Drilling Co. Trustee Can Sue Shareholders: 5th Circ.

Law360, New York (July 21, 2011, 8:21 PM EDT) -- The Fifth Circuit said Thursday that Texas Wyoming Drilling Inc.'s trustee can sue former shareholders for $4 million in dividends they received during the company's insolvency, upholding a Texas bankruptcy court decision against one of the driller's targets.

A three-judge panel upheld the bankruptcy court's ruling against one of Texas Wyoming's 32 pre-Chapter 11 petition shareholders, Laguna Madre Oil & Gas II LLC, which sought to have the case tossed because the drilling company had no standing to sue.

At issue in the appeal was whether...
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