Case ID: br_197/html/0965-01.html
Source: Caselaw Access Project
Author: {"author": "HUGHES, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re QUATRE “C” CORPORATION, Debtor. QUATRE “C” CORPORATION v. FIDELITY & DEPOSIT COMPANY OF MARYLAND.
    Civil Action No. H-94-2095.
    Bankruptcy No. 92-43729.
    United States District Court, S.D. Texas.
    May 21, 1996.
    Glendon Bryan Adams, Stafford, Texas, for Appellant.
    Simon W. Hendershot, III, Houston, Texas, for Defendant.
   Opinion on Judgment

HUGHES, District Judge.

The debtor voluntarily sought protection under the bankruptcy laws. Later its reorganization was converted involuntarily into a liquidation. The corporation filed an adversary to attack a claim by Fidelity & Deposit Company of Maryland on its own despite the trustee’s decision not to object. The bankruptcy court dismissed the adversary action for lack of standing.

The corporation has no right to manage its own liquidation. The trustee represents the community of interests that must be reconciled in the process of liquidation. The authority to decide has been confided to the trustee.

Two situations could arise when the interposition of the debtor as a distinct interest from its own bankruptcy estate under a trustee would be allowed. First, if the ward could show that its guardian had behaved corruptly. Second, if the ward could show that (a) the trustee was not pursuing an objection that the ward could show had merit and that (b) the consequence of the decision by the trustee would be a direct reduction in the residuary estate that would pass to it on conclusion of the bankruptcy. Neither of these is present here.

The judgment dismissing Quatre Corporation’s independent objection to Fidelity & Deposit Company’s claim will be affirmed.