Can the Claims of Individual Creditors Be Assigned to a Litigation Trust for Prosecution?

Last month, we asked the question: Can a plan provide that the securities claims ' which are not estate causes of action because they belong to the bondholders individually, not to the company ' will be assigned to a trust so that the trust can efficiently litigate these claims and distribute the proceeds thereof to the bondholders? As we stated last month, the issue can be traced back to the Supreme Court's decision in Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416 (1972). In Caplin, a bankruptcy trustee under the now superceded Bankruptcy Act sought to assert claims against an indenture trustee on behalf of the estate's bondholders. The Court held that the trustee lacked standing to do so. The Court found no statutory authority that would permit a trustee to assert creditor claims without creditor consent. Id. at 428.