News & Events

Suit Dismissal

Butler Snow recently obtained dismissal of a suit brought in the federal bankruptcy court for the Northern District of Mississippi by a Chapter 12 bankruptcy trustee against a family limited partnership and its general partner. The trustee sought to avoid a security interest held by the general partner in the debtor’s limited partnership interest, and to avoid payments made to the general partner on account of loans made to the debtor. Additionally, the trustee sought to disallow the general partner’s proof of claim and compel disgorgement of prior payments made on the claim. The bankruptcy court granted the defendants’ motion to dismiss and held that the claims were time barred and that claim objection procedures could not be used to disallow a claim based on avoidance of a security interest where the statute of limitations had run on the underlying avoidance claim.