Wooley, et al v. Faulkner, et al

Debtors, Schlotzsky's Inc. and certain affiliates, filed for Chapter 11 bankruptcy protection and appellants were one of the creditors. On appeal, appellants challenged the denial of their motion to pursue post-confirmation causes of action on behalf of the reorganized debtor. The court concluded that the joint plan of liquidation (Plan) did not specifically reserve the state law claims that appellants wished to assert. Without this specific reservation, the Plan Administrator - and, by extension, appellants - lacked standing to pursue the proposed claims. Thus, the claims were not colorable, and the bankruptcy court did not err in denying appellants' motion to pursue causes of action on behalf of debtors. Accordingly, the court affirmed the judgment. View "Wooley, et al v. Faulkner, et al" on Justia Law