Barton Still Applies To Bankruptcy Trustees, 3rd Circ. Says

Law360, New York (May 4, 2012, 7:08 PM EDT) -- The 131-year-old Barton doctrine, which requires a party to obtain court permission before suing a court-appointed receiver, still applies to bankruptcy trustees, the Third Circuit said Friday in a precedential ruling.

A Pennsylvania bankruptcy court had granted leave to a land purchaser in a Chapter 7 bankruptcy to file suit in state court against the trustee, though the court expressed some doubt as to whether its permission was needed, speculating that Barton was “antiquated and probably not controlling in the Third Circuit.”

The appeals panel affirmed the necessity of the...
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