A truism of bankruptcy is that assets available to pay creditors are few and far between. Among them are causes of action, and thus both debtors and trustees rightly hoard the right to sue third parties.
The Wagoner Doctrine Keeps Rolling
A truism of bankruptcy is that assets available to pay creditors are few and far between. Among them are causes of action, and thus both debtors and trustees rightly hoard the right to sue third parties. Does the debtor or trustee have standing to sue when the entity brought the harm upon itself? Generally, the answer is no, and thus in this present environment of corporate misdeeds and scandals, litigation against outsiders is foreclosed by the debtor's own misfeasance.
By
A. Michael Sabino And Lawrence A. WanderThis premium content is locked for The Bankruptcy Strategist subscribers only
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