DPC Investors' Fraud Claims Cuffed By Ch. 11: 5th Circ.

Law360, New York (June 17, 2011, 4:20 PM EDT) -- The Fifth Circuit on Thursday ruled that the confirmation of Davis Petroleum Corp.’s reorganization plan barred former shareholders from pursuing fraud claims against Sankaty Advisors LLC and other investors that allegedly bought the company at a cut-rate price.

A three-judge panel faulted the bankruptcy court’s reasoning but ultimately affirmed the dismissal of Nancy Sue Davis Trust’s claims against Gregg Davis and the consortium that bought DPC in a three-day bankruptcy proceeding, finding that the confirmation order for the plan prevented the trust from seeking damages for...
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