MC Asset Recovery LLC v. Commerzbank A.G. (In Re Mirant Corp.), 675 F.3d 530

Mirant sought to avoid a Guaranty Tied to a failed European power-island deal; MCAR substituted as the debtor-in-possession litigation entity.
Mirant issued a Guaranty through MADP; Commerzbank syndicated the loan to other lenders.
After plan confirmation and bankruptcy proceedings, MCAR pursued avoidance actions to recover transferred property.
District court dismissed for lack of standing and then granted summary judgment that Georgia law applied and FDCPA was not applicable.
Choice-of-law issue centered on whether New York or Georgia law should govern §544(b) avoidance actions; FDCPA applicability was disputed.
Court ultimately held MCAR has standing, FDCPA is not applicable under §544(b), and New York law governs the fraudulent transfer analysis on remand.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to pursue avoidance under §544(b)	MCAR has standing as the estate representative.	Lenders contend MCAR lacks standing since creditors were paid.	MCAR has Article III standing to pursue avoidance.
FDCPA as applicable law under §544(b)	FDCPA should be treated as applicable law under §544(b).	FDCPA is not applicable law under §544(b).	FDCPA is not applicable law under §544(b).
Choice of law for fraudulent transfer	New York law should apply.	Georgia law should apply.	New York law applies; district court’s dismissal vacated and remanded.

In re Acequia, 34 F.3d 800 (9th Cir.1994) (trustee may pursue avoidance despite full payment to unsecured creditors; petition-date trigger of §544(b) rights)
Adelphia Recovery Trust v. Bank of America, N.A., 390 B.R. 80 (S.D.N.Y.2008) (standing issues under §544(b) when creditors are paid in full)
In re Moore, 608 F.3d 253 (5th Cir.2010) (trustee’s avoidance rights persist if beneficial to the estate under §550)