Opinion ID: 512405
Heading Depth: 2
Heading Rank: 1

Heading: Nature of the Lawsuit

Text: 8 As the parties cannot seem to agree on a characterization of the instant action, we must, as an initial matter, examine the complaint in order to divine the nature of this lawsuit. In doing so, we leave aside for the moment such thorny issues as whether the cause of action alleged actually exists under state law and whether the Committee is entitled to assert it even if it does exist. We begin by noting that on its face, the complaint names LWE as the plaintiff in this lawsuit, not individual creditors of LWE or the Committee. The complaint charges that the named individual defendants, in their capacity as officers and directors of LWE, are liable to LWE for gross negligence, mismanagement and breach of fiduciary duty. In general terms, the complaint alleges: (1) conflicts of interest on the part of officers and directors which, in many cases, were resolved against the interests of LWE and in favor of outside interests; (2) grossly inadequate formulation, implementation and monitoring of budgetary constraints which led to expenditures far in excess of reasonable expectations of income; (3) insufficient oversight of personnel; (4) inadequate marketing and planning of the fair itself; and (5) unreasonable failure to enforce the terms and conditions of LWE's contracts and agreements. Having determined that the Committee's complaint alleges that the appellees were grossly negligent, mismanaged LWE and breached their fiduciary obligations to the corporation, 4 we must now determine as a threshold issue whether those allegations state a claim under Louisiana law. Where, as here, no cause of action is asserted arising under the Bankruptcy Code and thereby implicating some federal interest, the viability of the claim asserted by LWE must be evaluated under Louisiana law. Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979).