In re Lear Corp.

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Bankruptcy

New York Law Journal

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Judge Katherine Forrest

Bankruptcy court's approval of Lear Corp.'s reorganization became effective Nov. 9, 2009. A 2011 putative class suit alleging Lear's participation in a price-fixing conspiracy was consolidated with multi-district antitrust actions in the Eastern District of Michigan (MDL court). In 2011, Lear sought a bankruptcy court order enforcing its reorganization plan, and dismissing the antitrust actions. Bankruptcy court's March 2012 order enjoined antitrust claims based on conduct before Lear's Nov. 9, 2009, discharge. It also confirmed that Lear's alleged post-effective date conduct could potentially render it liable for acts committed before and after the effective date. On appeal, district court held bankruptcy court abused its discretion by deciding to abstain. Bankruptcy court was to determine if Lear's post-effective date conduct can cause damages to "come alive again?" Also, if Lear and its co-conspirators engaged in post-effective date conduct constituting antitrust violations, did the bankruptcy discharge preclude the MDL court from holding Lear jointly and severally liable for pre-effective date damages relating only to its co-conspirators' conduct? Abstention was inappropriate for both questions properly before bankruptcy court.

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