Dynasty Oil and Gas (“Dynasty”) survived as a shell corporation after all of its assets were liquidated in a Chapter 11 bankruptcy. The bankruptcy court granted summary judgment against Dynasty’s post-confirmation аttempt to sue the Appellees for their alleged mismanagement of its property during the reorganization. We affirm the judgment for the following reasons.
BACKGROUND
In early 2004, Dynasty filed a Chapter 11 bankruptcy case. At the time of filing Dynasty owned several oil and gas properties, which had been out of production since late 2003. Citizens Bank (“Citi
The Plan authorized another creditor, Saber Resources, LLC (“Saber”), to purchase all of Dynasty’s assets in exchange for a lump-sum payment to Citizens in the amount of $2.5 million. Other unsecured creditors received cents on the dollar, and Dynasty’s equity holders were allocated nothing, because the estate lacked sufficient funds to pay all claims in full. Though Dynasty had been a debtor-in-possession, the Plan specified that Dynasty would not be revested with title to any estate assets at confirmation, because Saber was purchasing substantially all of Dynasty’s assets. The Plan nonetheless providеd that Dynasty and the Official Unsecured Creditors’ Committee (“Committee”) retained limited powers to pursue some claims on behalf of the estate.
After the Plan was confirmed, in February 2005, the Creditors’ Committee filed suit against Citizens and Wildcat (the “First Action”). The First Action complaint alleged various claims under state law and the Bankruptcy Code (the “Code”). Among other things, the Committee claimed that Wildcat completed unnecessary work on various wells, and that Citizens wrongfully paid for this work, needlessly depleting the balance of the debtor-in-possession account. The court dismissed the Committee’s state-law claims under Rule 12(b)(6). Thereafter, Wildcat was dismissed from the suit, and the remaining claims arising under the Code were settled.
In March 2006, Dynasty filed the present aсtion in Texas state court (the “Second Action”), naming as defendants Citizens and Wildcat, as well as Roger Becker, Wildcat’s principal, and Charles Spradlin, a loan officer with Citizens. The Sеcond Action petition states common-law claims against the Appellees for, inter alia, failing to complete necessary work on some wells, completing unnecessary work оn other wells, and misrepresentation. Appellees removed the Second Action, with no objection from Dynasty, to the district court, and the district court referred the matter to the bankruptcy court. The bankruptcy court, concluding that Dynasty’s claims in the Second Action were barred by the resolution of the First Action, granted summary judgment to the Appellees on the basis оf res judicata and collateral estoppel. The district court affirmed the bankruptcy court’s decision on both grounds, and Dynasty appeals.
DISCUSSION
It is unnecessary for us to reach the questions of
res judicata
or collateral estoppel, becаuse this case turns on the more fundamental question of Dynasty’s standing. Standing is a jurisdictional requirement, and we are obliged to ensure it is satisfied regardless whether the parties address the matter.
Lang v. French,
During its Chaptеr 11 case, Dynasty, as a debtor-in-possession, had most of the powers of a bankruptcy trustee to pursue claims on behalf of the estate. 11 U.S.C. § 1107(a). Upon confirmation of the plan, the estate ceased to exist, and Dynasty lost its status as a debtor “in possession.” 11 U.S.C. § 1101(1);
In re Grinstead,
Nonetheless, in some cases the Code allows a reorganized debtor to bring a post-confirmation action on a “claim or interest belonging to the debtor or to the estate.” 11 U.S.C. § 1123(b)(3). A debtor may preserve its standing to bring such a claim
(e.g.,
for fraud or breach of fiduciary duty,
2
or to avoid a preferential transfer
3
) but only if the plan of reorganization expressly provides for the claim’s “retention and enforcement by the debtor.” § 1123(b)(3)(B). “After confirmation of a plan, the ability of the [debtor] to enfоrce a claim once held by the estate is limited to that which has been retained in the plan.”
In re Paramount Plastics, Inc.,
For a debtor to preserve a claim, “the plan must expressly retain the right to pursue such actions.”
Paramount,
Here Dynasty alleges, in short, that if the Appellees had discharged their duties properly, Dynasty’s wells would have been more рroductive at a lower cost, leaving more money in the debtor-in-possession account and commanding a higher
If Dynasty had wanted to bring a post-confirmation action for maladministration of the estate’s property during the bankruptcy, it was required to state as much clearly in the Plan. Had that been the case, the creditors could have reviewed the possible impact of future litigation on their claims and liabilities before voting to confirm the Plan. As it happened, Dynasty did not preserve those claims. 4 The Plan has been confirmed and substantially consummated; the estate no longer еxists. Dynasty is without standing to assert these claims.
Dynasty also lacks standing to pursue its misrepresentation claim. Dynasty complains that Citizens agreed its claim against Dynasty would be satisfied by Saber’s $2.5 million payment, yet the bank brought a subsequent collection action against Dynasty’s guarantors. Dynasty, a discharged debtor, has no standing to represent its guarantors, and has shown no injury of its own. Dynasty has no liability on Citizens’ claim, nor is it potentially hable to its guarantors for reimbursement of any payment they make to Citizens. During the bankruptcy, Dynasty’s guarantors held a contingent claim against the estаte, which would have become fixed if and when they paid Citizens on the guarantee.
In re Boles,
The bankruptcy court’s judgment in favor of the Appellees, affirmed by the district court, is therefore AFFIRMED.
Notes
. Because federal courts lack jurisdiction on the basis of Dynasty’s lack of standing, we need not consider whether the bankruptcy court has subject matter jurisdiction over a state-law controversy, albeit one related to the estate’s administration.
.
In re Avado Brands, Inc.,
.
Harstad v. First American Bank,
. In fact, Dynasty sat by while the Creditors’ Committee pursued very similar, perhaps identical, claims against the Appellees post-confirmation. This situation led to the bankruptcy court's adjudication of claim and issue preclusion.