Smack-Down Of A Straitjacket

Postconfirmation liquidation and litigation trusts have become an important mechanism in a chapter 11 bankruptcy estate's arsenal, allowing for the resolution of claims and interests without needlessly delaying confirmation in the interim. The specter of postconfirmation litigation may seem unremarkable. Section 1123(b)(3)(B) of the Bankruptcy Code states that a plan may provide for retention or enforcement by the reorganized debtor, the trustee, or a representative of the estate of any claim or interest belonging to the estate. However, the provision does not specify the manner in which the retention of any such claims or interests should be drafted and disclosed to other parties - leaving to the courts the question of the level of specificity and detail required. A recent decision handed down by a Texas bankruptcy court, In re MPF Holdings US LLC, 443 B.R. 736 (Bankr. S.D. Tex. 2011), suggested that in that district at least, the level of specificity and detail