The Eighth Circuit held today that a bankruptcy trustee has standing to sue third parties for harm to the debtor in bankruptcy despite a possible in pari delicto defense.  The court rejected the Second Circuit’s approach, which treats in pari delicto as a standing-killer.   In re Senior Cottages of Am., LLC (Moratzka v. Morris), No. 05-3867 (8th Cir. Apr. 2, 2007) (applying Minnesota law).

Barry Barnett

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