Tuesday, December 27, 2016

Dismissal Ruling Full of Disney Allusions

Judge H. Christopher Mott of the Western District of Texas is known to fill his opinions with references to movies and pop songs.   His latest opinion in Xtreme Power Plan Trust v. Schindler, et al (In re Xtreme Power, Inc.), No. 16-1004 (Bankr. W.D. Tex. 12/22/16) continues this trend with allusions to Disney's Frozen, an ironic reference given the current warm weather in Austin.   

The opinion begins:

This type of lawsuit has become somewhat commonplace—directors of a now defunct corporation are sued for breach of fiduciary duties. Here, the parties are currently “Frozen” in battle—as the Defendants filed motions to dismiss under Rule 12(b)(6), echoing “Indina Menzel” to demand that the Plaintiff just “let it go.” For the most part, the Court agrees with the Defendants and will send all but a single claim to a wintery grave.
Opinion, pp. 1-2.

Following a lengthy opinion, the Court allowed a claim against four directors for breach of the duty of loyalty to proceed while concluding that "the remainder of the Complaint skates on such thin ice that it must be dismissed under Rule 12(b)(6)." 

While I do not have time for a lengthy analysis, click on the style of the case above to read it.   It is useful reading for those litigating director and officer liability claims.

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