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Rick D. Lange, Ch. 7 Trustee v. Charles W. Hoskins (In re TierOne Corp.), Ch. 7, BK10-41974-TLS, A13-4017-TLS (Oct. 4, 2013)

After the FDIC intervened in the Chapter 7 trustee's lawsuit alleging gross negligence and breach of fiduciary duty against officers and directors of the debtor holding company as well as of its subsidiary bank, the federal district court referred the case to the bankruptcy court. The trustee questioned the district court's subject matter jurisdiction, as the FDIC had not obtained leave from the bankruptcy court to intervene pursuant to the Barton doctrine. The bankruptcy court ruled that Barton may not apply to this case, and in the event it does, the court retroactively authorized the FDIC to intervene. The bankruptcy court also found that the resolution over the dispute as to whether the trustee or the FDIC owned certain causes of action against the defendants required the application of state law and federal non-bankruptcy law. Because bankruptcy law was not at issue, the matter belonged in the federal district court, and the bankruptcy court recommended withdrawal of the reference.

Date: 
Friday, October 4, 2013
Judge: 
Judge Thomas L. Saladino