In re: Tribune Company Fraudulent Conveyance Litigation, No. 19-3049 (2d Cir. 2021)
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The bankruptcy litigation trustee appeals the district court's orders dismissing claims arising out of the leveraged buyout of the Tribune Company in 2007 and its bankruptcy filing in 2008. The trustee contends that the district court erred in dismissing his claims against the Tribune Company's shareholders and financial advisors for fraudulent transfer, breach of fiduciary duty, and related causes of action. The trustee also contends that the district court erred in denying leave to amend his complaint.
The Second Circuit affirmed the district court's dismissal of the intentional fraudulent conveyance claims against the shareholders based on the buy-back of their shares; affirmed the district court's dismissal of the breach of fiduciary duty and aiding and abetting breach of fiduciary claims against the allegedly controlling shareholders; affirmed the district court's dismissal of the aiding and abetting breach of fiduciary duty and professional malpractice claims against the Financial Advisors; affirmed the district court's dismissal of the actual fraudulent conveyance claims as to Morgan Stanley, Citigroup, and Merrill Lynch, but vacated as to VRC; affirmed the district court's dismissal of the constructive fraudulent conveyance claims as to Morgan Stanley and VRC, but vacated as to Citigroup and Merrill Lynch; affirmed the district court's denial of the trustee's motion for leave to amend to amplify his intentional fraudulent conveyance claim against the shareholders and to add a constructive fraudulent conveyance claim against the shareholders; and remanded for further proceedings.
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