An Alert to Attorneys, Receivers and Trustees: Immunity From Suit May be Terminated Once the Case Has Closed
One hundred forty years ago, the U.S. Supreme Court held in Barton v. Barbour, 104 U.S. 126, 128 (1881), that before suit is brought against a receiver, leave of court by which he was appointed must be obtained. The so-called Barton doctrine has since been expanded to also include bankruptcy trustees and other fiduciaries, but a recent ruling by the Eleventh Circuit Court of Appeals has dramatically curtailed its lifespan. On June 15, the Eleventh Circuit issued its opinion in Chua v. Ekonomou, No. 20-12576, holding that once a receivership or bankruptcy proceeding is concluded, a litigant no longer needs to obtain permission from the receivership or bankruptcy court before initiating suit against the court-appointed receiver or trustee. By doing so, the Eleventh Circuit has also created a split among the circuits, creating possible jeopardy for receivers and trustees and paving the way for a possible return of the Barton doctrine to the U.S. Supreme Court.
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