Fifth Circuit Expands Documents Applicable To Determining Claim Preservation

This article originally appeared in The Legal Intelligencer and is republished with permission from law.com

In a matter of apparent first impression, in Spicer v. Laguna Madre Oil & Gas II LLC (In re Texas Wyoming Drilling Inc.), the 5th U.S. Circuit Court of Appeals held in an opinion dated July 21 that it was permissible to consider both a plan of reorganization and its accompanying disclosure statement when determining whether a debtor had sufficiently preserved certain causes of action pursuant to § 1123 of the Bankruptcy Code.

In Spicer, a dispute arose concerning whether Texas Wyoming Drilling Inc. (the debtor) had standing to prosecute certain claims against Laguna Madre Oil & Gas II LLC. Following approval of the debtor's disclosure statement and a few months after confirmation of the debtor's plan, the debtor commenced suits against various former shareholders, including Laguna, seeking to avoid and recover as constructively fraudulent transfers certain