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ARTICLE · 20 MAY 2014

Courts Confirm Bankruptcy Trustees' Power

In In re Amerlink, Ltd., a Chapter 11 Trustee settled numerous adversary proceedings, including an action against several of the debtor's senior executives.

United StatesLitigation, Mediation & Arbitration

In In re Amerlink, Ltd., Ch. 7 Case No. 09-01055-8-RDD, 2014 Bankr. LEXIS 813 (Bankr. E.D.N.C. Mar. 3, 2014), a Chapter 11 Trustee filed and then settled numerous adversary proceedings, including an action against several of the debtor's senior executives. Some of those executives later filed a state court action against other executives. The Trustee (still possessing the power to waive the debtor's privilege after conversion to Chapter 7) agreed to waive the privilege. The state court plaintiff resisted the waiver, but the court confirmed that the "Trustee has full authority and discretion to determine if a waiver is appropriate." Id. at *9. Two weeks later, another court dealt with a more complicated situation. In McKinstry v. Genser (In re Black Diamond Mining Co.), Civ. No. 13-125-ART, 2014 U.S. Dist. LEXIS 36992 (E.D. Ky. Mar. 19, 2014), Jones Day represented a debtor during a Chapter 11 restructuring. The Trustee charged with liquidating some of the debtor's

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