Pro-Pac Inc. v. WOW Logistics Inc., No. 12-2976 (7th Cir. 2013)
Annotate this CasePro-Pac, a packaging business, filed for Chapter 11 bankruptcy in 2006, then filed an adversary proceeding against WOW, a logistics service provider, for aiding and abetting a Pro-Pac employee’s breach of fiduciary duty. The bankruptcy court found that WOW had aided and abetted the Pro-Pac employee, but based its award on an independent unjust enrichment claim. The district court ordered the bankruptcy court to dismiss, reasoning that the unjust-enrichment argument had been introduced too late in the case. The Seventh Circuit reversed and remanded, finding that the district court erred in dismissing the case, but that the bankruptcy court erred in assessing Pro-Pac’s damages. On remand, the bankruptcy court must reexamine issues relating to WOW’s tort liability. If the bankruptcy court wants to award punitive damages, it must first award compensatory damages based on the harm Pro-Pac suffered.
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