Opinion ID: 764897
Heading Depth: 3
Heading Rank: 1

Heading: The Obligations of a Bankruptcy Creditor Filing a Claim

Text: 89 The plaintiffs argue that they were not true parties to the Interpool litigation, but merely filed their claims in bankruptcy court as creditors after receiving notice from the U.S. bankruptcy trustee. Interpool actually involved a number of consolidated creditors' claims against KKL and a distinct § 304 proceeding challenging the propriety of U.S. bankruptcy jurisdiction while the Australian liquidation was already pending. Though Southern Cross was a named party in Interpool, it alleges that it was not involved in litigating the § 304 proceeding and participated actively only in other aspects of the case involving creditors' claims against various freights. 90 The District Court rejected the plaintiffs' distinction between the § 304 proceeding--in which the allegations of Wah Kwong's misconduct were made--and the run-of-the-mill creditors' claims. It noted that Southern Cross was represented by counsel who entered an appearance in the litigation, and that TIP, though not a named party,filed a claim after receiving notice. According to the District Court, Wah Kwong's arguments were put forth in the § 304 aspect of the litigation and in Judge Politan's opinion, and the plaintiffs neglected their duty of due diligence if they were not aware of Wah Kwong's position. While the District Court should not have taken arguments before Judge Politan into account on a 12(b)(6) motion, for the reasons that follow we agree that the plaintiffs should have taken notice of Judge Politan's opinion explaining the appointment of a U.S. bankruptcy trustee despite the ongoing Australian litigation. 91 First, and at the very least, a reasonable creditor should have inquired why the court found it necessary to have a U.S. proceeding in the face of an ongoing foreign liquidation. Although Southern Cross argues that it did not participate in the § 304 aspect of the Interpool case, the result that the Australian liquidator sought was to void the U.S. attachment of Southern Cross's freights. Southern Cross was served with all relevant papers, and the contention that it was somehow insulated from the§ 304 proceedings is simply untenable. In these circumstances, Southern Cross should have examined Judge Politan's opinion resolving the Australian liquidator's § 304 claim. 92 TIP's obligations as a reasonable creditor are much more difficult to determine. Unfortunately, the record of the Interpool proceedings has not been preserved in its entirety, though there is evidence that, in 1990, the Australian liquidator was unable to serve TIP with documents in the case because it had moved, and its forwarding order had expired. At all events, TIP had notice of the pending U.S. bankruptcy proceeding triggered by Judge Politan's opinion, because it filed a claim in that proceeding. 8 Judge Politan's opinion was not simply notice in the air, as TIP participated in the resultant proceedings. See People v. Hill, 952 P.2d 673, 699-700 (Cal. 1998) (judicially noticing prior opinions to show that a prosecutor involved in the prior cases had notice of a particular problem). We conclude that TIP also should have read Judge Politan's opinion, given the circumstances of the case.