Chapter 17, B. Standing

• Jurisdiction: United States

B. Standing

Inherent in any analysis is an evaluation of standing. A trustee stands in the shoes of the debtor and has standing to bring any suit that the debtor could have instituted but for the filing of bankruptcy.⁴⁵⁰ There are two types of lawsuits that a trustee may bring: (1) those brought by the trustee as a successor to the debtor's interest in the estate under 11 U.S.C. § 541; and (2) those brought under the trustee's avoiding powers.⁴⁵¹

In order for a trustee to have standing to assert a malpractice claim, he or she must assert injuries to the debtor, not injuries to third parties, such as the creditors who will not be paid.⁴⁵² Generally, a trustee cannot maintain an action against a third party that could not have been maintained by the debtor.⁴⁵³ In order for a trustee to have standing, the injuries must be to the debtor, not the creditors.

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Notes:

^[450] Shearson Lehman Hutton Inc. v. Wagoner, 944 F.2d 114, 118 (2d Cir. 1991).

^[451] Ericola v. Gaudette (In re Gaudette), 241 B.R. 491 (D.N.H. 1999).

^[452] Baena v. KPMG LLP, 389 F. Supp. 2d 112 (D. Mass. 2005), citing In re Rare Coin Galleries of Am. Inc., 862 F.2d 896, 901 (1st Cir. 1988).

^[453] Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416, 92 S. Ct. 1678, 32 L. Ed. 2d 195 (1972).