2003) disagreed with the decision of one of its panels and upheld the right of parties other than a debtor or trustee to pursue avoidance actions under the Bankruptcy Code on a derivative basis. In doing so, the court supported the well-established practice allowing these derivative actions, and eschewed a slavish plain-language interpretation of Section 544(b) in favor of a broader, multi-section reading.
By
Scott D. Cousins And Luis SalazarThis premium content is locked for The Bankruptcy Strategist subscribers only
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