Another Day, Another Case Roundup!

3rd Circuit

In re: IT Group, Inc. (05/25/06 - No. 05-2191)

Dismissal of an adversary complaint filed by a bankrupt company's deferred compensation plan seeking secured, priority status for claims for benefits is affirmed over a claim that certain features of the plan obligated the corporation to fund a secular trust, outside the reach of creditors, for their exclusive benefit when a committee learned that the corporation was facing insolvency.

Seitz v. Detweiler, Hershey & Assocs., P.C. (05/26/06 - No. 05-2760)

A claim of negligence cannot sustain a deepening-insolvency cause of action. Summary judgment for defendants in an action brought by a bankruptcy trustee for an insolvent internet company against an accountant and his employer is affirmed where a malpractice claim failed since plaintiff could not establish harm or causation, and a deepening-insolvency claim failed because he could not establish a genuine factual issue to support an allegation that defendant engaged in fraudulent conduct.

4th Circuit

Duncan v. Duncan (05/24/06 - No. 05-1159)

Summary judgment in favor of defendant, in adversary proceeding brought to challenge the dischargeability of a judgment debt arising out of a state wrongful death action, is reversed where the issues decided in state court were not identical to and could not collaterally estop litigation of the controlling issue in the adversary proceeding.