Professional Malpractice Action

In Parmalat Capital Fin. Ltd. v. Bank of Am. Corp., No. 09-4302, an action against an accounting firm for professional malpractice and fraud, which was removed from Illinois state court, the court affirmed in part the district court’s dismissal of the action based on pending bankruptcy proceedings where 1) an 11 U.S.C. section 304 proceeding is a case for the purposes of subject matter jurisdiction under 28 U.S.C. section 1334(b); and 2) so long as the estate at issue in a section 304 proceeding, wherever located, may conceivably be affected by the state law actions, those state law actions are “related to” the section 304 case.  However, the court vacated in part where the district court needed to consider whether abstention was mandatory.

 

Related Resources

  • Read the Ninth Circuit’s Decision in Parmalat Capital Fin. Ltd. v. Bank of Am. Corp., No. 09-4302

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