Bankruptcy Law Case Summary – Uecker v. Zentil

On behalf of Furr & Cohen, P.A. posted in News on Friday, May 6, 2016.

In a case brought by a bankruptcy trustee against a former attorney of the debtor company, claiming he helped the managers of the debtor company perpetrate a fraud, trial court grant of the attorney’s demurrer without leave to amend, finding the Trustee’s claims barred by the in pari delicto doctrine, is affirmed where: 1) Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, was correctly decided and holds that if this doctrine would have barred claims if asserted by a company prior to bankruptcy, the doctrine also bars them when asserted by the bankruptcy trustee suing on behalf of the company’s bankruptcy estate; and 2) trustee’s Civil Code section 2306 does not defeat the in pari delicto defense.