Villegas v. Schmidt, No. 14-40423 (5th Cir. 2015)
Annotate this CasePlaintiffs filed suit against the bankruptcy trustee of BFG's estate under 28 U.S.C. 1334(c), alleging that the trustee committed gross negligence and breached his fiduciary duty while acting as trustee by failing to pursue an action against Nationwide. Section 1334(c) provides that district courts may hear proceedings “arising under title 11 or arising in or related to a case under title 11." The district court dismissed the case because plaintiffs failed to obtain leave from the bankruptcy court that appointed the trustee before filing suit against him. The court concluded that the Barton doctrine continues to apply regardless of whether plaintiffs’ claims qualify as Stern claims. The court rejected plaintiffs' contention that the Barton doctrine does not apply when a party brings suit in the court that exercises supervisory authority over the bankruptcy court that appointed the trustee. Accordingly, the court affirmed the judgment, rejecting plaintiffs' argument that Barton is satisfied by filing suit in the district court with supervisory authority over the bankruptcy court.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.