Settlement of Claim Precludes Avoidance Litigation

Case management in large and complex chapter 11 bankruptcies has never been easy. Successfully navigating the morass of filing requirements and deadlines contained in the Bankruptcy Code, its accompanying procedural rules and various local court rules can be challenging. When added to the remaining issues that routinely need to be addressed during the course of a case — among many others, claims resolution, development of a business plan and plan of reorganization, analysis of executory contracts and investigation of potential litigation claims — the array of activities that must be carefully coordinated can be daunting.

Judging by a series of bankruptcy court decisions issued during the last two years, chapter 11 debtors and their professionals may have even more cause for consternation. The rulings concern the interplay between the claims resolution process and the estate’s ability to prosecute avoidance actions against its creditors. They underscore the need for careful