Leon v. Hirsch

Appellate Division of the Supreme Court of New York

Leon v. Hirsch

228 A.D.2d 417, 643 N.Y.2d 420, 643 N.Y.S.2d 647, 1996 N.Y. App. Div. LEXIS 6237

Appellate Division of the Supreme Court of the State of New York·Decided June 3, 1996·Published·Cited by 1 cases

Opinion

[418]*418Bankruptcy trustees may sue and be sued in State court, without leave of the appointing court, when the debtor represented by the trustee would have been a proper party to the action (see, 28 USC § 959; 11 USC § 323; Pereira v Phillips, 154 Misc 2d 155). However, when a trustee is sued personally for wrongful conduct involving the assets of a bankrupt estate, the Bankruptcy Court has exclusive subject matter jurisdiction (see, Maguire v Puente, 120 Misc 2d 871; Chappel v First Trust Co., 30 F Supp 765).

The causes of action that were dismissed by the Supreme Court were interposed against the defendant Eric C. Kurtzman personally or against his law firm, the defendant Kurtzman & Haspel, for wrongful acts allegedly committed while Kurtzman was a bankruptcy trustee. These causes of action are within the exclusive jurisdiction of the Bankruptcy Court which appointed Kurtzman and cannot be maintained in the Supreme Court. Mangano, P. J., Thompson, Florio and McGinity, JJ., concur.

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[418]*418Bankruptcy trustees may sue and be sued in State court, without leave of the appointing court, when the debtor represented by the trustee would have been a proper party to the action (see, 28 USC § 959; 11 USC § 323; Pereira v Phillips, 154 Misc 2d 155). However, when a trustee is sued personally for wrongful conduct involving the assets of a bankrupt estate, the Bankruptcy Court has exclusive subject matter jurisdiction (see, Maguire v Puente, 120 Misc 2d 871; Chappel v First Trust Co., 30 F Supp 765).

The causes of action that were dismissed by the Supreme Court were interposed against the defendant Eric C. Kurtzman personally or against his law firm, the defendant Kurtzman & Haspel, for wrongful acts allegedly committed while Kurtzman was a bankruptcy trustee. These causes of action are within the exclusive jurisdiction of the Bankruptcy Court which appointed Kurtzman and cannot be maintained in the Supreme Court. Mangano, P. J., Thompson, Florio and McGinity, JJ., concur.

Leon v. Hirsch, 228 A.D.2d 417, 643 N.Y.2d 420, 643 N.Y.S.2d 647, 1996 N.Y. App. Div. LEXIS 6237 (N.Y. Ct. App. 1996).

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