08 B 28225, 09 A 00413
In this case, the chapter 7 trustee sought to enjoin a lawsuit brought by a group of investors who invested in the Debtors against a third non-debtor party accounting firm. The investors filed suit in Minnesota state court for negligent misrepresentation and professional negligence regarding the accounting firm’s financial reports concerning the Debtors’ financial position. The investors theory is that the accounting firm, with proper due diligence, would have uncovered an alleged Ponzi scheme. The Court agreed with the Trustee’s argument that the suit against the accounting firm was property belonging to the bankruptcy estate that only the Trustee could pursue and stayed the investors’ lawsuit.