As the holder of the $45 million note, the selling corporation is the largest unsecured creditor in the bankruptcy proceeding. The seller brings this action asserting claims based on a variety of legal theories including breach of fiduciary duties, fraud, and civil conspiracy. The Court concluded that most of the plaintiff’s claims are barred as a matter of law because they are derivative in nature, not direct, and thus belong to the bankruptcy estate. Derivative claims cannot be used by a single creditor to upset the structured bankruptcy process. The Court dismissed Count II on the alternative ground that is failed to state a cognizable legal claim. There are fundamental differences between this case and Production Resources, a decision which relied heavily on its unique facts. As is clearly evident in Production Resources, all the challenged transactions occurred in the context of an already insolvent company. In contrast, the amended complaint in this case only attempts to allege that HCC became insolvent after, and as a result of, the 2002 transaction. The Plaintiff in this case had no right to repayment of its debt at the time of the challenged transaction.
