State Law Preempted In Suit V. Dana Board: 6th Circ.

Law360, New York (January 20, 2009, 12:00 AM EST) -- A federal appeals court has affirmed the dismissal of a former shareholder's lawsuit against the board of recently reorganized auto parts maker Dana Corp., finding that federal bankruptcy law preempts the plaintiff's state law claim for breach of fiduciary duty.

Judge Eric L. Clay of the U.S. Court of Appeals for the Sixth Circuit ruled Thursday on behalf of a three-judge panel that the plaintiff's lawsuit was effectively a derivative lawsuit. Since all prepetition Dana shares were canceled when the company's Chapter 11 reorganization plan was...
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