The district court dismissed plaintiff's amended complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure on the ground that the amended complaint's allegations of injury to the creditors of Torch Offshore, Inc.; Torch Offshore, L. The complaint alleged that the Directors breached fiduciary duties owed to Torch's creditors when Torch entered the zone of insolvency and after it became insolvent. (In re Katrina Canal Breaches Litig.), 495 F.3d 191, 205 (5th Cir.2007). The plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Although plaintiff has standing, it fails to state a claim for which the court may grant relief. The court's confirmation order and the trust agreement named Bridge Associates as the administrator and trustee of the Trust. Ch.2004) (“In the Malone context, a plaintiff had to prove that the directors ‘knowingly disseminate[d] false information.’ This level of proof is similar to, but even more stringent than, the level of scienter required for common law fraud.” (alternation in original)); A. Typically, we review the district court's decision not to grant leave to amend for abuse of discretion. Liberty Life Assurance Co., 394 F.3d 262, 268 (5th Cir.2004). The Plan Administrator and Trustee is expressly authorized to settle and compromise ․ the D&O Claims without further Bankruptcy Court approval․Liquidating Trust Agreement at 6, In re Torch Offshore, Inc., Nos. The Plan defined D&O claims as “any claims arising prior to January 7, 2005 [the date Torch filed its chapter 11 petition] and recoveries against the Debtors' directors, officers, and other principals which are related to the Debtors' D&O insurance.” The parties do not dispute that the breach of fiduciary duty claims at issue on appeal are D&O claims. Procedural Background On January 5, 2007, Bridge Associates filed a complaint on behalf of the Trust against Torch's former directors and officers (the “Directors”). When considering a Rule 12(b)(6) motion, we “accept[ ] all well-pleaded facts [of the complaint] as true, viewing them in the light most favorable to the plaintiff.” In re Katrina Canal Breaches Litig., 495 F.3d at 205 (quotation marks and citation omitted). As the trustee, Bridge Associates may bring D&O claims that were part of debtor's estate on behalf of the Trust; it need not allege a derivative suit based on either shareholder or creditor derivative standing. 595 (1946) (“The claim sought to be enforced in a derivative suit may be an important asset of the estate.”); La. To administer the estate and the Trust, the Plan provided for the appointment of a Plan Administrator and Trustee, which was granted the “rights and powers of a debtor-in-possession under Section 1107 of the Bankruptcy Code,” including the duty “to prosecute any D&O Claims and distribute the proceeds of such claims,” and other rights and powers set forth in the Liquidating Trust Agreement. Reaching this conclusion, we refrain from wading into the parties' contentions regarding the district court's other bases for dismissal. Remand to Amend Plaintiff asks us to remand to allow it to amend its amended complaint to allege injury to Torch. The trust agreement likewise authorized trustee action: The Plan Administrator and Trustee shall be empowered to and ․ may, [sic] take all appropriate action with respect to the Liquidating Trust Assets consistent with the purpose of the Liquidating Trust, including, without limitation, the filing, prosecution (including objections), estimation, settlement or other resolution of ․ D&O Claims ․ and oversee the management of any Liquidating Trust Assets. In an attempt to comply with Rule 23.1 of the Federal Rules of Civil Procedure, plaintiff alleged that it “was neither a shareholder or nor [sic] a creditor of Torch at the time the transactions complained of occurred but represents the interests of the shareholders and creditors of [Torch]”; that “[w]ritten demand was made upon the Directors of Torch by counsel for the Official Committee of Unsecured Creditors of Torch”; and that “[p]laintiff has not made demand upon the Directors nor shareholders of Torch to undertake the prosecution of this action because (i) the Plan and the Confirmation Order have vested the right to bring the action in the plaintiff; (ii) there are no Directors of Torch; (iii) the shareholders can take no action to force the Directors to sue, there being no directors; and (iv) plaintiff is the only legal person who can bring this action.” (See Am. We affirm because the amended complaint fails to allege injury to Torch Offshore, Inc.; Torch Offshore, L. The Trust was comprised of “all property of the Debtors' Estates which has not previously been transferred.” The confirmation order and trust agreement appointed Bridge Associates L. The Plan, confirmation order, and trust agreement preserved and transferred, inter alia, certain claims against Torch's directors and officers (“D&O claims”) to the Trust, authorized Bridge Associates to retain and prosecute those claims, and empowered it to distribute to creditors any recovery of claims proceeds. In so doing, they misconstrue the nature of Bridge Associates's standing to assert the claims. As part of that transfer, the Plan and the court's order expressly preserved and transferred all D&O claims. We conclude that the amended complaint thus fails to state a claim for breach of the fiduciary duties that the Directors owed to Torch. Consequently, the creditors of an insolvent corporation have standing to maintain derivative claims against directors on behalf of the corporation for breaches of fiduciary duties. at 101-02 (quotation marks and footnotes omitted).5.
was driven out of business by three Chinese companies that conspired to dominate the American solar market, the bankrupt company's liquidating trustee alleged in a $950 million antitrust lawsuit filed Friday.
Liquidating trustee John Madden filed the lawsuit in Michigan federal court, claiming Trina Solar Ltd., Yingli Green Energy Holding Co.
Law360, New York (July 20, 2011, PM ET) -- The trustee for the bondholders' liquidating trust of bankrupt broadband provider At Home Corp. At Home declared bankruptcy in September 2001 and the trusteeship was created in 2002.
