Aerospace Engineering & Support, Inc., 662 B.R. 168

Systems Implementors, Inc. (SI) filed a large ($1.4M+) unsecured proof of claim in the bankruptcy case of Aerospace Engineering & Support, Inc. (the Debtor), which was filed under Subchapter V of Chapter 11.
SI previously won a state court judgment against Aerospace Engineering Spectrum (Spectrum), a limited partnership for which the Debtor is a general partner, after Spectrum defaulted on a settlement agreement related to an Air Force subcontract.
SI's state court collection action alleged the Debtor (as Spectrum’s general partner) was liable for the Spectrum judgment and included claims under the Utah Uniform Voidable Transactions Act (UVTA), the Utah Limited Partnership Act (LPA), alter ego, and assumption of liability.
When the Debtor filed for bankruptcy, SI’s ongoing state court claims and collection efforts were automatically stayed; SI then moved for relief from this stay to continue litigation against both the Debtor and non-debtor defendants.
The Debtor objected to SI’s proof of claim, arguing it related only to Spectrum—not to the Debtor—while SI argued for allowance based on the Debtor's general partner status and assumption of liability.

Issue	SI's Argument	Debtor's Argument	Held
Whether SI's proof of claim is allowable against the Debtor	SI is entitled due to Debtor's status as general partner and assumption of Spectrum's debt	Claim is only against Spectrum; res judicata bars new claims	SI’s claim allowed as enforceable against Debtor
Whether SI's proof of claim is prima facie valid against the Debtor	Prima facie effect under Bankruptcy Rule 3001(f)	Not entitled to prima facie effect; lacks basis against Debtor	Not entitled to prima facie effect, but SI met burden of proof through response
Whether res judicata bars claims against the Debtor	No bar since Debtor was not party/privity in first suit	SI’s claims should have been raised in original action	No res judicata bar; Debtor and Spectrum not in privity and claims rest on different facts
Whether automatic stay prevents SI from pursuing claims against non-debtor defendants	Stay does not apply, or cause exists to lift stay	Stay should apply to preserve estate’s rights under § 544(b)	Stay applies to UVTA claims, but lift granted with conditions for fairness

In re Sweetwater, 884 F.2d 1323 (10th Cir. 1989) (estate’s exclusive control over avoidance actions aims for equal treatment of creditors)
Macris & Associates, Inc. v. Neways, Inc., 16 P.3d 1214 (Utah 2000) (sets forth elements for claim preclusion under Utah law)
Press Publ’g, Ltd. v. Matol Botanical Int’l, Ltd., 37 P.3d 1121 (Utah 2001) (discusses privity and claim preclusion standards)
Otoe Cnty. Nat'l Bank v. W & P Trucking, Inc., 754 F.2d 881 (10th Cir. 1985) (automatic stay generally does not apply to non-debtors)