In re Buafo (Ch. 11 Case No. 16-51087, Adv. No. 16-05025)
Defendant filed motion for summary judgment on Plaintiffs’ complaint for equitable subordination on the basis that claim and issue preclusion barred relitigation of facts and issues previously decided in district court. The Court held that claim preclusion did not bar Plaintiffs’ equitable subordination claim because that claim is derived from bankruptcy code and could not have been brought in the district court action. However, the Court granted the Defendant’s motion based on issue preclusion, as the Plaintiffs’ asserted bases for equitable subordination had been brought before and ruled on (in the Defendant’s favor) by the district court.
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Wednesday, May 3, 2017