In the intervening period, the Delaware Supreme Court issued its opinion in North American Catholic Educational Programming Foundation, Inc. Gheewalla, thereby, rendered meritless plaintiff's claim that the Directors breached fiduciary duties owed to Torch's creditors. The court determined that “[t]he Gheewalla court was specific in its findings that such direct claims as these by creditors are not actionable,” id. This ill-conceived pleading posture distracts from Bridge Associates's standing as trustee to bring a direct suit on the Trust's behalf for Torch's claims against the Directors. (In re Mortgage America Corp.), 714 F.2d 1266, 1274 (5th Cir.1983). Under Rule 15, the courts consider such equitable factors as “(1) undue delay; (2) bad faith; (3) dilatory motive on the part of the movant; (4) repeated failure to cure deficiencies by any previously allowed amendment; (5) undue prejudice to the opposing party; and (6) futility of amendment.” Ellis, 394 F.3d at 268. 08-30364, 2009 WL 117944, at *2 (5th Cir.2009) (affirming denial of a motion for leave to amend where “[a]ppellants had several opportunities to state their best case”) (citing Price v.
(argued), Lemle & Kelleher, LLP, New Orleans, LA, for Torch Liquidating Trust. Robert Joseph Burns, Jr., Perry, Atkinson, Balhoff, Mengis & Burns, Baton Rouge, LA, for XL Specialty Ins. Torch Liquidating Trust, through its trustee Bridge Associates L. C., brings this suit alleging breach of fiduciary duties by the officers and directors of Torch Offshore, Inc.; Torch Offshore, L. After Bridge Associates clarified that it was not alleging fraud but instead only breach of fiduciary duties, the court denied defendants' motion. In Gheewalla, the court held that “the creditors of a Delaware corporation that is either insolvent or in the zone of insolvency have no right, as a matter of law, to assert direct claims for breach of fiduciary duty against the corporation's directors.” Id. The court reasoned that “the general rule is that directors do not owe creditors duties beyond the relevant contractual terms.” 930 A.2d at 99 (quotation marks and footnotes omitted). The district court therefore did not abuse its discretion in denying plaintiff an opportunity to amend. Standing The Trust, through its trustee Bridge Associates, attempts to allege-in the form of a shareholder and creditor derivative suit-that the Directors breached their fiduciary duties. Under Delaware law, “[d]irectors owe their fiduciary obligations to the corporation and its shareholders.” Gheewalla, 930 A.2d at 99 (citing Malone v. Rule 15 of the Federal Rules of Civil Procedure states that a court “should freely give [leave to amend] when justice so requires.” “Although Rule 15 evinces a bias in favor of granting leave to amend, it is not automatic.” Southmark Corp. Schulte Roth & Zabel (In re Southmark Corp.), 88 F.3d 311, 314 (5th Cir.1996) (quotation marks and citation omitted).
Patron, Christopher Kent Ralston, Phelps Dunbar, New Orleans, LA, for Lyle Stockstill, Lana Stockstill, Michel, Shopf, Wallace, Lemons, Fulton. They sought the latter in part because the complaint appeared to allege fraud, which under Rule 9(b) of the Federal Rules of Civil Procedure requires plaintiff to state with particularity the circumstances constituting fraud. DISCUSSION We review de novo the district court's order granting a motion to dismiss for failure to state a claim under Rule 12(b)(6). As the district court recognized, when plaintiff amended its complaint, it failed to allege a claim on behalf of Torch and continued to maintain what appear to be impermissible direct claims on behalf of creditors, now clothed in the unnecessary pleadings of a derivative action (ostensibly, but never expressly, on behalf of Torch). Pursuant to section 1123, therefore, Bridge Associates has standing to bring D&O claims on behalf of the Trust for injuries to Torch. Merits Even excusing the amended complaint's confusing construction of plaintiff's standing, however, dismissal pursuant to Rule 12(b)(6) was still appropriate because plaintiff fails to allege a cause of action on behalf of Torch for breach of the Directors' fiduciary duties. “When the directors are not seeking shareholder action, but are deliberately misinforming shareholders about the business of the corporation, either directly or by a public statement, there is a violation of fiduciary duty.” Malone, 722 A.2d at 14. The elements of a claim for misrepresentation of a corporation's financial condition where no shareholder action is requested are: (1) deliberate misinformation either directly or through public statement; (2) reliance; (3) causation; and (4) actual, quantifiable damages. at 12, 14 (comparing an action for breach of fiduciary duty “[w]hen the directors are not seeking shareholder action, but are deliberately misinforming shareholders about the business of the corporation” with “[a]n action for a breach of fiduciary duty arising out of disclosure violations in connection with a request for stockholder action[,which] does not include the elements of reliance, causation and actual quantifiable monetary damages” (emphasis added)); Metro Commc'n Corp. Even assuming that plaintiff has properly raised and preserved the issue, we conclude that it is not entitled to relief.
Defendants moved to dismiss the complaint or for a more definite statement. We may affirm dismissal on any basis supported by the Rule 12(b)(6) record. It argues that it is attempting to assert a breach of fiduciary duties owed to Torch but fails to allege necessary elements of such a claim-specifically, but not limited to, injury to Torch. Under the Plan, the court's confirmation order, and the trust agreement, Bridge Associates was to distribute proceeds of the Trust's assets according to the Plan, which allocated the proceeds of D&O claims to debtor's unsecured creditors by pro rata share. Yet, at no point did plaintiff move the district court for leave to amend its amended complaint to allege a claim showing injury to Torch.
in New York on Tuesday over their alleged infringement of four patents for Internet Protocol television. Williamson of Flemming Zulack Williamson Zauderer LLP, is tasked with recovering assets for investors in the now-defunct At Home's debt.
Wiliamson alleges AT&T and Verizon are infringing U.