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.

18 minute read September 23, 2003 at 11:38 PM
By
Scott D. Cousins and Luis Salazar
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 Cybergenics Corp. v. Chinery,

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