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Robert A. Sears v. Rhett R. Sears (In re AFY, Inc.), Ch. 7, BK10-40875, A14-4060 (Mar. 7, 2016)

The court granted the defendants' motion to dismiss an adversary proceeding resulting from a long-running family dispute. In doing so, the court recognized that the plaintiffs were attempting to relitigate previously discounted and disallowed causes of action under new theories of recovery and new legal articulations. The court pointed out that res judicata precluded the plaintiffs' breach of contract allegations, which were simply a reiteration of the plaintiffs' previously overruled objections to the defendants' proofs of claims, as well as the breach of fiduciary duty claim that was merely the breach of contract claim in a different guise. The court also disposed of the plaintiffs' breach of loyalty claim by noting that only the debtor corporation has standing to pursue it under the shareholder standing rule. Finally, the court reminded litigants of the importance of the bankruptcy process and the dim view taken of those who try to attack the integrity of the system.

Date: 
Monday, March 7, 2016
Judge: 
Judge Thomas L. Saladino